This article is about Justworks Employer of Record and International Contractor Payments. What product am I using?
If you work with people outside the United States, Justworks offers two ways to support your international team: International Contractor payments and Employer of Record (EOR) employment.
This article explains what each relationship is, how each works in Justworks, and what to consider as your team and roles evolve.
What is an International Contractor?
An international contractor is a self-employed individual outside the U.S. who provides a specific service to your business under a contract. Contractors are not your employees, and they are not employees of Justworks.
What the relationship generally looks like
A few things that are generally true of contractor relationships:
- The contractor runs their own business and typically works with more than one client.
- They decide how and when the work gets done, and usually use their own tools and equipment.
- They receive the gross amount you pay them and are responsible for filing and remitting their own taxes.
- They are engaged for specific services or projects rather than an ongoing role. This is for individuals, not vendors or agencies.
How International Contractor payments work in Justworks
With Justworks, you invite a contractor from your account. They complete their own profile, set up banking details, and verify their identity. Once they’re set up, you can pay them in their local currency or in USD in select markets, see the exchange rate before sending a payment, and pull a dedicated payment report within Analytics.
What is an international employee through EOR?
An Employer of Record is a third party that becomes the legal employer, on your behalf, of an international employee in a country where your business doesn’t have a legal presence. With Justworks EOR, our entity in that country is the legal employer, and your team member is a full employee with the same protections and statutory benefits as anyone else working in that country.
What the employment relationship generally looks like
A few things that are generally true of EOR employment:
- Justworks issues a local employment agreement that reflects that country’s requirements.
- Justworks runs local payroll and withholds and remits both employee- and employer-side taxes.
- Statutory benefits and leave are provided, and you can add supplemental benefits in certain markets.
- You continue to direct the role — job title, responsibilities, salary, and day-to-day work.
How EOR works in Justworks
With Justworks EOR, our entity in that country is the legal employer, while you continue to direct the employee’s role, including their job title, responsibilities, salary, and day-to-day work.
Onboarding is guided rather than self-service. You work with an Onboarding Manager and have access to in-house consultants for country-specific questions, with guaranteed 24-hour response times. Timelines vary based on local requirements.
What is the difference between an international contractor and an international employee?
The main difference is the working relationship. An international contractor is self-employed and provides a defined service to your business. An EOR employee is employed under the laws of their country, with Justworks as the legal employer on your behalf.
That difference also shapes how each model works in Justworks, including setup, payment, payroll, taxes, benefits, leave, and reporting.
The table below compares the working relationship and the Justworks experience for each model.
| Comparison criteria | International Contractors | EOR Employee |
|---|---|---|
| The worker is self-employed and runs their own business | ✓ | |
| Justworks is the legal employer | ✓ | |
| The worker receives the gross amount and files their own taxes | ✓ | |
| Justworks withholds and remits local employee and employer taxes | ✓ | |
| A local employment agreement is issued | ✓ | |
| Statutory benefits and leave are provided | ✓ | |
| The worker sets their own hours and methods | ✓ | |
| Commonly used for defined projects or scoped work | ✓ | |
| Commonly used for ongoing, full-time roles | ✓ | |
| No legal entity of your own is required in the country | ✓ | ✓ |
| Self-guided onboarding for your company and Contractor | ✓ | |
| Guided onboarding with an Onboarding Manager | ✓ | |
| Paid per payment, in local currency or USD | ✓ | |
| Paid in local-currency via automated payroll | ✓ | |
| PTO and statutory leave managed in Justworks | ✓ | |
| Time tracking available in select markets | ✓ | |
| Can be managed alongside the rest of your team in Justworks | ✓ | ✓ |
| In-house support available to you and the contractor/employee accordingly | ✓ | ✓ |
What to consider as the relationship evolves
Worker classification isn’t simply a preference. Whether someone is a contractor or an employee is determined by how the working relationship actually functions, under the laws of the country where they live, not by what the agreement is called.
Labor authorities around the world tend to look at signals like:
- Control: Who sets the hours, methods, and day-to-day priorities?
- Integration: Is the person embedded in your team, using your tools and systems?
- Continuity: Is the relationship ongoing and full-time, or project-based?
- Economic dependence: Is your company their primary source of income?
Every country weighs these factors differently, and definitions that apply in one country may not apply in another. If you’re unsure how a specific relationship would be viewed, we strongly encourage you to consult with your team’s legal or tax advisor.
It's also worth knowing that classification can change over time. A relationship that started as a short, scoped project can gradually take on the characteristics of employment: more hours, a longer tenure, work that's become central to your business.
That shift matters, because the financial exposure sits with your business rather than the worker. If a contractor is later determined to have been functioning as an employee, back taxes, social contributions, and statutory benefits like paid leave and severance can be owed, and in some countries those liabilities can reach back across the entire length of the relationship. For roles that have taken on the shape of employment, EOR is a way to put the relationship on compliant footing, with a local employment agreement and statutory benefits handled from the start.
To learn more about how classification is assessed and the risks of getting it wrong, see our blogpost Employee or Contractor? Understanding the Risks of Misclassification.
Frequently Asked Questions
Can I use both at the same time?
Yes. International contractor payments can be used alongside EOR, so a mixed global team is managed in one place.
Can an international contractor become an EOR employee?
Yes, in countries where Justworks EOR is available. Some companies transition a contractor to an EOR employee when the working relationship changes over time. Reach out to the Justworks team and we can walk you through what that process involves.
Are both available in the same countries?
Not necessarily. International contractor payments and EOR have slightly different country coverage, and both are expanding. Check out our Global Hiring Guides for more information!
Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.