The distinction that decides it
The question underneath EOR vs PEO is simple: whose workers are they, and who should carry the employment risk?
Choose an EOR when you want people working for you without your company being their legal employer. The EOR hires them, pays them, withholds their taxes, provides their benefits, and carries the compliance burden, while your team directs the day to day work. This is how companies engage a flexible workforce of contractors converted to W-2 status, project teams, and specialist talent, at home or across state lines, without building the legal and payroll infrastructure themselves.
Choose a PEO when you already employ your staff and intend to keep it that way, but want a partner sharing the administration: payroll processing, benefits buying power, HR support. The PEO co-employs your team for administrative purposes. The people, and the fundamental employment relationship, stay yours.
And there is a third arrangement worth knowing, because almost nobody searches for it by name. An Agent of Record (AOR) manages your genuine 1099 independent contractors: verifying they're classified correctly, handling agreements and payments, and keeping the compliance file that protects you if a state or the IRS ever asks. If your flexible workforce is mostly true contractors rather than workers who need employing, the AOR is often the piece companies were searching for without knowing its name.
A quick way to place your company
If you're hiring flexible workers and want no part of the employment liability, you want an EOR.
If you employ a settled team and want the admin burden shared, you want a PEO.
If you engage independent contractors and the growing worry is whether they're classified correctly, you want an AOR, and possibly an EOR for the ones who should really be W-2.
Many companies between 200 and 1,000 people end up with a mix: a core employed team (with or without a PEO), plus a flexible workforce that deserves its own infrastructure. The mistake is stretching one tool across both.
What the market charges (and what the prices mean)
Pricing in this market splits into two very different things that look similar on an invoice.
Paying contractors is cheap. Contractor payment tools charge from a few dollars per contractor per month to move money and collect tax forms. What they don't do is carry any of the risk: if a classification fails, the liability is entirely yours.
Transferring the risk costs real money, because someone is genuinely holding it. When a provider legally employs a worker on your behalf, pricing is typically either a flat amount per worker per month, often several hundred dollars, or a percentage on top of the worker's pay. PEOs typically price as a percentage of payroll or a monthly fee per employee.
The distinction matters because the cheap tier and the protected tier get compared as if they were the same product. They are not. One is a payment rail. The other is an employer standing between your company and the liability.
Where myBasePay fits
myBasePay is built for the flexible workforce side of that picture, for US companies. Employer of Record, Agent of Record, and Vendor of Record under one roof: hire, pay, and manage contractors, freelancers, and flexible talent compliantly, in all 50 states, with global reach when you need it.
For a company of 200 to 1,000 people, that comes with something the biggest platforms reserve for their largest accounts: senior people on your account, who know your setup, rather than a ticket queue. And the pricing follows the work: a percentage on top of each worker's pay, so the cost scales with the workforce you actually run.
Frequently asked questions
What is the difference between an EOR and a PEO?
An EOR becomes the legal employer of workers on your behalf and carries payroll, taxes, benefits, and compliance. A PEO co-employs staff you already have, sharing HR administration while you remain their employer. An EOR suits flexible workforces; a PEO suits settled, directly employed teams.
What is an Agent of Record (AOR)?
An Agent of Record manages a company's independent contractors: verifying correct classification, handling agreements and payments, and maintaining the compliance record. It suits companies whose flexible workers are genuine 1099 contractors, where the main risk is misclassification rather than the need to employ anyone.
Does a smaller company need an EOR or a PEO?
It depends on the workforce, not the company size. A company engaging contractors and flexible talent can use an EOR or AOR to carry that risk. A company with a settled employed team wanting shared HR administration needs a PEO. Many companies between 200 and 1,000 people use a mix.
Can I use an EOR for US workers, or only for international hiring?
Both. EORs are widely known for international hiring, but US companies use domestic EORs to engage flexible talent across all 50 states without carrying multistate employment compliance themselves. State by state payroll, tax, and classification rules make a US EOR valuable even with no international workers at all.
What does an EOR cost?
Genuine liability transfer, where the provider legally employs the worker, is typically priced as a flat amount per worker per month, often several hundred dollars, or as a percentage on top of the worker's pay, which is how myBasePay charges. Contractor payment tools cost from a few dollars per contractor per month but carry none of the employment risk.