You've been using an EOR to manage contractors. Maybe it's Deel, Remote.com, or another platform. You're paying $49-99 per contractor per month, plus transfer fees, and you're starting to wonder: is this necessary?
If your workers are true independent contractors—not employees—the answer is probably no. You can migrate to direct contractor management, save thousands per year, and maintain full compliance.
This guide walks you through the practical steps to leave your EOR and set up a direct contractor management system.
Migration timeline
A typical EOR-to-direct migration takes 4-8 weeks depending on your contractor count and complexity. Here's a realistic timeline:
Week 1-2: Planning and setup
- Audit your current contractor roster and contracts
- Choose your payment providers (Wise, PayPal, Payoneer)
- Set up contractor management system (like Kontrable)
- Draft new contractor agreements
- Create communication templates
Week 3-4: Pilot migration
- Select 2-3 contractors for pilot migration
- Communicate the change and benefits
- Collect new payment details and tax forms
- Issue new contractor agreements
- Process first direct payment and confirm receipt
- Gather feedback and refine process
Week 5-6: Full rollout
- Announce migration to all contractors
- Send onboarding invites and collect details
- Review and sign all new agreements
- Complete final payments through EOR
- Confirm all EOR invoices are settled
Week 7-8: Transition complete
- Process first full payment cycle directly
- Confirm all contractors received payments
- Cancel EOR subscription
- Archive EOR records for tax purposes
- Document new workflow for future hires
Legal and documentation
The most important part of leaving an EOR is ensuring your contractor relationships are properly documented. Here's what you need:
New contractor agreements
You'll need independent contractor agreements that clearly establish the relationship. Key elements:
- Scope of work and deliverables
- Payment terms and rates
- Intellectual property ownership
- Confidentiality and non-disclosure
- Independent contractor status (not employee)
- Termination clauses
Tax forms
Collect the appropriate tax forms:
- W-9 for U.S. contractors
- W-8BEN for international contractors
- Store securely for 7 years (IRS requirement)
Payment records
Maintain a complete audit trail of all payments:
- Invoice copies
- Payment confirmations
- Transfer receipts
- Contractor confirmations
Payment setup
You'll need to set up direct payment accounts. Most businesses use one or more of these:
Wise (recommended for international)
Best for international contractors. Low fees (0.5-1%), fast transfers, supports 50+ currencies. Most contractors already have Wise accounts.
PayPal
Good for U.S. and some international contractors. Higher fees (2.9% + $0.30) but instant transfers. Widely accepted.
Payoneer
Popular in Asia, Latin America, and Eastern Europe. Competitive fees, good for contractors who prefer local bank transfers.
Bank wire (for large payments)
For high-value contractors ($5,000+ per month), direct bank wires can be cost-effective despite higher fixed fees.
Pro tip: Ask contractors which payment method they prefer. Most already have accounts with one or more of these providers.
Communication templates
Clear communication is critical. Here are templates you can adapt:
Initial announcement (2-3 weeks before)
Subject: Upcoming change to payment process
Hi [Name],
We're making a change to how we manage contractor payments. Starting [date], we'll be paying you directly instead of through [EOR name].
What this means for you:
• Faster payments (1-2 days instead of 3-5)
• Same or better rates
• Direct relationship with us
• No change to your work or deliverables
We'll send you an invite to our new contractor portal next week where you can:
• Add your payment details
• Sign a new contractor agreement
• Track invoices and payments
Questions? Reply to this email.
Thanks,
[Your name]
Onboarding invite (1 week before)
Subject: Action required: Set up your contractor profile
Hi [Name],
As mentioned, we're transitioning to direct contractor payments starting [date].
Please complete these 3 steps by [deadline]:
1. Click this link: [onboarding link]
2. Add your payment details (Wise, PayPal, or Payoneer)
3. Review and sign the contractor agreement
This should take 5-10 minutes. Your last payment through [EOR] will be on [date], and your first direct payment will be on [date].
Need help? Reply to this email or schedule a quick call: [calendar link]
Thanks,
[Your name]
First payment confirmation
Subject: Payment sent: $[amount] for [period]
Hi [Name],
Your payment of $[amount] for [period] has been sent via [Wise/PayPal/Payoneer].
You should receive it within 1-2 business days. Please confirm receipt in the contractor portal or reply to this email once you've received it.
Payment details:
• Amount: $[amount]
• Period: [dates]
• Method: [payment method]
• Reference: [invoice number]
Thanks for your work!
[Your name]
Rollout checklist
Use this checklist to ensure you don't miss any critical steps:
Audit current contractor roster and export all data from EOR
Set up payment provider accounts (Wise, PayPal, Payoneer)
Choose contractor management system (Kontrable, spreadsheet, etc.)
Draft contractor agreement template (have legal review)
Create communication templates (announcement, onboarding, payment)
Select 2-3 contractors for pilot migration
Send pilot announcement and onboarding invites
Collect payment details and tax forms from pilot group
Process first direct payment to pilot contractors
Confirm receipt and gather feedback
Refine process based on pilot feedback
Send announcement to all remaining contractors
Send onboarding invites to all contractors
Follow up with contractors who haven't completed onboarding
Complete final payment cycle through EOR
Confirm all EOR invoices are settled
Process first full direct payment cycle
Confirm all contractors received payments
Cancel EOR subscription
Archive EOR records (keep for 7 years for tax purposes)
Document new workflow for future contractor hires
Common pitfalls to avoid
Rushing the migration
Give contractors at least 2-3 weeks notice. Rushing creates confusion and increases the risk of payment delays or lost contractors.
Poor communication
Contractors need to understand why you're making the change and what's in it for them. Focus on benefits: faster payments, direct relationship, no middleman.
Incomplete documentation
Don't skip the contractor agreements and tax forms. These protect both you and your contractors. Take the time to do it right.
No pilot phase
Always test with 2-3 contractors first. This lets you identify and fix issues before rolling out to your entire team.
Forgetting about taxes
You'll need to issue 1099s to U.S. contractors at tax time. Make sure you're collecting W-9s and tracking payments accurately from day one.
Frequently asked questions
How long does it take to migrate off an EOR?
Most migrations take 4-8 weeks depending on contractor count and complexity. Small teams (5-10 contractors) can often complete the transition in 3-4 weeks, while larger teams may need 8-12 weeks for proper documentation and communication.
Will I lose my contractors during the migration?
Not if you communicate clearly. Most contractors prefer direct relationships and faster payments. Give them 2-3 weeks notice, explain the benefits (faster payments, no middleman), and provide clear transition steps. Retention is typically 95%+ when handled properly.
What happens to pending payments during migration?
Complete all pending payments through your EOR before migrating. Don't leave contractors waiting. Once all invoices are settled and confirmed, you can begin the transition to direct payments.
Do I need a lawyer to migrate off an EOR?
Not necessarily, but it's wise to have legal review your new contractor agreements, especially if you're working across multiple countries. Many businesses use standard contractor agreement templates and have them reviewed once, then reuse them.
Can I migrate contractors gradually?
Yes, and this is often the safest approach. Start with 2-3 contractors as a pilot, work out any kinks in your process, then roll out to the rest of your team. This reduces risk and allows you to refine your workflow.
Ready to migrate?
Kontrable makes it easy to migrate off your EOR and manage contractors directly. Our platform handles contracts, milestones, payments, and audit trails—everything you need to run a compliant contractor operation without EOR fees.
We're launching in Q1 2026. Join the waitlist to get early access and 50% off for 6 months.
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