Article
12 min read
How to Hire Using an Employer of Record in the US (2025)
Employer of record
Author
Jemima Owen-Jones
Last Update
June 26, 2025
Table of Contents
What is a United States Employer of Record?
Top reasons to use an EOR in the United States
How to hire in the United States: Step-by-step guide
Employment compliance tasks an Employer of Record manages in the United States
How much does an EOR in the United States cost?
Which United States EOR should you choose?
Is Deel Employer of Record a strong choice for hiring in the United States?
Hire employees in the United States confidently with Deel Employer of Record
Key takeaways
- Setting up an entity in the US to hire local talent can take months and cost over $41,714 in initial legal, tax, and payroll setup fees.
- A US Employer of Record lets you engage talent through its local entity, bypassing entity setup, legal costs, and compliance headaches.
- Deel EOR owns its US entity for full control, supports hiring in 150+ countries, delivers transparent pricing, real-time compliance monitoring, and has top G2 ratings.
Hiring in the United States unlocks access to one of the world’s largest talent pools, but setting up a local entity, managing federal and state payroll taxes, and navigating complex employment law can stall your expansion. It’s common to face challenges with Social Security contributions, unemployment insurance, minimum wage variations, and local labor laws across 50 states.
An Employer of Record (EOR) in the US assumes the legal employer responsibilities so that you can focus on growth. An EOR handles employment agreements, payroll withholding, tax filings, benefits administration, and compliance with federal law, including the Federal and Medical Leave Act (FMLA).
Deel EOR's wholly-owned US entity, real-time compliance monitoring, and transparent pricing make scaling in the US frictionless.
See also: What’s the Fastest Way to Enter Markets and Hire Globally?
What is a United States Employer of Record?
An Employer of Record in the United States is an organization that hires local employees on your behalf. The EOR holds employment contracts, ensures payroll taxes such as Social Security and Medicare are withheld, manages unemployment insurance, and assumes statutory employer liabilities.
Operationally, you control day-to-day tasks and performance management. This arrangement lets you hire US talent instantly without setting up a local entity or navigating complex legal requirements.
By partnering with an EOR like Deel—with a wholly-owned US subsidiary—you transfer employment responsibilities including Social Security, Medicare, federal and state unemployment insurance, and workers’ compensation.
Deel’s AI-powered Workforce Insights and real-time compliance alerts keep you ahead of legal and regulatory changes, so as an employer, you’re always compliant.
Deel Employer of Record
Top reasons to use an EOR in the United States
Hiring in the US through an EOR replaces entity setup headaches with instant local employment. It reduces misclassification risks and manages diverse state-specific payroll taxes and labor laws on one platform.
With an EOR, you enjoy:
- Rapid market entry: Avoid 3–6 months of entity registration and high setup costs
- Liability transfer: The EOR assumes workforce-related legal risks, reducing your exposure
- State-by-state compliance: Unified platform for 50 state payroll, benefits, and leave rules
- Cost transparency: Flat monthly service fee with clear breakdown of gross pay and payroll taxes
- Global reach: Leverage Deel EOR's presence in 150+ countries to accelerate global hiring and expansion
Each benefit translates into real savings. For example, skip entity formation costs up to $41,714 and avoid penalties for mishandled unemployment insurance or payroll taxes.
…Deel’s all-in-one solution transformed our hiring and payroll processes into a seamless experience. With Deel, we've been able to grow globally with unprecedented confidence and efficiency
—Ajey Hare Prasath,
Director of Global HR, Pixis
How to hire in the United States: Step-by-step guide
Use this 8-step checklist to onboard US employees quickly and stay compliant with local labor laws.
1. Choose an EOR with a wholly-owned United States entity
Select an Employer of Record that owns its US legal entity rather than relying on third-party partnerships. A wholly-owned entity ensures direct compliance with federal and state payroll taxes, workers’ compensation, and employment contracts. Deel’s US subsidiary even processes payroll through its own payroll engine, preventing payment delays and compliance gaps.
Tip: Verify proof of entity ownership and state registrations before signing.
2. Book a demo and verify social proof
Schedule a live platform walkthrough. During the demo, ask about state-specific labor requirements, like California’s paid sick leave or New York’s wage notices. Review client case studies on multi-state hiring. Scan reviews on G2 and Trustpilot; Deel EOR holds a 4.8/5 average and has dozens of US success stories demonstrating reliability.
Tip: Request references from companies in your industry.
3. Request a transparent EOR quote
Submit your hiring needs—headcount, salary, work locations—and get a clear quote. Deel’s pricing breakdown shows gross salary, employer payroll taxes (7.65% federally plus state UI and workers’ comp), and a flat EOR fee. No hidden setup or exit costs.
Tip: Compare costs before you expand—read our article EOR vs. Entity Costs: What’s More Affordable?
4. Submit a 12–24-month hiring plan
Provide your expected headcount and roles over the next one to two years. The EOR uses that to forecast costs and compliance filings.
Tip: Deel’s AI-driven workforce planning software helps you adjust plans in real time, enhancing cost-effectiveness.
5. Create the employment contract in the platform
Draft at-will employment agreements using the EOR’s contract generator. Incorporate required federal clauses (e.g., FMLA eligibility) and state-specific rules (e.g., New York notice obligations). Deel’s contract generator is always up-to-date with the latest regulations. Once approved, the EOR reviews the contract.
Tip: Leverage Deel’s IP Guard add-on to secure invention-assignment clauses.
6. Confirm the candidate’s right to work
Collect Forms I-9 via Deel’s secure portal. Deel EOR reviews identification documents per USCIS guidelines and retains them per record-keeping rules. You stay compliant with I-9 retention and anti-discrimination requirements.
Tip: Use Deel Immigration services for visa and work permit support if hiring foreign nationals.
7. Run the onboarding workflow
Automate new-hire tasks in the Deel platform: background checks, benefit enrollment, W-4 and state-tax forms, and direct-deposit setup. EOR handles payroll registrations and sets up workers’ compensation coverage.
Tip: Use Deel Engage to roll out training and performance goals, and Deel IT to provision equipment.
8. Maintain ongoing compliance
Your EOR provides continuous monitoring of US federal and state regulations, real-time alerts for minimum wage changes, and automated payroll tax filings (including quarterly Form 941 and state tax returns). Deel Compliance Hub flags workforce risks and suggests corrective actions.
Tip: Subscribe to Deel’s compliance newsletter to receive clear and concise summaries of relevant compliance changes.
Platform Tour
Employment compliance tasks an Employer of Record manages in the United States
Hiring in the US means meeting strict statutory and operational requirements. An EOR like Deel ensures full compliance by managing all mandatory employer obligations, reducing risk, and overhead.
| Category | Key Requirements (2025) |
|---|---|
| Statutory employer costs | Employers in the US must contribute between 9.5%–12.5% of an employee’s salary to cover statutory programs. These include Social Security (6.2%) up to $10,453.20, Medicare (1.45%), Federal Unemployment (0.6%) up to $42, State Unemployment (1%–4%) depending on the state, Workers’ Compensation (0.25%–0.3%), and Payroll Tax (0.38%) in California. Rates vary by state. All are invoiced monthly by government agencies. |
| Employment contracts & probation rules | Written employment contracts are not mandatory in the US Most employment is at-will, meaning either party can terminate at any time without cause or notice. Probation periods are not legally required or standardized but may be included in internal policy. Non-compete clauses are generally unenforceable post-employment under new Department of Labor rules. Non-solicitation clauses remain enforceable, especially for up to 6–24 months post-employment, depending on state law, industry, and reasonableness. |
| Pay and working hours | The federal minimum wage is $7.25/hour, but many states and localities require higher minimums. Salaried employees must meet federal or state minimum salary thresholds, typically at least $35,568/year, to qualify as exempt from overtime. Full-time roles typically follow a 40-hour workweek, 8 hours/day, Monday to Friday. Part-time roles usually require a minimum of 20 hours/week. Overtime eligibility is governed by the Fair Labor Standards Act (FLSA) and depends on salary level, job duties, and pay struc |
| Payroll compliance | Gross salary includes base pay plus bonuses and allowances. Net salary is calculated by subtracting federal, state, and local taxes and other deductions (e.g., health insurance, 401(k), garnishments). Payroll is pro-rated based on days worked, and taxes are withheld based on federal rules and the employee’s state of residence. Payslips must itemize all deductions, including Social Security (OASDI), Medicare, state disability, and family leave where applicable. |
| Vacation and public holiday allowances | A minimum of 15 days paid leave (combined with sick leave) is standard. Accrual begins on the start date and rates vary by contract. Most states forfeit unused leave, but some (e.g., CA, CO, MT, NE) allow carryover. Unused leave is paid out on termination. The US has no statutory holidays, but employers commonly observe 6 federal holidays and 5 Federal Reserve holidays. Holiday pay is not mandatory, and substitution for personal observance days is allowed. |
| Income taxes | The US uses a progressive income tax system. Federal, state, and local taxes are withheld by employers and remitted directly. The 2025 federal tax rates range from 10% to 37% based on income and filing status. Tax applies to salary, bonuses, and allowances. Employees must file annual returns by April 15 for federal taxes. State deadlines vary. Withholding is based on the W-4 form. All workers are taxed, regardless of classification. |
| Expenses, allowances, and bonuses | Reimbursable expenses must be clearly work-related and substantiated with receipts or logs. Common examples: travel, equipment, or internet costs for remote work. Allowances (e.g. phone or home office stipends) and bonuses are considered taxable income unless explicitly excluded under IRS rules. These must be reported and are subject to payroll and income tax withholding. Proper documentation and timely processing help ensure compliance. |
| Maternity, paternity, parental, adoption & foster leave | Under the Federal Family and Medical Leave Act (FMLA), eligible employees are entitled to 12 weeks of unpaid, job-protected leave. To qualify, they must have worked at least 12 months for the same employer and logged 1,250 hours in the past year. This applies to birth, adoption, or foster placement. Leave must be requested 30+ days in advance, with medical documentation submitted within 15 business days. State laws may offer additional paid or extended leave entitlements. Employers can optionally provide paid leave per internal policy. |
| Sick leave, bereavement leave, and carer’s leave | Sick leave is typically included in a combined paid time off (PTO) policy, with a minimum of 15 days for full- and part-time employees. There is no federal law requiring paid sick leave. Unused PTO may roll over in California, Montana, and Nebraska (up to 1.75× annual entitlement). In other states, unused PTO is generally forfeited. Up to 12 weeks of unpaid leave is available under the Family and Medical Leave Act (FMLA) for serious health conditions or family care. Bereavement leave is not federally required and is at the employer’s discretion. Additional leave for caregiving or life events may be offered based on internal policy. |
| Terminations and resignations | Employment is generally at-will and can be ended by either party without notice. Legally, no notice is required, but two weeks' notice is a common best practice to reduce litigation risk. Severance is not mandatory, but many employers offer at least two weeks' pay to reduce legal exposure. COBRA continuation of benefits must be offered to eligible employees, who pay premiums themselves. Unused vacation is usually paid out where required by state law or company policy. No formal disciplinary process is required before termination. Terminations should align with payroll cut-off cycles to ensure timely final payments. |
| Misclassification risk | Misclassifying employees as independent contractors exposes employers to serious risks, including liability for back wages, unpaid benefits, tax violations, and workplace claims. US enforcement has intensified, with multi-million-dollar settlements across logistics, tech, food, and construction sectors. States like California apply strict tests (e.g. ABC test) that presume worker status as employees unless the employer proves otherwise. Review classification carefully—courts and agencies do not defer to contracts alone. |
| Data protection & IP protection | Employers must comply with federal and state laws regulating employee data privacy, such as HIPAA and state-specific data breach laws. Requirements include secure data handling, access restrictions, breach response plans, and transparency in use. Background checks must comply with privacy regulations. Employers should also implement IP protection policies through NDAs and confidentiality clauses, especially in sensitive sectors. Proper due diligence on candidate history and IP respect is essential for compliance and risk mitigation. |
Continuous Compliance™
How much does an EOR in the United States cost?
When you hire through an EOR, your cost structure breaks down into three parts:
- Gross salary: The agreed annual compensation.
- Statutory employer costs: 7.65% payroll taxes + state unemployment insurance & workers’ compensation (varies by state).
- Deel EOR fee: Flat monthly rate per employee, no hidden extras.
Here’s a breakdown of the costs you’ll face when setting up your own US entity compared to hiring through Deel’s EOR:
| Factor | Your own US entity | Deel EOR |
|---|---|---|
| One-off costs | $41,714 up-front | $0 |
| Annual, recurring costs | $44,905 | $0 |
| Deel Employer of Record service fee | N/A | $7,188 per employee |
| Estimated total annual costs | $86,619 | $7,188 |
| Time to first hire | 1-2 weeks | 1 business day(s) |
Deel’s flat-fee pricing ensures you never face surprise add-ons. You get a single invoice covering payroll processing, taxes, benefits, and compliance so that you can budget precisely.
Check our Employee Cost Calculator to see the full cost of hiring talent in the US, including salary, taxes, pensions, and statutory fees.
Global Hiring Toolkit
Which United States EOR should you choose?
When evaluating US EOR services, compare three key criteria:
- Entity ownership: Ensure the provider owns its US legal entity to avoid subcontracting risks and costs. Wholly-owned entities guarantee direct control over payroll, tax filings, and benefits administration
- Compliance expertise: Look for real-time compliance monitoring, local HR experts, and workforce insights. Deel Compliance Monitor tracks federal and state regulation changes, flagging risks before they become violations
- Platform breadth & integrations: Prioritize an EOR provider that handles everything from job requisitions and background checks to global payroll in 150+ countries, benefits management, equity grants, IT deployment, and immigration services
See also: Owned Entity vs. In-Country Partner: The Best Choice for Global Hiring
Discover how Cake saved +$3k per hire in compliance costs with Deel
Cake is on a mission to simplify employee equity plans through its comprehensive platform, so worldwide companies can distribute equity options among employees in minutes.
However, getting boots on the ground in strategic regions and hiring globally can be expensive, time-consuming, and fraught with risk. Cake needed a plug-and-play solution that could help it achieve its global hiring ambitions with the least amount of administration possible.
With Deel EOR, Cake quickly hired key roles across the world, with a particular focus on having a US presence.
"Deel ensures cost-effective global hiring, providing confidence in compliance, especially in the complex landscape of US employment laws." —Charlie Ross, Chief Operating Officer at Cake
Is Deel Employer of Record a strong choice for hiring in the United States?
Yes, Deel is a top choice for hiring in the United States thanks to its wholly-owned US entity, which ensures full compliance with federal law and state employment regulations. Deel’s platform simplifies payroll taxes, benefits, and tax filings across all 50 states, letting you hire quickly without entity setup headaches.
With Deel, you get:
- Wholly-owned US entities ensure control and compliance, and reduce risks and costs
- Trusted G2 leader with high user satisfaction and positive reviews
- Coverage in 150+ countries for seamless global hiring and workforce management
- Transparent pricing with flat fees, no hidden costs
- Hands-off Social Security, Medicare, state unemployment insurance, and workers’ compensation contributions
- Support with at-will employment contracts and federal/state-specific rules
- Real-time compliance monitoring with Deel Compliance Monitor
- Automated onboarding, payroll processing, and benefits administration
- Protected employee data under CCPA and state privacy laws
- AI-powered workforce planning and compensation insights
With Deel, you skip entity setup delays and costly compliance errors, keeping your US hiring smooth and scalable.
See also: More Than a Service: EOR as a Strategic Partner in Business Growth
Hire employees in the United States confidently with Deel Employer of Record
Deel’s Employer of Record service eliminates months of entity registration and complex paperwork, letting you hire within days. You’ll see how easy it is to manage multi-state payroll, taxes, and benefits—all under one transparent pricing model.
Book a demo to see how easy it is to onboard your next US hire. Don’t let entity setup or complex local employment laws slow your growth—let Deel handle the hard parts so you can hire faster and smarter.
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FAQs
How long does onboarding take with Deel’s US EOR?
Typically, onboarding is completed within days, bypassing entity registration delays.
Does the employee need a US bank account?
Yes, employees must have a US bank account for payroll deposits.
What type of employment contract is used?
Deel uses at-will employment contracts compliant with federal and state laws.
How does Deel handle tax withholding?
Deel withholds federal and state payroll taxes, including Social Security and Medicare.
When are payroll deadlines?
Payroll is processed according to your schedule, but always complies with US regulations.
What benefits are provided?
Deel administers standard benefits, including workers’ compensation and optional packages per your plan.
Is there a probation period in US contracts?
US law does not require a probation period; Deel’s contracts reflect this at-will employment.
How does Deel protect IP rights?
Deel’s IP Guard ensures invention-assignment clauses are embedded to protect your intellectual property.
Can I hire remotely across different US states?
Yes, Deel manages compliance across all 50 states via its wholly-owned entities.
What if employment laws change?
Deel monitors regulatory updates in real time and adjusts compliance automatically to keep you protected.
About the author
Jemima is a nomadic writer, journalist, and digital marketer with a decade of experience crafting compelling B2B content for a global audience. She is a strong advocate for equal opportunities and is dedicated to shaping the future of work. At Deel, she specializes in thought-leadership content covering global mobility, cross-border compliance, and workplace culture topics.
