What Is an Employer of Record and How Does EOR Work?

Employee onboarding through an Employer of Record in IsraelEmployee onboarding through an Employer of Record in Israel

An Employer of Record, commonly known as an EOR, is a local company that legally employs workers on behalf of another business. The EOR handles employment contracts, payroll, taxes, pension contributions, statutory benefits and labor-law compliance, while the client company manages the employee’s daily work. This allows a foreign company to hire employees in Israel without first establishing a local legal entity.

EOR vs PEO: How to Choose the Right Employment Model

HR leaders comparing EOR and PEO employment models in Israel

If your company does not have a registered entity in Israel, an Employer of Record is the practical route to compliant hiring. If you already operate through an Israeli entity, a PEO can usually provide payroll and HR support at a lower service cost while leaving more responsibility and control with your company. That is the core difference in the EOR vs PEO decision.