The headline fee is only part of the story. Every EOR provider publishes a monthly per-employee price and some are transparent about what sits beneath it but many are not. The gap between the number on the pricing page and the number on your first invoice is, for a surprising number of businesses, a genuine shock — and once you’ve signed, there’s not much you can do about it.
This guide goes through the charges that routinely catch UK businesses out. Not to put you off using an EOR, but so you know what questions to ask before you commit.
Why this keeps happening
EOR pricing is genuinely complex to communicate. A UK hire involves the service fee, gross salary, employer National Insurance, auto-enrolment pension contributions, and potentially more. Presenting all of that clearly in a marketing context is awkward, so most providers simplify — sometimes to the point of misleading.
A few do it deliberately. Most do it because their sales process is built around winning the conversation before a competitor does, and a clean £400/month figure wins conversations better than a detailed breakdown that requires a spreadsheet. Either way, you tend to get a fuller picture after you’ve signed than before.
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The charges that actually catch people out
Onboarding fees
Some providers charge a one-off setup fee per new employee — processing the contract, running right-to-work checks, getting them onto the payroll system. This can range from £100 to £500 per hire, and it sometimes appears nowhere in the initial pricing conversation.
Ask directly before you sign: is there an onboarding fee, and how much?
Termination fees
This is the one that surprises people most. Several well-known EOR providers charge a fee when an employee leaves — regardless of the reason for leaving. The justification is that offboarding involves real administrative work: final payroll calculations, P45 processing, pension closure, HMRC notifications. That’s fair enough. What’s less fair is when you find out about it after the fact.
Termination fees vary a lot. A flat fee of £200–£500 is common. Some providers charge a multiple of the monthly service fee — one or two months’ worth. Others structure it as a minimum notice period for removing an employee from the service, meaning you’re billed for months where you’ve already ended the employment.
Get the termination fee in writing before you sign. If the provider won’t give you a clear number, that tells you something.
FX conversion margins
If your employee is paid in sterling but you’re invoiced in your home currency — or if the reverse applies — the EOR will apply a foreign exchange conversion somewhere. The margin on that conversion is almost never disclosed upfront.
Providers typically use mid-market rates with a spread of 0.5% to 2% added. On a £40,000 annual salary, a 1.5% FX spread is £600 a year. With ten employees, that’s £6,000 — paid invisibly in the exchange rate rather than as a named line on your invoice.
Ask which rate your invoices use, whether there’s a markup on mid-market, and whether paying in the employee’s local currency avoids a conversion altogether.
Minimum commitment periods
Some EOR contracts lock you in for three to six months from the start, billing you for the full period even if you no longer need the service. If a hire doesn’t work out in the first month, or if your circumstances change, you can find yourself paying for an employment that’s already ended.
Check the minimum commitment length and what the exit terms are if you need to leave early.
Amendment fees
Need to change an employee’s salary mid-year? Add a contractual benefit? Adjust working hours? Some providers charge an administration fee for mid-contract changes. This rarely comes up in the sales conversation and only becomes relevant once you’re already on the contract.
If your employment arrangements are in any way non-standard — equity, irregular pay, complex benefits — you’re likely to need amendments at some point. Worth knowing the cost in advance.
Benefits markups
If you want to offer employees more than the statutory minimum — private medical, enhanced pension, a cycle-to-work scheme — the EOR procures and administers these. Some pass the cost through at actual cost. Others add a markup of 5–15% on the provider’s rate.
Paying for the convenience of not sourcing benefits yourself is reasonable. An undisclosed markup is less so. Ask.
Payroll pre-funding
Most EOR providers require you to fund payroll two to five working days before the pay date. You’re essentially float-financing the payroll: your money leaves your account before it reaches the employee, which ties up working capital.
For one employee on £40,000 this is a minor consideration — roughly £3,300 sitting in transit for a few days. For twenty employees, you might be pre-funding £80,000–£100,000 every month. That’s a real cash flow impact, and it’s worth knowing the timing model before you assume your cash position is what it appears to be.
Less common but worth scanning for
A handful of providers include charges for data export, compliance reporting, or per-seat access to their management platform (if more than a set number of users from your business need access). These show up more often in enterprise contracts than SME ones, but they’re worth a quick read-through before signing.
How to protect yourself
Get a fully loaded cost illustration for your specific hire before committing. Ask the EOR to model the gross salary you’re planning, employer NI, pension, service fee, onboarding fee, and any FX margin — in writing. If they won’t do this, move on.
Read the termination and amendment clauses in the MSA yourself. Not the salesperson’s summary — the actual document. The two clauses most likely to cost you money after the fact are the termination fee and the minimum commitment period.
Compare at least two or three providers on the fully loaded number, not the headline. EOR pricing is competitive enough that a proper comparison often reveals a 20–30% difference in all-in cost. That’s worth an afternoon.
One more thing: ask whether the provider directly employs your worker through their own registered entity, or whether they use a sub-contracted or partner entity in the country concerned. Direct employment tends to come with a cleaner, more transparent cost structure. Sub-contracted arrangements sometimes carry additional margins at layers you can’t easily see.
