EOR vs PEO vs Managed Payroll. Which Does Your Company Need?
These three services are often confused, but they solve different problems and suit different situations. The right choice depends almost entirely on one question:
Do you have a Canadian entity?
This guide breaks down what each service does, who it’s for, and how to decide.
The Quick Answer
- Do you want to hire compliantly with no Canadian entity?
You need an Employer of Record. - Have a Canadian entity and want HR, payroll, and benefits admin support?
A PEO style service may be the right fit. - Have a Canadian entityand only need accurate payroll run and remitted?
You need Managed Payroll.
Employer Of Record (EOR)
What It Is
We become the legal employer of your Canadian workers through our own Canadian entity. We hold the employment contracts, run payroll, remit taxes, administer benefits, and carry the compliance obligations. You direct the employee’s day-to-day work.
Who It’s For
Companies that do not have a Canadian legal entity and want to hire Canadian employees without incorporating. This is the most common path for US and international companies making their first Canadian hires, testing the market, or building a Canadian team without committing to a permanent corporate presence.
Key Benefit
You can hire in Canada within days, with no entity setup, no CRA registration, and no ongoing corporate compliance burden.
Professional Employer Organisation (PEO)
What It Is
A co-employment arrangement. You keep your Canadian entity and remain the legal employer, while we delegate some legal employer responsibilities, handling HR administration, payroll, benefits, and compliance support. All responsibilities are split between your company and ours.
Who It’s For
Companies that already have a Canadian legal entity but do not want to build an internal HR and payroll function. You get expert administrative support and benefits access while retaining your entity and your direct employment relationship.
Key Benefit
You keep your Canadian corporate presence and direct employment relationship, but offload the administrative burden of HR, payroll, and benefits to specialists.
Managed Payroll
What It Is
A focused payroll service. You keep your Canadian entity and remain the full legal employer. We process your payroll, calculate pay, apply deductions, remit to the CRA and where applicable, Revenu Québec. We also help with provincial authorities, and handle year end filings.
We do not take on broader HR or co-employment responsibilities.
Who It’s For
Companies with a Canadian entity that have their own HR function but want payroll handled accurately by Canadian specialists. Ideal if your main concern is payroll accuracy and compliance rather than broader administrative support.
Key Benefit
Accurate, compliant Canadian Payroll without the cost or complexity of running it in-house. You retain full control of everything else.
Side By Side Comparison
- Do You Need A Canadian Entity?
EOR: No. PEO: Yes. Managed Payroll: Yes. - Who Is The Legal Employer?
EOR: We are. PEO: You are the legal employer, with HR / Payroll support from the provider. Managed Payroll: You are. - Who Handles Payroll?
All Three: We do. - Who Handles HR And Compliance?
EOR: We do. PEO: Shared. Managed Payroll: You do (we handle payroll compliance only). - Who Administers Benefits?
EOR: We do. PEO: We do. Managed Payroll: You do. - Time To Start Hiring (Once completed documentation is received)?
EOR: Days, no entity needed. PEO & Managed Payroll: Requires existing entity. - Best For?
EOR: No entity, want to hire fast. PEO: Have entity, want full support. Managed Payroll: Have entity, want payroll handled.
Still Not Sure?
The decision usually comes down to your entity status and how much administrative support you want.
If you don’t have a Canadian entity, EOR is almost always the answer. If you do have one, the choice between PEO and managed payroll depends on whether you want comprehensive HR support (PEO) or just accurate payroll (managed payroll).
We offer all three services, which means our recommendation is based on what actually fits your situation, not on steering you towards a single product. A short call will give you a clear answer.
Not Sure Which Service You Need?
Book a call.
We’ll ask a few questions about your situation and tell you honestly which option fits.