The EOR or Contractor Offer Score, Seven Dimensions to Sign or Restructure

This guide is for anyone holding a remote offer from a company in another country, written as an employer-of-record contract, a contractor agreement, or both at different numbers. An employer of record (EOR) is a third-party company that legally employs you in your country on the hiring company's behalf and runs your payroll, tax withholding and statutory benefits. Here you get seven dimensions to score each contract from 0 to 2, a total out of 14, and three outcomes: sign the EOR contract, sign as a contractor at a premium you priced yourself, or send a written list of changes before you sign anything.

How the offer score works

Score every contract you were handed on seven dimensions, 0 to 2 each, for a maximum of 14. A contract that scores 12 or more with no zeros is signable. Anything else gets a written change list.

A contractor agreement means you invoice the client as a self-employed business and pay your own taxes, benefits and overhead. If you were offered both versions, score both separately on the same sheet. The comparison between the two totals is the decision, not the headline number on either offer.

The seven dimensions fall into two groups. The structure dimensions decide whether the contract protects you at all. The money dimensions decide whether it pays you what it looks like it pays.

Structure dimensions

Money dimensions

The cut points, 12 out of 14 and the 1% and 2% FX bands, are my calibration, not a published standard. Nobody has measured where cross-border offers go wrong at scale. Move a threshold if your situation demands it, but write down why before you see the number, not after.

Reading the outcome

• Sign the EOR contract. The EOR version scores 12 or more, has no zeros, and either beats the contractor version or is the only offer.
• Sign as a contractor at your priced premium. The contractor version scores 12 or more, has no zeros, and its net pay score is 2 because the rate clears the premium you built from line items.
• Send a change list. Everything else. The list names each dimension that scored 0 or 1 and the specific clause or number that would move it to 2.

Who is my legal employer on a remote job?

Under an EOR offer, your legal employer is the EOR's local entity that signs your employment contract, not the company whose logo is on the offer letter. Under a contractor agreement you have no employer at all, only a counterparty, which is whichever client entity signs.

An EOR arrangement always runs on two documents. The first is a service agreement between the client company and the EOR, and you usually never see it. The second is the employment contract between the EOR and you. The service agreement's governing law is usually the provider's or the client's choice. Your employment contract is governed by the law of the country where you work, and that is mandatory.

The two notice layers

The notice that matters is not just the one in your contract. Most EOR contracts require written notice from the client to the EOR first, typically 2 to 4 weeks, separate from the statutory notice owed to you. At Deel, either side can end one employee's service with at least 30 days' written notice. So your statutory notice can look generous while the client can end the arrangement that pays for it on a month's warning.

Statutory notice varies enormously by country. In Germany it runs from four weeks during probation to seven months at twenty years' service. In India, retrenchment pay is 15 days of average pay for every completed year of continuous service. In civil-law markets, pass-through exit costs are often two to four times the monthly base salary. I could not find a primary-source notice table covering many countries, so check your own country's labour code or a local employment lawyer rather than trusting a provider's summary.

Who pays when it ends

In the 5 public EOR contracts reviewed by one clause comparison (covering Deel, Multiplier, Oyster, Remote and WorkMotion terms), the client pays notice pay, severance and claim costs. The EOR does not. Some terms also police how the client handles a termination: under Multiplier's terms, discussing a termination with the employee without Multiplier carries a penalty of 15% of the final invoice.

An EOR refuses unlawful terminations. It does not fund them. Your protection is the client's budget.

That changes how you score the notice dimension. A well-funded client on an EOR contract is a genuine employment relationship with real statutory protection. A thinly funded client on the same contract gives you the same rights on paper, but they are only as good as the client's ability to pay the invoice.

How big a contractor premium has to be

There is no universal contractor premium. The published figures run from 16% to 100%, and every one is a calculator output with stated assumptions, not a measured market survey. Your break-even depends on billable capacity, planned unpaid days, self-funded benefits, business overhead, and the salary you are comparing against, so you have to build it yourself.

The contractor premium is the percentage by which a contractor rate must exceed the equivalent employee pay to leave you equally well off. Here is what the public calculators assume:

The spread is mostly a choice of denominator. On similar salaries the figures run from 16% to 51%, and the gap comes from billable weeks (46 against 48) and from whether overhead is included at all, not from tax rates.

The formula

Use this to convert a salary into the hourly rate you need as a contractor:

Required contractor hourly rate = salary ÷ (billable hours per week × billable weeks × (1 − overhead))

Worked through with econified's inputs: a $100,000 salary over 1,840 billable hours (46 weeks of 40 hours) at 25% overhead gives $100,000 ÷ 1,380 = about $72.46 an hour. The same salary spread across 2,080 employee hours is about $48.08 an hour. That is the ~51% premium in the table, and you can see exactly where it comes from.

The 13th-month trap

The 13th month is mandatory in about 28 countries. In the Philippines, for example, 13th-month pay is 1/12 of annual basic salary, due by 24 December under Presidential Decree 851. If the EOR offer is quoted monthly and you set a contractor rate at 12 times that monthly figure, you start 8.3% behind, or 16.7% behind where a 14th month also applies, and that is before employer social contributions.

For a sense of how large benefits are relative to pay in one market, the US Bureau of Labor Statistics' Employer Costs for Employee Compensation survey found benefits made up 30.0% of compensation for private-industry workers. That is a US figure. A country-specific premium that includes 13th-month pay and local social contributions is not publicly established anywhere I could find, which is why the worksheet below is built from your own line items.

EOR side (annual)
  Gross base, 12 months:                    ______
  13th month (base ÷ 12), if statutory:      ______
  14th month (base ÷ 12), if statutory:      ______
  Employer-funded benefits you would lose:   ______
  EOR total to replace:                      ______

Contractor side (annual costs you now carry)
  Planned unpaid weeks (holiday, sick, gaps): ______ weeks
  Billable weeks (52 minus unpaid):           ______
  Billable hours per week:                    ______
  Self-funded health and pension:             ______
  Social contributions as self-employed:      ______
  Accountant, filings, insurance, tools:      ______
  FX spread on withdrawal (see rail table):   ______
  Overhead as % of gross:                     ______

Required hourly rate
  EOR total ÷ (hours/week × billable weeks × (1 − overhead)) = ______
Rate offered: ______    Gap: ______ %

Score net pay 2 if the offered rate meets your required rate. Score 1 if the gap is small enough that one counter could plausibly close it. Score 0 if you have not priced it, or if the gap is too wide to close.

Currency and FX exposure by payment rail

Under a contractor contract the FX cost moves from the company to you, because conversion happens on your withdrawal rather than inside an employer's payroll. Measure the spread on the rail that will actually pay you before you score this dimension.

A spread is the gap between the rate you receive and the mid-market rate, the midpoint between buy and sell prices that you see on a neutral rate reference. Here is what the documented costs look like:

None of the offer checklists I reviewed deal with when conversion happens: the invoice date, the payment date, or the withdrawal date. That gap is not covered publicly. Ask the client in writing which currency you are paid in, who carries the conversion, and on what date the rate is set. Rail prices change, so re-check the provider's own pricing page on the day you score rather than trusting the table above.

Equity when your legal employer is a third party

Expect any options through an EOR to be NSOs, not ISOs. ISOs cannot be issued to people hired through an EOR, while NSOs can be offered to workers in other countries through an EOR and are also the only option for contractors.

An NSO (non-qualified stock option) is an option without the special US tax treatment reserved for ISOs (incentive stock options). ISOs carry rules that make them a poor fit for foreign workers anyway: a $100,000 limit on options first exercisable per calendar year, and a requirement to exercise within three months of leaving or be treated as NSOs.

In the UK, EMI options (Enterprise Management Incentives, a tax-advantaged UK scheme) require you to be an employee of the company whose shares are under option, or of a qualifying subsidiary. Under an EOR, your employer is the EOR's entity. Confirm with a UK adviser whether your arrangement qualifies before you count EMI tax treatment in your sums.

What is not established publicly:

• How plan documents treat tax at exercise in your country of residence. Remote's guidance says only that options must be granted in a country-compliant form.
• Whether RSUs or phantom units are routinely granted to EOR workers.

Score equity 2 when the grant notice names the instrument (NSO, RSU or phantom) and states the post-termination exercise window, or when no equity was promised in the first place. Score 0 when the grant is called an ISO for a non-US worker, or when equity exists only in a recruiter's email. If your exercise tax at home matters to the decision, an equity compensation adviser who handles NSO exercise for people outside the US is the right call.

Misclassification exposure on a contractor agreement

Misclassification exposure is the risk that the working relationship is really employment while the paperwork says contractor. What decides it is how the work is actually controlled, not the label on the contract.

The IRS asks whether the company controls, or has the right to control, what the worker does and how the worker does the job. It also looks at financial control and the type of relationship. The UK's IR35 rules test control, substitution (whether you could send someone else to do the work) and mutuality of obligation, often shortened to MOO (whether the client must offer work and you must accept it). HMRC's Check Employment Status for Tax (CEST) tool and its Employment Status Manual at ESM2029 are the reference points.

What each signal proves, and how it lies

• You set your own hours and methods. Proves contractor control. Lies when a "flexible" contract comes with daily standups, a line manager and fixed core hours.
• You invoice and carry your own tools and costs. Proves financial independence. Lies when the client supplies the laptop, accounts and every expense.
• You can send a substitute. Proves a business relationship. Lies when the clause exists but the client must approve every substitute and never has.
• The contract is fixed-scope. Proves a defined deliverable. Lies when the scope is "duties as assigned" with no end date.

What happens if it goes wrong

In the US, a misclassified worker can use Form 8919 to pay the 7.65% employee share of FICA instead of the full 15.3% self-employment tax. That route gives back only the employer half of FICA, not statutory benefits, and the IRS says an SS-8 status determination can take at least six months. In the UK, the client usually carries the liability: the deemed employer is liable for the income tax and NICs that should have been deducted, and an HMRC offset mechanism lets tax the worker already paid be set against the deemed employer's PAYE bill. UK employment status rules have also been under government consultation, so re-check the current position on GOV.UK. What happens to a foreign worker under their own country's rules is not publicly established. If you work from Brazil, Mexico or anywhere else, ask a local employment lawyer who advises remote workers on misclassification.

How common contractor paper is in three hiring markets

Refolk's index shows how large the contractor-titled workforce already is in three markets that foreign companies hire from remotely:

The Philippines total is 6.6 times Brazil's and 4.6 times Poland's. Upwork is a top employer label in both the Poland and Philippines samples, and Toptal appears in Brazil's. No EOR provider appears in any of the three top-10 employer lists.

My hypothesis, and it is unverified at n=25, is that one standard title reflects contracts written for foreign clients rather than a local freelance market. If that holds, a Philippine contractor offer is common enough that "everyone signs these" tells you nothing about whether your arrangement passes a status test. Score the arrangement, not the norm.

The scoring procedure, step by step

Run these eight steps on each contract you hold, in order, and record the score for each dimension as you finish its step. The full pass takes an afternoon. Finding the legal employer usually takes under an hour and pricing net pay takes 1 to 3 hours, though both are my estimates rather than measured times.

No source settles whether to start from pay or from structure. EOR guides put IP and the legal employer first. Calculator pages start from pay. I put structure first because a contract with a zero on legal employer or IP goes to a change list whatever it pays, and finding that out early saves you three hours of pricing.

How this score goes wrong

Each dimension has a typical failure, where the document looks fine and the score comes out wrong. These are the places to slow down.

1. Legal employer: the logo is not the signatory. The offer letter carries the client's logo, but the contract is signed by the EOR's local entity or by a subcontracted partner. This scores a false 2. Check whether the signatory matches the entity registered for payroll in your country. If a partner signs, score 1 until you know who the partner is.
2. Notice: the generous statutory number. Your contract shows months of statutory notice, but the client can end the service with the EOR on 30 days' written notice. This also scores a false 2. Ask for the per-worker termination clause in the service agreement, and score 1 if it is refused.
3. Equity: the ISO label. A grant labelled "ISO" given to a foreign EOR worker looks like a better instrument. As one source puts it, calling a grant to a contractor in Berlin an ISO does not make it one. The grant notice should say NSO and give the post-termination window. A wrong label is a 0, because it suggests nobody checked the plan.
4. Premium: the 52-week denominator. The premium is worked out over 52 weeks with no 13th month. Leaving this out can make total compensation estimates wrong by 8% to 17%. Rebuild it on billable weeks with every statutory month included.
5. FX: "fee-free" payments. The invoice is in USD and looks fee-free, but the spread is built into a worse rate, so you simply receive less. Divide the local amount received by the USD amount and compare that with mid-market. If you have not been paid yet, ask for a sample payout or the rail's published markup.
6. Misclassification: comfort from the contract. The contract says "independent contractor" and the paperwork looks professional. Neither changes how the work is controlled. Score from the factors, not the document.
7. IP chain: confidentiality without assignment. The contract has a confidentiality clause but no invention assignment, which reviewers flag as generic IP language. The quieter gap sits upstream: if the EOR's service agreement lacks the assignment through to the client, the IP is owned by the EOR rather than the client. A client that later discovers it does not own your code has a reason to end the arrangement, so this is a 0 until it is fixed.

A related false positive: some EOR contracts put the invention assignment directly in the employment contract, stating that IP belongs to the client. Sources disagree on which model is standard. Either is fine if the chain is unbroken. What fails is a chain where neither document finishes the transfer.

Sending the change list and keeping the score current

When the score says restructure, send one written message that lists each dimension scoring 0 or 1, the clause or number behind the score, and the specific change that would move it to 2. Specific asks get specific answers. "Can we discuss the contract" gets a call where nothing is written down.

Subject: [Role] offer: points to resolve before I sign

Hi [Name],

Thank you for the offer. I'd like to sign, and I have a short list of points to resolve first.

1. Legal employer: please confirm the entity signing my contract is [entity], registered for payroll in [country].
2. Notice: please share the per-worker termination term in your service agreement with [EOR], so I can see the notice that applies before my statutory notice.
3. IP: clause [x] covers confidentiality but not invention assignment. Please add an assignment clause, and confirm the service agreement assigns IP through to [client].
4. Equity: please send the grant notice naming the instrument and the post-termination exercise window.
5. Currency: please confirm the payment currency, who carries conversion, and the date the rate is set.
6. Rate: based on my line items (billable weeks, self-funded benefits, statutory months I would not receive), I need [rate] to match the employee version of this offer.
7. Prior service: if you later change EOR provider, please confirm my prior service will be recognised in writing.

Happy to talk any of these through. A revised contract covering them is all I need to sign.

[Your name]

A change list works best when walking away is a real option. If the client will not move, the score has done its job and you need the next offer. Refolk tailors your resume to each posting and drafts the cover letter, which keeps a parallel pipeline running while you wait on a revised contract. Refolk also scores how well you fit each posting, and a strong fit on paper is fair grounds for asking for a priced premium rather than accepting the first rate.

Before you sign

Keeping the score current

Re-score when any of these move, because each one sits on a mechanism that changes over time:

• Payment rails. Provider markups change. Re-check the rail's own pricing page before you score FX, and re-run the divide-and-compare test on your first real payout.
• EOR terms. Per-worker termination terms and penalties are set in each provider's standard terms. Ask for the current version rather than relying on any published comparison.
• Status rules. UK employment status rules have been under consultation, and US guidance can be revised. Re-read the IRS contractor-or-employee page and GOV.UK before scoring misclassification on a renewal.
• The contract itself. A renewal, a change of EOR, or a move from contractor to EOR is a new contract. Score it from step one, because the tenure and IP questions start over.