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PEO vs EOR What make both different Learn more with Iberia EOR

Workforce management comes in with its own set of unique challenges and features for each company. When considering HR outsourcing solutions for your organization you will be finding PEO vs EOR options. These options stand for “Professional Employer Organization” and “Employer of record”, although they are used interchangeably it is important to consider their differences to be able to make a decision for your organization.

In this Article, we offer a chiefly understanding on the key differences between PEO and EOR. Learning their main differences and key characteristics within PEO vs EOR will help your organization to grow globally with a solution according to your goals. While an EOR and a PEO both have similar functions, the two cannot be confused.

Types of PEO services


PEO services in HR stand for “Professional Employer Organization“. These companies usually provide services to small to medium sized companies that need help hiring full-time employees.

  • The main difference between EOR and PEO is that PEO works as a partner company and is not the employer of your workforce.
  • This means, for comparison within PEO vs EOR, that although your company is relieved of HR functions it is still held accountable for legal operations for the environment of its workers.

The PEO can offer your company different benefits while handling multiple of its human resources needs. Some of the services frequently covered by PEO are:

  • Administration of Benefits for your employees
  • Audits and training for capacitation of the workforce in risk and safety. The PEO might also offer you guidance for safety and health inspections.
  • Recruiting and strategic hiring by the needs of your company.
  • In addition to payroll and tax filling assistance. It is important to note that although PEO could cover payroll there is a difference between PEO vs Payroll Service Providers (PSP).

Benefits of PEO services in Spain

Extending the operations of your business into Spain offers multiple benefits for your company. Between a skilled workforce and a diverse market it’s an appealing offer for business owners.

To hire employees in Spain cost and time effectively we share a couple of important benefits of trusting in a Spanish PEO:

  • A Spain PEO acts as an intermediary between the employer and its employees, ensuring payroll administration, benefits management, and more.
  • Between PEO vs EOR, Spain authorities recognize the arrangements created by PEO which creates an easier path for business to engage with the workforce easily.
  • Enjoying an experienced HR management specialized in Spanish labor laws and legal framework.
  • A Spanish PEO will cover your taxes and payroll management with a specialized eye on the required Social Security department.
  • Likewise, a Spanish PEO vs payroll service Providers offers you an enhanced understanding of the dynamics within the workforce and legal framework of hiring inside the country.
  • Lessen the risk of penalties for your business associated with employing personnel in a foreign country. The PEO will be managing your employees’ dynamic within the experience needed to treat the Spanish workforce.

Types of EOR

“Employer Of Record” vs PEO main difference consists of its relationship with the workforce being managed. A EOR will hire the employees on behalf of its clients.

  • When Considering a PEO vs an EOR it is important to evaluate the current needs for your business. A main difference between EOR and PEO consists of the extent in which the company is involved legally with the staff.
  • Employer Of Record vs PEO in Spain usually bring more benefits to large companies that do not own an entity inside the country.

According to the different need each country represents there is usually three types of operating EOR:

  • Direct EOR model: These EOR are characterized by local expertise and experience. Direct models of EORs usually work by their own policies and contracts according to the country and specialized experience they work under.
  • Indirect EOR model: Characterized by the reliance on partnership with partners in the country. These bring the benefits that aren’t incorporated uniquely where the model of EOR is considered. Networks of local partners are able to cover different countries for the benefit of customers.
  • Hybrid EOR model: This Model mixes both characteristics by having some of its own entities and also working in partnership depending on the country requirements.

Advantages of EOR services

Employer Of Record vs PEO offers an enhanced amount of benefits for large companies that constantly look for international workers.

  • PEO vs EOR benefits will impact differently according to the needs of each unique company. It is important to analyze which benefits are the most important for each business in their current timeline.
  • EOR is a fully legal employer. Consequently, your business will save a lot of worry in the legal Management of the workforce.
  • Foundationally Employer of Record assumes all employment risks and liabilities related to the services it offers.
  • The EOR services are more beneficial to large companies that aren’t able to focus through the process of international hiring. This since the alternative to PEO offers a full coverage for the entire process.
  • This is an excellent option for onboarding contractors and temporary employees

PEO vs EOR Outsourcing in Spain

Both PEO and EOR outsourcing in Spain will bring multiple benefits for every company starting with a bit more peace of mind. Outsourcing in Spain’s workforce is a smart move to get skilled workers, a diverse background in addition to a grasp in a possible new market.

  • PEO vs EOR outsourcing in Spain has the advantage that the Professional Employer Organization is actively more recognized in Spain.
  • However, EOR in Spain for businesses that operate outside of the country does present more beneficial proposals. Bringing an enhanced understanding of legal, cultural and risk knowledge inside of Spain it turns into an attractive offer for companies without the time to deeply research first hand.

Considering the PEO vs EOR benefits and important differences will bring your company to a new level. In Iberia EOR we specialize as an EOR outsourcing service. Likewise, we focus on helping companies in doing business inside Spain and establishing connections with countries nearby.

  • IberiaEOR will help you hire employees in Spain establishing your business presence without needing to move.
  • In addition, we will be helping you to operate compliantly according to European Employment Laws.
  • We specialize in payroll, HR, and overall outsourcing. Our team has years of experience assisting businesses established in Spain.

With our help enjoy different perks such as saving money, increasing productivity, and consultancy available according to your company needs.



PEO vs EOR evaluation consists of the different types of outsourcing HR service a company has to choose from. These options bring different benefits to the companies that apply them depending on their unique characteristics and goals.

When doing a comparison between PEO vs EOR services it is important to establish the current timeline of your company as your future goals. PEO standing for Professional Employer Organization will be an important addition as a partner company to your business structure.

Lastly, EOR (for “Employer of Record”) has the main difference of being the main employer for the outsourced workforce. PEO vs EOR services benefits will depend on your company size and reach. With IberiaEOR we cover your back with an EOR specialized service for Spanish workers and service for business.

Would you like to learn more about doing business in Spain? Check our Insights section!

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