Contractor of record: what it costs and what it protects you from

Contractor of record in four numbers

Price range

$99 to $400per contractor per month

Most common price

$325Deel, Remote, Rippling (third-party)

Plain contractor payments

$2 to $49no classification cover

Remote CM Plus indemnity

$100,000per contractor, $1M aggregate

A contractor of record sits between two cheaper and one dearer option. Plain contractor payment platforms pay invoices but leave classification to you. An employer of record hires the person as an employee, with employer contributions and statutory benefits on top of its fee.

What each provider charges

The premium over plain payments is the real price of the protection: $276 a month at Deel ($325 less $49), $296 at Remote ($325 less $29) and $360 at Multiplier ($400 less $40). Ask each provider what that premium buys in writing, because none of them publishes a full list of covered events on its pricing page.

What the indemnity covers, and what to ask

Only Remote publishes a number. Its CM Plus plan ($99 per contractor per month, a contractor management tier, not its $325 Contractor of Record product) includes an indemnity of $100,000 per contractor and $1M in total. Deel describes its Contractor of Record product as Deel taking on the classification liability, without a published cap on the pricing page. Atlas sells a $99 classification assessment that it credits against the subscription.

An indemnity is a promise to pay certain costs after the fact. Before you rely on one, get the clause and check:

1. The trigger. Does it pay only after a final ruling by a court or tax authority, or also on a settlement you agree to?
2. What it pays. Back social contributions, penalties, interest, back pay for leave and severance, and your legal fees are separate items. Check which of them the clause names.
3. The cap. $100,000 per contractor sounds large. In a country where reclassification means several years of employer contributions plus severance, add it up for your own worker.
4. Your duties. Ask whether the cover lapses if you set the contractor's hours, treat them like staff, or ignore the provider's classification advice.
5. Who is covered. Your company, or only the provider's own exposure as the contracting party.

What 5, 10 and 25 contractors cost

The fee gap understates the real gap, because an EOR also passes on employer contributions. For a worker in Mexico paid the equivalent of USD 40,000 a year, our country data puts mandatory employer costs at 31.8% of base pay (IMSS, INFONAVIT, the aguinaldo bonus, vacation premium and Mexico City payroll tax). That is $12,720. So the year looks like this:

• Contractor of record at $325: $40,000 + $3,900 = $43,900
• EOR at $599: $40,000 + $12,720 + $7,188 = $59,908

The $16,008 difference is why companies try contracting first. It is also why authorities look hard at it. See employer costs in Mexico for the line-by-line math, or run another country in the international employee cost calculator.

Contractor of record vs EOR vs plain contractor payments

For the employer of record price list and deposits, see EOR pricing by provider. For how the agent of record label compares, see EOR vs AOR.

When a contractor of record is the wrong tool

A contractor of record makes a real contracting relationship safer. It cannot rescue a relationship that is employment in practice. Move the person to an EOR when:

• You set their hours, approve their time off or require them to attend daily meetings like staff.
• They work only for you, full time, with no end date.
• The work is the core of your business, not a defined project.
• They want employee benefits, paid leave or a work permit sponsored by an employer.

For US workers the tests are different and stricter in some states. The IRS weighs behavioral control, financial control and the type of relationship. The Department of Labor proposed a new rule on Feb 27, 2026 that would weigh control and the worker's chance of profit or loss most heavily; as of October 16, 2026 it was proposed, not final. California and Massachusetts use an ABC test that presumes employment. Our W-2 vs 1099 guide covers the US rules.

Common mistakes

• Buying cover, then managing like an employer. Read what the indemnity expects from you on control before you assume it applies.
• Comparing the COR fee to the EOR fee only. The EOR price leaves out employer contributions, which can add more than the fee itself (31.8% in Mexico at USD 40,000).
• Ignoring FX. Atlas says its price excludes taxes, FX and third-party fees. Ask every provider for the exchange rate and markup on contractor payouts.
• Keeping a long-term contractor on COR for years. The longer and more exclusive the relationship, the more it looks like employment. Compare the cost of converting through our ranked EOR providers.