AOR vs. EOR: What’s the Difference?

This is where specialized partners like Agents of Record (AORs) and Employers of Record (EORs) come in.

An AOR focuses on simplifying insurance and benefits management, while an EOR handles the broader, more complex employment responsibilities. Understanding the unique benefits of each service can guide organisations in choosing the right model for their global expansion. In this guide, we’ll break down the key differences between AOR vs. EOR services and help you understand when to choose each one.

What is AOR?

AOR stands for "Agent of Record." In simple terms, an AOR is someone who handles specific administrative tasks for your company, usually related to insurance or employee benefits.¹

Think of an AOR as a middleman who takes care of things like: 

• Securing insurance policies
• Managing claims
• Keeping benefits paperwork in order

By having an AOR, you can offload these time-consuming tasks and trust that everything is being handled correctly. This lets you focus on running your business while ensuring your employees are covered. 

The key thing to remember is that with an AOR, you still remain the official employer. The AOR just helps smooth out the details. 

What is EOR?

EOR stands for "Employer of Record." An EOR is a company that takes on the full responsibility of being the legal employer for your workers, such as payroll, taxes, benefits, and compliance with employment laws.² 

Even though your team works for you day-to-day, the EOR manages all the behind-the-scenes employment tasks. This is especially useful if you're looking to hire people working remotely in different countries like Germany, India, or South Africa.

With an EOR, you don’t need to set up a legal entity in each new location. Instead, the EOR ensures that everything complies with local laws, so you don’t have to worry about fines or legal missteps. An Employer Record ensures all processes remain efficient and compliant.

Key Differences Between AOR and EOR

While AORs and EORs both handle administrative tasks, their roles are quite different. Here’s a breakdown of the key differences:

In short, an AOR helps you manage benefits, while an EOR gives you a complete solution for handling employment, especially when expanding globally.

When to Use an AOR vs. an EOR

An AOR service is a great fit when you: 

• Need help with benefits administration – If managing insurance plans and benefits claims is taking up too much of your time, an AOR can step in and handle it. 

• Want to keep employer control – If you prefer to stay in charge of your employees but need assistance with insurance paperwork, an AOR service makes sense. 

• Operate domestically – If your workforce is all in one country and you don’t need to deal with international employment laws, an AOR can streamline your benefits process without changing your employment structure.

All that said, an EOR may align with your business goals if you:

• Want to hire internationally – If you’re looking to hire people in other countries, an EOR can legally employ them on your behalf.

• Need global compliance – Employment laws vary widely between countries. An EOR ensures you stay compliant, no matter where your team is located.

• Want to outsource HR tasks – If you’d rather not deal with payroll, taxes, and benefits yourself, an EOR handles it all.

• Need to scale fast – Setting up legal entities in new countries can take months. An EOR lets you hire quickly and legally, without the wait.

Benefits of Partnering With an EOR Over an AOR

Choosing an EOR gives you more than just administrative support—it unlocks flexibility and scalability for your business. 

Here are the benefits of an EOR:

• Simplified global expansion –  Instead of navigating the complexities of international laws and regulations, an EOR lets you hire anywhere quickly and legally, saving you months of setup time.

• Reduced risk – Employment laws can change frequently. An EOR stays up-to-date on regulations worldwide, ensuring you avoid legal pitfalls and costly mistakes.

• All-in-one solution – From payroll to tax filings to benefits, an EOR manages every aspect of employment. This comprehensive approach means fewer service providers to coordinate and less room for error.

• Cost efficiency – Setting up legal entities in multiple countries is expensive. An EOR lets you bypass those costs, allowing you to focus resources on growing your business.
• ‍Focus on core operations – With an EOR handling employment tasks, your team can spend more time on strategy, innovation, and achieving your business goals. In short, partnering with an EOR means more agility and the freedom to focus on what you do best: growing your company.