When a company in another country offers you a remote job, it will usually hire you in one of three ways: as an independent contractor, as an employee through an employer of record, or as a direct employee. Each one changes how you're paid, who handles tax, what protection you have and what happens if the job ends. Here's what each means in practice.
Not sure which one you're being offered? Ask the recruiter directly: "Will I be hired as a contractor or as an employee, and through which company?" It's a normal question.
Independent contractor
You run your own small business, even if it's just you. You agree to provide a service, send invoices (or the payment platform creates them), and get paid.
- How you're paid: By invoice, often monthly or every two weeks, through a bank transfer or a platform like Deel or Payoneer.
- Tax: Usually nothing is deducted. You're responsible for declaring the income and paying tax and any social contributions in your country.
- Benefits: Normally none: no paid leave, sick pay or pension unless the contract says so. Your rate should be higher to make up for that.
- Flexibility: Often more freedom, and contractors can sometimes work for more than one client.
- Ending: The contract can usually end with the notice period it states, which may be short.
Most "worldwide" remote customer service roles hire contractors, because it's the simplest way for a company to pay someone in another country.
Employee through an employer of record (EOR)
An employer of record is a company that legally employs you in your country on behalf of the company you actually work for. You do the job for the real company, but your contract and payslip come from the EOR (services like Deel, Oyster and others offer this).
- How you're paid: A regular salary through local payroll.
- Tax: Income tax and social contributions are deducted for you, as with any local job.
- Benefits: At least what your country's law requires, such as paid leave and public holidays, sometimes more.
- Ending: Local employment law applies, including notice and any required severance.
This is often the most protected option for you, and a sign the company is serious about hiring in your country.
Direct employee
The company employs you itself, through its own entity in your country. It's common with large outsourcing companies (BPOs) that have offices in your country, even for work-from-home roles. You get a local contract and payslip, like any other job.
Side by side
| Contractor | Employee via EOR | Direct employee | |
|---|---|---|---|
| Contract with | The company (or its platform) | The EOR | The company's local entity |
| Tax handled by | You | Payroll | Payroll |
| Paid leave | Only if agreed | Yes, by law | Yes, by law |
| Typical pay | Higher rate, no deductions | Salary minus tax | Salary minus tax |
| Usual for | Worldwide and freelance roles | International companies | Outsourcers (BPOs) |
What to check before you sign
Whichever type it is, read the contract. Look for:
- 1.Pay: the rate, currency, whether it's hourly or monthly, and how overtime or extra hours are paid.
- 2.Pay date and method: when you'll be paid and how. See how to get paid by a foreign employer.
- 3.Hours and schedule: expected hours per week, shifts, and whether nights or weekends are included.
- 4.Equipment: who provides the computer and headset, and what happens to them if you leave.
- 5.Training: whether training is paid. It should be. A real employer never asks you to pay for training.
- 6.Notice and ending: how much notice each side gives, and whether you're paid for hours already worked if the contract ends suddenly.
- 7.Exclusivity: whether you're allowed to work for others at the same time.
- 8.Confidentiality and data: what you can and can't share, and how you must handle customer data.
Red flag: any contract or "onboarding" that asks you to pay a fee, buy a starter kit from them, or send money back. Walk away and read how to spot remote job scams.
Tax: the basics
- As a contractor for a US company, you'll likely fill in Form W-8BEN to confirm you're not a US person. It's kept by the company.
- Wherever you live, income from abroad is normally taxable at home. Some countries require you to register as self-employed.
- Keep records: contract, invoices, payment confirmations and bank statements.
This isn't tax or legal advice. Rules differ by country, so check with your tax authority or a local accountant, especially before your first tax year as a contractor.
How to compare a contractor offer with an employee offer
A contractor rate looks higher, but you pay your own tax and get no paid leave. A rough way to compare:
- 1.Take the contractor's yearly pay.
- 2.Subtract the tax and contributions you'll pay on it.
- 3.Subtract the value of the paid days off you won't get (for example, 4 weeks of leave plus public holidays).
- 4.Compare what's left with the employee's yearly take-home pay.
What to do next
Every role on Remote shows its pay and who it's open to before you apply. Browse worldwide remote jobs, and when an offer comes, use the checklist above before you sign.