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Getting Started with Employer of Record

If you are using Thera’s Employer of Record product, read this guide before hiring your first international employee. This guide explains how EOR works, what Thera manages, and where your responsibilities remain.

Updated over a week ago

Hiring outside the US creates real legal and financial obligations. Employment laws vary by country and apply regardless of company size. Mistakes can result in fines, back pay, employee claims, or delayed payroll.

What Is an Employer of Record

  • An Employer of Record is a local legal employer that hires employees on your behalf.

  • Thera becomes the legal employer in the employee’s country. You control the employee’s role, responsibilities, and day-to-day work.

  • Thera manages employment compliance. You remain financially responsible for all employment costs associated with the role.

Responsibilities at a Glance

What Thera Handles

  • Local compliant employment contracts

  • Payroll calculation and local currency payments

  • Tax withholding and statutory filings

  • Mandatory benefits required by law

  • Employee registration with local authorities

  • Local payroll and labor law compliance

  • Compliant off boarding when notified on time

What You Handle

  • Hiring decisions and compensation

  • Day-to-day management and performance

  • Accurate payroll inputs and approvals

  • Budgeting for employer taxes and benefits

  • Understanding notice periods and termination costs

  • Providing timely notice for changes or terminations

  • Funding payroll and final pay obligations

  • EOR simplifies hiring. It does not remove responsibility.

Payroll Funding and Deposits

  • EOR payroll runs on a pre-funded model.

  • You fund payroll before employees are paid. Funding includes gross salary, employer taxes, mandatory benefits, and EOR service fees.

  • Pre-funded balances cannot be used for final wages, notice pay, or severance. These amounts must be funded separately and in advance.

Off-Cycle Payments and Changes

Off-cycle payments are available and may incur country-specific fees.

Compensation changes must be submitted at least eight days before the payroll cutoff for the employee’s country. Late changes may delay payroll.

Invoicing and ACH Funding

  • Thera funds payroll via ACH debit.

  • We notify you before each pull, then withdraw funds directly from your account to pay employees ahead of payday.

  • ACH is the most reliable way to ensure on-time payroll. Failed or returned debits may cause delays, fees, or require alternative funding.

Mandatory Benefits by Country

  • Mandatory benefits are required by law and cannot be waived.

  • These costs apply starting with the first payroll cycle. Country-specific details can be provided in advance upon request.

Notice Periods and Termination Basics

  • Most countries do not allow at-will termination.

  • Employees are entitled to notice, pay in lieu of notice, or severance based on local law, tenure, and termination reason.

  • Notify Thera as soon as termination is being considered. Late notice almost always increases cost and risk.

Onboarding an Employee

Once you are ready to hire:

  1. You provide role and compensation details

  2. Thera prepares a compliant local contract

  3. The employee completes onboarding documentation

  4. Mandatory registrations and benefits are activated

  5. Payroll is scheduled and funded

Off-Boarding an Employee

Once you are ready to off-board:

Simply contact Thera at [email protected]. As each case is different, we will work with you on specific details and action items

What Varies by Country When Off-Boarding

Off-boarding an EOR employee is not a one-size-fits-all process. The following are the specific areas that differ from country to country, and in many cases from employee to employee. Understanding these variables upfront will help you plan ahead and avoid unexpected costs.

  • Notice periods: Required notice periods range from as little as one week to 90+ days depending on the country, employee tenure, and role. During the notice period, the employee remains on payroll and payroll must be funded accordingly.

  • Severance obligations: Severance can range from one month to over twelve months of salary depending on the jurisdiction and tenure. In some countries, severance is mandatory regardless of the reason for termination.

  • Permissible reasons for termination: Many countries require a documented, legally valid reason for termination. “Poor performance” alone is often not sufficient. Without proper documentation, the employer may face wrongful termination claims, increased severance, or government fines.

  • Accrued benefits and final pay components: Final pay may include accrued vacation, prorated statutory bonuses (such as 13th or 14th month pay), unused leave balances, and social fund contributions. These vary by country and add to the total cost of separation.

  • Timeline to complete the process: Off-boarding in many countries takes weeks or months, not days. The process can include legal review, notice periods, final pay calculation, government filings, and benefits deregistration.

  • Funding requirements: Pre-funded payroll deposits cannot be applied to severance, notice pay, or final wage settlements. All termination-related costs must be funded separately and in advance.

Because these factors vary so widely, we strongly recommend contacting Thera at [email protected] as soon as termination is being considered. Early notice gives us time to advise on local requirements, provide a cost estimate, and reduce unnecessary expense.

Running EOR Payroll

  • Payroll runs on fixed country specific schedules.

  • You review payroll summaries, approve payroll by cutoff, and ensure funds are available on time.

  • Late approvals or funding can delay pay and create compliance risk.

Common Questions

Are EOR workers employees or contractors?

  • They are employees with full statutory protections.

Can we terminate immediately for poor performance?

  • Usually no. Most countries require notice and documentation.

Can deposits be used for final pay?

  • No. Final wages and severance must be funded separately.

Who handles HR questions?

  • Thera manages payroll, benefits, and compliance. You manage role and performance.

How much does it cost to off-board an employee?

  • It varies by country, employee tenure, and the reason for separation. Costs can include severance, accrued vacation payout, notice period pay, and statutory contributions. The total is rarely zero. Contact Thera for a country-specific estimate before initiating an off-boarding.

What happens if payroll funding fails?

  • If an ACH debit is returned or funding is not available on time, employee pay may be delayed. Late payroll can create compliance violations and penalties in many countries. Thera will work with you to resolve it, but the financial responsibility remains with the employer.

When to Contact Thera

Contact Thera if you are hiring in a new country, considering termination, changing compensation, unsure about local requirements, or managing an employee issue.

Early communication reduces cost and risk.

Final Note

  1. EOR enables global hiring. It does not make it casual.

  2. The best outcomes come from planning ahead, budgeting conservatively, and communicating early.

  3. Thera executes. Strong results come from proactive decisions.

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