EOR contract: the employer of record service agreement explained

By the HRPricing editorial teamReviewed October 18, 2026How we research and score

An EOR contract is the employer of record service agreement between your company and the EOR: it sets the monthly fee, deposit, term, notice period and who pays for termination, while a second, local employment contract between the EOR and the worker sets pay and duties. The cost traps sit in the first one. Remote's terms run 12 months and auto-renew (checked October 2026).

An EOR service agreement is the contract under which an employer of record legally employs workers in another country on your behalf, setting its fees, deposits, notice, liability and exit terms.

On this page
  1. Two contracts, two parties
  2. Clauses to check, with real examples
  3. What the deposit adds up to
  4. Questions to ask before signing

Two contracts, two parties

Service agreement (you and the EOR): fees, invoicing and currency, deposits, term and renewal, how to end the arrangement, who pays severance, and liability. It is usually terms of service plus an order form per hire.

Employment contract (EOR and worker): salary, benefits, hours, leave, notice and probation, written under local law. The EOR signs as employer; you direct the work. Ask to see the employment contract template before your hire signs it. For the full model, read what an employer of record is.

Clauses to check, with real examples

EOR service agreement terms from published vendor terms
ClauseWhat vendors publish
Term and renewalRemote: 12 months, auto-renews, 30 days' notice; renewals at least 8% higher (or US CPI if higher). Oyster: either side can end on 30 days' notice. Multiplier: no minimum term.
Early exitRemote: owes the Minimum Contract Value shortfall. Deel promo order forms: 2-year term, full list price owed if ended early.
DepositOyster: at least one month of total cost of services, credited about 60 days after the end date. Playroll: one month's salary. Multiplier: sized from costs, fees and notice periods, refunded within 60 days.
Termination processMultiplier: 30 days to process a termination (60 for bulk) and a 15% penalty if you contact the employee about termination yourself.
Severance and exit costsRemote passes severance through. Oyster bills Transition Costs, including severance.
CurrencyRemote invoices at the Remote FX Rate and its terms allow a transaction fee or margin.

Sources: Remote Terms of Service (updated Aug 3, 2026) and order form terms; Oyster terms (2025-02-27); Multiplier EOR terms (Jun 1, 2026); Playroll and Deel pricing pages. Checked October 16, 2026.

What the deposit adds up to

Take one hire in Mexico on a USD 40,000 salary. Our country data puts employer contributions and mandatory bonuses at 31.8%, so the yearly employment cost is $52,720, or $4,393.33 a month. At Oyster, the deposit is at least one month of total cost of services: $4,393.33 plus the $699 fee, or $5,092.33. At Playroll, one month's salary is $3,333.33, on top of its $399 monthly fee. Oyster credits it back about 60 days after the end date; Playroll does not state its refund timing.

Country costs come from our Mexico EOR page; compare providers in EOR pricing.

Questions to ask before signing

  • Do you own the entity in this country, or use a partner? One Oyster reviewer on Trustpilot (July 2025, more than a year old) described blame passed between the EOR and its local partner over unpaid final pay.
  • Can you change the agreement after I sign, and how much notice do I get?
  • What is my total exit cost if I end the hire in month 6?

Rankings with these terms are in the best EOR services, and two head-to-heads go deeper: Deel vs Remote and Deel vs Oyster. The US equivalent is the PEO agreement.

Frequently asked questions

What is an employer of record service agreement?
It is the contract between your company and an employer of record. It sets the EOR's monthly fee, deposits, invoicing currency, term and renewal, notice to end the service, who pays severance and other exit costs, and liability. Each hire is usually added through an order form.
Is the EOR contract the same as the employee's contract?
No. The worker signs a separate local employment contract with the EOR, which sets salary, leave, probation and notice under local law. You sign the service agreement with the EOR.
How long is a typical EOR contract?
It varies. Remote's terms of service run 12 months and auto-renew with 30 days' notice, though it also offers pay-as-you-go. Oyster can be ended by either side on 30 days' notice, and Multiplier says it has no minimum term (vendor terms checked October 16, 2026).
Do EORs charge a deposit?
Many do. Oyster asks for at least one month of total cost of services, Playroll one month's salary, and Multiplier sizes the deposit from costs, fees and notice periods. Deel publishes no deposit figure.
Can I cancel an EOR contract early?
Usually yes, but check the exit cost. Remote's order form terms charge the Minimum Contract Value shortfall, and Deel's promotional order forms require the full list price for the whole two-year term if ended early.
Sources (9)
  1. Remote: Terms of Service (updated Aug 3, 2026) (checked Oct 16, 2026)
  2. Remote: Order form terms and conditions (checked Oct 16, 2026)
  3. Oyster: Terms (version 2025-02-27) (checked Oct 16, 2026)
  4. Multiplier: EOR terms (effective Jun 1, 2026) (checked Oct 16, 2026)
  5. Playroll: Pricing (checked Oct 16, 2026)
  6. Deel: Pricing (checked Oct 16, 2026)
  7. Oyster: Pricing (checked Oct 16, 2026)
  8. Trustpilot: Oyster reviews (Jul 28, 2025 review on final pay and local partner) (checked Oct 16, 2026)
  9. Camara de Diputados (Mexico): Ley Federal del Trabajo (checked Oct 16, 2026)

This page is general information, not tax, legal or accounting advice. Rules and rates change, so check the official source linked above before you file or sign a contract. Read our disclaimer.