Hiring Employees and Contractors in the U.S. and Abroad: Tax Considerations & Software Solutions

Dec 6, 2023


A good team is the backbone of any thriving company. And the rise of technology has made it easier than ever before to expand your hiring pool well outside the boundaries of your city or even your state. 

Before you seek out the best and the brightest, though, make sure you have a payment plan. That, of course, means paying the employee or contractor. But it also means paying the applicable tax authority. 

The hassle of figuring out how much you owe to whom has long kept businesses from expanding their hiring reach. But new technologies can handle a lot of the heavy lifting for you. 


The quick fix: employers of record

We’ve explored the tax implications of hiring remote employees in detail, but let’s give a quick recap. When someone works for a company from another location, it establishes a nexus there. Depending on local tax law, that could subject the employer to compliance and payment requirements. 

But the employer establishing that nexus doesn’t necessarily have to be your own company. 

An employer of record (EOR) is what it sounds like. When anyone — say, a tax authority, for example — looks into who is hiring and paying a specific individual, they’ll see the EOR. But that employer of record doesn’t necessarily have to be the company benefiting from that individual’s work. 

Let’s say your company wants to hire a developer in Canada. That could mean establishing your business as an entity in Canada and dealing with all of the resulting tax implications. Or it could mean working with a company that offers EOR services in Canada. That way, you could hire this individual, but pay them through the EOR. The EOR is the one the Canadian government will hold responsible for taxes, compliance with employment regulations, and more. In other words, you can reap the benefits of a talented hire without the headache of navigating their local tax implications.

More good news: there are several EOR options available today. Let’s look at three of the leaders in this space.  


EOR and global payment solutions: Deel, Remote, and Rippling

Software solutions like these are literally designed to help you tackle the challenge of hiring employees living in locations where you don’t already have an established office.

None of these companies offer free trials, but contacting a representative should enable you to at least see a demo to get a feel for the solution. To help you get a better idea of which company you might want to explore first, we can give you a high-level overview of their offering:


Founded in 2014, Deel now supports more than 20,000 companies, including Nike, Dropbox, and Shopify. 

In addition to EOR services, Deel offers HR and payroll services in more than 100 countries. The tools in their suite range from global background checks to support for contractors. As part of the company’s value-add, Deel specifically promises to handle local tax law compliance.

When it comes to paying employees and contractors, Deel provides more cut-off time wiggle room than a lot of the other options available today. This makes it easier to add payroll adjustments or reimburse expenses, helping you get the right amount of money into your team’s hands quicker — great for employee morale. 

Deel offers EOR services for $599 a month. That includes:

  • ​​Local payroll
  • Local tax payment and compliance
  • Benefits packages tailored to the location
  • Support from more than 200 Deel experts who can help with local HR and legal considerations

Deel EOR also integrates with over 20 other solutions, including QuickBooks, Xero, and NetSuite.  


Remote positions itself as a global HR platform and is currently functioning as an EOR for DoorDash, Burger King, Aston Martin, and more. The company even offers to refund your first 90 days of management fees if you don’t end up completely satisfied with what they do on your company’s behalf. 

Remote offers benefits packages customized to the locale, payroll management, and more. As a startup, you might be particularly interested in the company’s offering focused on equity incentives. Remote can handle the local tax and reporting requirements for you whenever you decide to offer equity to an employee in a country they support. 

On that note, if you’re considering hiring in specific countries, you can use Remote’s country guide to find out which services they can offer there. Double-check that Remote offers global employment services if you plan to hire employees. If you’re only exploring international contractors, more countries will be in play through Remote. 

Like Deel, Remote charges $599 a month for its EOR services. It integrates with popular HR solutions like BambooHR and Greenhouse. 


Rippling promises to help companies pay employees and contractors around the world in their local currency in 90 seconds. The solution lets you avoid the waiting period that often comes with bank transfers or monetary conversions. Plus, Rippling’s robust payroll offering gives you functionality like automatically categorized and synced payroll and expense data and automatically assigned compliance training based on that country’s requirements.  

Rippling has a wide range of integrations, from Google Workspace to QuickBooks to Expensify. 

Unlike the other two solutions we’ve explored, Rippling doesn’t advertise a specific price for the company’s EOR service. Instead, you pick and choose which options you want from their offering (e.g., you might choose the EOR service plus U.S. and global full-service payroll). Then, a sales rep tailors a quote for you. Rippling does advertise that its services start at $8 a month per user.  


Ultimately, if you’re thinking of hiring an employee in a new location — whether that’s abroad or even just in a different state — doing so could establish a nexus for your company there. However, working with an EOR provider can eliminate a lot of the hassle and headache that could arise. All three of these solutions can help startups scale, enabling them to explore a broader talent pool without exposing their company to excess work to comply with local tax and employment law. 

If you want to talk more with an expert about which solution could be best suited for your company, get in touch. Our CPAs have experience with all of these tools and we can give you insight into how they function, plus a deeper dive into the pros and cons.