An employer of record service hires your people for you. A provider becomes the legal employer in a country. It runs payroll and statutory contributions for you and carries the local compliance, while you stay in charge of what those people do all day. The point is simple. You put someone on the ground in a new market without first registering a company there.<\/p>\n\n\n\n
This guide is for the people who sign off on that call, the CFO and the HR director. It covers what the service includes and what it really costs once statutory contributions land on top. It weighs the model against opening your own entity. And it ends on the questions worth asking before you sign. The reader we picture runs a company of 50 to 500 people heading into Malaysia, the Philippines and the rest of Southeast Asia for the first time. That is where compliance risk and a slow entity setup stall a hire before it happens.<\/p>\n\n\n\n
An employer of record service is a setup where a licensed provider becomes the legal employer of your staff in a country, while your business keeps full control of the work they do. The provider holds the contract and runs payroll. It withholds tax and pays the statutory contributions. It owns the compliance any local employer has to meet. You pick who to hire and what they work on.<\/p>\n\n\n\n
The whole model lives in how responsibility gets divided. The provider takes on the regulatory weight of being an employer in a market you may not know well, and you skip the cost and delay of registering an entity just to make one hire. SummitNext draws this line plainly. It owns payroll, statutory compliance and benefits as the legal employer, and the client keeps day to day management of the person. Confirm that split first with any provider you look at. It is the part that quietly defines everything else.<\/p>\n\n\n\n
An employer of record service handles the legal and administrative side of employment, so you do not have to become an employer in that country yourself. The provider’s remit runs the full lifecycle, from onboarding to the final paycheck.<\/p>\n\n\n\n
In practice the provider:<\/p>\n\n\n\n
The work itself stays with you. You set the goals and hand out the tasks. You run the performance reviews and decide who gets promoted or let go. This is the line most people miss between an EOR and a staffing agency. A staffing agency finds and supplies a worker. An employer of record employs the person you already chose. If you want the numbers behind these functions, our breakdown of what employer of record services cost<\/a> goes line by line. And when you need standing capacity rather than one compliant hire at a time, a dedicated remote team model<\/a> can run alongside an EOR.<\/p>\n\n\n\n An employer of record service runs between $299 and $850 per employee per month. The figure moves with the country, the seniority of the role and the provider tier. That fee is only half the picture. The bigger piece is easy to miss. It is the statutory employer contribution the provider collects and pays for you, and it adds 12 to 25 percent of gross salary on top, depending on the country.<\/p>\n\n\n\n Providers price one of two ways. A flat monthly fee per head charges the same no matter the salary, which suits higher-paid roles. A percentage of gross salary, 10 to 20 percent, suits cheaper roles where a flat fee would sting. SummitNext uses a four-slab structure that sets the fee by seniority and function instead of one blended rate, so a junior support hire and a senior engineer never cost the same. There is also no minimum headcount, so you can run the service for a single person and grow from there. The country by country detail sits further down.<\/p>\n\n\n\n Before you measure this against keeping the function in-house, get a custom EOR quote and see client results from SummitNext partnerships<\/a>.<\/p>\n\n\n\n For a small headcount or a tight timeline, an employer of record service beats incorporating a local entity on speed and cost. Registering an entity in Malaysia or the Philippines takes 8 to 16 weeks. It also brings standing obligations for accounting, tax filing and statutory reporting that cost the same whether you employ one person or twenty.<\/p>\n\n\n\n The call comes down to scale and how permanent you need to be. An entity starts to pay off once your headcount in a single market grows large enough that its fixed annual cost drops below the running per-employee fees of an EOR. To be fair, that day does arrive for a big enough team. Below that line, though, the service wins, because no minimum headcount means you only pay for the people you put on the payroll. It also lets you test a market before you sink capital into a permanent legal presence. Plenty of companies enter on an EOR, prove the demand is real, then incorporate later once the numbers justify it. That staged path mirrors the wider shift of operations into Southeast Asia<\/a> that established firms are making now.<\/p>\n\n\n\n Start by checking three things. Is the provider the direct legal employer in the country? Is its pricing itemised rather than blended? Does it operate in the markets you are entering, not just on a global map? This is where a lot of platforms quietly fall short. Many subcontract the local employment to a third party, which buries risk and cost you never see in the headline rate.<\/p>\n\n\n\n Run through this when you compare providers:<\/p>\n\n\n\n In our experience, that last point trips up more buyers than people expect. SummitNext allows on-client-premises working, so people employed through the service can sit in your office rather than being locked into a remote-only setup. Few providers offer it, so ask the question directly. If you want a hand mapping the entry itself, SummitNext also runs outsourcing advisory for ASEAN expansion<\/a> next to the employment service.<\/p>\n\n\n\n An employer of record service in Malaysia lets a foreign company employ staff locally with no Malaysian entity. The provider handles EPF, SOCSO, EIS and the HRD levy on its own books. Statutory employer contributions across the region differ by country, and they are a real slice of the total, not a rounding error.<\/p>\n\n\n\nHow Much Does an Employer of Record Service Cost?<\/strong><\/h2>\n\n\n\n
Employer of Record Service vs Setting Up a Local Entity<\/strong><\/h2>\n\n\n\n
How to Choose an Employer of Record Service<\/strong><\/h2>\n\n\n\n
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Employer of Record Service in Malaysia and Southeast Asia<\/strong><\/h2>\n\n\n\n