TL;DR
- EOR: best for companies hiring in a country where they have no legal entity. The EOR becomes the legal employer and manages payroll, benefits, taxes, and compliance.
- PEO: best for companies that already have a local entity and want support with payroll, benefits, HR administration, and compliance.
- ASO: best for companies with an existing entity that want administrative HR and payroll support only, with no co-employment.
- For India: companies without an Indian entity generally need an EOR, since the traditional US-style PEO co-employment structure isn’t formally recognized in India.
- Cost: Asanify EOR starts from $99 per employee/month. PEO pricing commonly ranges from $100 to $200 per employee/month, or 2% to 12% of payroll, excluding entity setup and maintenance costs.
- Simple rule: no local entity means EOR. Existing entity plus HR support means PEO. Existing entity with admin support only means ASO.
A PEO (Professional Employer Organization) co-employs your staff under your own registered legal entity, so you remain the legal employer and stay liable for compliance. An EOR (Employer of Record) becomes the legal employer itself, which means no local entity is required. Asanify’s EOR starts from $99 per employee per month with onboarding in as little as 24 hours, while PEO fees typically run $100 to $200 per employee per month, or 2% to 12% of payroll, on top of entity setup costs of $10,000 to $50,000 or more. Simple rule: no local entity means EOR, an existing entity plus HR support means PEO.
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What Is an EOR (Employer of Record)?
An EOR is a third-party organization that becomes the legal employer for your workforce in a country where you don’t have a registered entity, while you continue directing the employee’s day-to-day work. An EOR typically manages employment contracts, payroll, tax withholding and statutory filings, benefits, social security and pension contributions, visa and work permit support, and local labor law compliance.
Asanify’s Global EOR covers 100+ countries, starts from $99 per employee per month, and can onboard a new hire in as little as 24 hours.
What Is a PEO (Professional Employer Organization)?
A PEO enters a co-employment relationship with your business: you remain the legal employer, while the PEO handles administrative HR work such as payroll, benefits administration, and compliance support. A PEO does not provide legal employer infrastructure, so it generally requires you to already hold a registered legal entity in the country where employees are based.
PEO fees are usually structured one of two ways: a percentage of total payroll (commonly 2% to 12%), or a flat per-employee-per-month fee (commonly $100 to $200). For a deeper look at how PEOs work, see What Is a PEO?
PEO vs EOR: Core Differences
EOR and PEO models differ mainly in legal responsibility, entity requirements, cost, and how quickly a company can start hiring. The table below highlights the key differences to help businesses understand which model may be a better fit for their workforce needs.
| Factor | EOR (Employer of Record) | PEO (Professional Employer Organization) |
|---|---|---|
| Legal employer | The EOR acts as the legal employer on record | The client company remains the legal employer |
| Local entity required | No, the EOR uses its own in-country entity | Yes, before a PEO relationship can start |
| Employment liability | The EOR manages payroll compliance and statutory obligations | Shared under a co-employment arrangement |
| Country coverage | Hire across multiple countries without setting up entities | Limited to countries where you already have an entity |
| Speed to hire | Often within days, sometimes within 24 hours | Slower, since an entity must exist first |
| Typical cost | Asanify EOR starts from $99 per employee per month | 2% to 12% of payroll, or $100 to $200 per employee per month |
An ASO (Administrative Services Only) provider is a third option worth knowing: it handles back-office payroll and HR administration for a company that already has a registered entity, but never becomes a co-employer or legal employer the way a PEO does. If you already have an entity and want admin support without shared liability, an ASO is worth evaluating alongside a PEO.
PEO vs EOR: Cost Comparison
Cost is another major factor when choosing between an EOR and a PEO. While a PEO may appear comparable on a per-employee basis, companies without a local entity also need to account for setup and ongoing entity maintenance costs. The table below compares the typical cost structure and time-to-hire for both models.
| Cost factor | EOR (Asanify) | PEO |
|---|---|---|
| Base cost | From $99 per employee per month | $100 to $200 per employee per month, or 2% to 12% of payroll |
| Entity setup required | No | Yes |
| Entity setup cost | None | $10,000 to $50,000 or more |
| Entity maintenance | None | $5,000 to $20,000 or more annually |
| Time to hire | As little as 24 hours | Weeks to months, since an entity must exist first |
For a small team in a new market, an EOR is often the more cost-effective route since it avoids paying for entity setup and a PEO at the same time. Use the Employee Cost Calculator to estimate total employer cost for your own hiring plan.
When to Choose an EOR vs a PEO
Choose an EOR if:
- You don’t have a legal entity in the country where you want to hire
- You’re testing a new market and want to avoid entity setup before validating demand
- You need to hire fast, sometimes within days rather than months
- You want to minimize compliance risk in an unfamiliar regulatory environment (check exposure with the permanent establishment risk quiz)
Choose a PEO if:
- You already operate through a local entity
- You need HR and payroll support, not a legal employer
- You want access to benefits negotiated across a larger pooled group
- You want to keep direct legal employer status while outsourcing administration
PEO vs EOR for India Hiring
Reviewed September 2026. Statutory references: EPFO (Provident Fund), ESIC (Employees’ State Insurance), Income Tax Department.
A PEO in the traditional, US-style co-employment sense is not formally recognized under Indian labor law: India’s regulatory bodies (EPFO, ESIC, and the Income Tax Department) expect one legal employer per employee, not a shared arrangement. So if you don’t already hold a registered Indian entity, what you actually need is an EOR, and most providers marketing “PEO services” to companies without an Indian entity are, in practice, delivering EOR services.
Entity requirement. An EOR needs no local Indian entity, it uses its own established Indian entity to legally employ staff on your behalf. A PEO-style arrangement in India only works if your company already owns a registered Indian entity, since India’s labor law does not treat a third-party provider as a co-employer.
Legal liability and compliance. The EOR’s Indian entity is the legal employer and carries the compliance liability for Provident Fund (PF), Employees’ State Insurance (ESI), and Tax Deducted at Source (TDS) filings. Under a PEO-style arrangement, your own entity stays the legal employer and retains that liability, the provider typically processes the filings but the obligation sits with you.
Speed to hire. An EOR can onboard in as little as 24 hours since no entity setup is needed. A PEO-style arrangement is slower, limited by your own entity’s registration and setup, which typically takes weeks to months.
Operational control. Both models let you direct the employee’s day-to-day work and performance. The difference is backend: with an EOR, the EOR’s entity handles payroll and statutory compliance behind the scenes; with a PEO-style arrangement, your own entity retains that operational and legal responsibility alongside you.
EORs in India also typically handle Form 16 issuance and Form 24Q quarterly TDS filings on your behalf, and can support FRRO registration and visa processing for foreign nationals working in India, on top of day-to-day PF, ESI, and TDS management. For India-specific hiring data and benchmarks, see the State of India EOR 2026 report.
India statutory employer costs
Whichever model you use, these employer contributions apply on top of gross salary for employees in India:
| Statutory contribution | Typical rate |
|---|---|
| Provident Fund (EPF) | 12% of basic salary |
| Employees’ State Insurance (ESI) | 3.25% of gross salary |
| Gratuity accrual | 4.81% of basic salary (after 5 years of continuous service) |
| Employer NPS (optional) | 10% |
In most cases, total employer cost in India runs approximately 18% to 22% above an employee’s gross salary once these are included. See India EOR pricing for the full breakdown, and India payroll for how these are processed.
Which one should you choose for India hiring?
Choose an EOR if:
- You don’t have a registered Indian entity and want to hire fast
- You’re hiring fewer than 30 employees and want to avoid paying for entity setup and HR support at once
- You want the provider, not your own entity, to carry the compliance liability
Choose a PEO-style arrangement (or an ASO, if you want to avoid shared liability) if:
- You already have a registered Indian entity
- You only need administrative payroll and HR support, not a legal employer
Why Choose Asanify’s EOR
Asanify’s EOR starts at $99 per employee per month, priced below larger providers like Deel, which charges $599 per employee per month in the same markets. It covers 100+ countries, so you’re not limited to a handful of pre-built entities, and it can onboard a new hire in as little as 24 hours once paperwork is in place. Every EOR plan includes Asanify’s own HRMS at no extra cost, so you’re not paying separately for a system to manage the employee once they’re hired. If you want to see how that stacks up against other providers directly, compare the leading EOR platforms for startups.
Quick decision snapshot
No Indian entity, need to hire within days: use an EOR. Have an Indian entity, want HR and payroll support only: use a PEO-style arrangement or ASO. Hiring under 30 employees in India: EOR is typically the faster, more cost-effective route.
For the full breakdown of Asanify’s India EOR pricing and country-specific detail, see Employer of Record in India and EOR cost in India.
FAQ
A PEO (Professional Employer Organization) is a co-employer: it shares HR, payroll, and compliance responsibilities with you, but you remain the legal employer and require your own registered entity in that country.
An EOR (Employer of Record) becomes the legal employer for your workforce in a country where you have no entity. Asanify’s EOR covers 100+ countries and starts from $99 per employee per month.
No. A PEO shares employer responsibilities through co-employment while the client stays the legal employer. An EOR becomes the legal employer itself, which is why it can hire on your behalf in countries where you have no entity.
The core difference is who the legal employer is and whether you need a local entity. An EOR is the legal employer and needs no entity from you. A PEO co-employs your staff, but only if you already hold a registered entity in that country.
Not in the co-employment sense used in the US. Indian law recognizes only one legal employer per employee, so a “PEO” in India only works if your company already owns the registered entity and remains that legal employer. Without one, you need an EOR.
For a company without a local entity, EOR is usually cheaper overall because it avoids the $10,000 to $50,000-plus cost of setting one up. A company that already has an entity may find a PEO’s 2% to 12% of payroll sufficient without extra setup costs.
“Global PEO” is a common but often misleading term. It’s usually used to describe EOR services rather than a true PEO, since traditional co-employment PEO structures are largely a US-specific model.
No. That is the core function of an EOR: it employs your team through its own registered entity in that country, so you can hire compliantly without setting up a subsidiary yourself.
Asanify’s EOR in India starts from $99 per employee per month, covering payroll, statutory compliance, and HRMS access. Statutory employer contributions such as PF and ESI apply on top of gross salary; see EOR cost in India for the full cost breakdown.
Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant or Labour Law expert for specific guidance.