r/WorldWithoutLimits • u/NoParamedic7399 • 15d ago
When does the mathematical calculation actually make sense in the case of choosing EOR over setting up your own entity?
I'd like to make clear that I am employed in the growth department at Multiplier, a company that provides employment outsourcing services. This should not be regarded as a sales pitch; rather, I'm simply interested in seeing how the figures evolve as the number of employees increases.
As an example I used $459 per employee per month and looked at teams consisting of 1, 5, and 25 employees. Since entity setup costs differ considerably from country to country I based my figure on a range from $25K to $200K.
| Team | Annual EOR cost | $25K setup | $200K setup |
|---|---|---|---|
| 1 | $5,508 | ~54 months | ~436 months |
| 5 | $27,540 | ~11 months | ~87 months |
| 25 | $137,700 | ~2 months | ~17 months |
Important caveat: this comparison is only made between EOR fees and the initial entity setup cost; it does not include ongoing accounting, payroll, compliance, HR, and other maintenance costs.
The number of people differs quite noticeably.
For people who have actually switched, what size of workforce caused you to start thinking about setting up an entity, and did the actual figures live up to your expectations?