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Employee Benefits, Insurance & Workspace: What EORs Provide

  • Apr 16
  • 16 min read


Table of contents:




Introduction


When companies first look at employer of record services, they ask the same question: Who handles payroll?


That is the right starting point. But it is not the full picture.


The part most decision-makers miss, and where compliance problems actually happen, is everything else: statutory health insurance, pension contributions, annual leave entitlements, maternity pay, overtime rules, relocation packages, immigration-related employment benefits, and workspace arrangements. These are not perks. In most countries, they are legal obligations. Get them wrong, and you are not just behind on a spreadsheet, you are facing fines, back-pay orders, and damaged relationships with the employees you just spent months recruiting.


This guide is about what a good EOR actually provides, country by country, benefit by benefit, so you can go into your next expansion with a clear picture of what is covered and what questions to ask.



Beyond Payroll: The Full Scope of Employer of Record (EOR) Services


Here is the misconception that causes the most problems. Companies think of employer of record services as a payroll mechanism. The EOR processes salaries. That is the product.


That framing misses roughly half of what the EOR is legally responsible for.


When an EOR becomes the legal employer of your staff in a given country, they do not just pay salaries. They take on the full employment relationship under local law. That includes every statutory obligation that comes with it.


What EOR Services Include Across Payroll, Compliance, and Benefits


Payroll and tax: Processing salaries in local currency, calculating and remitting income tax withholdings, managing currency and payment timelines.


Statutory benefits: Annual leave, sick pay, maternity/paternity leave, public holiday entitlements — all administered according to the labour code of the specific country.


Health insurance and social contributions: Mandatory enrollment, contribution calculations, remittances to local social insurance funds, and employer-side contributions above salary.


Pension contributions: Tiered or flat employer and employee pension deductions, filed and remitted correctly per jurisdiction.


Employment contracts: Drafted in the local language where required, covering all mandatory clauses, and updated when laws change.


Visa sponsorship and immigration-related employment benefits: Where applicable, the EOR acts as the legal sponsor for work permits and residence applications, a form of employer-provided benefit that is critical for any company relocating foreign nationals.


Workspace provisions: Equipment, coworking memberships, and virtual office arrangements, depending on the EOR's service model and the country's employment expectations.


A regional EOR with owned entities, not an aggregator relying on local partners, manages all of this directly, under one accountable legal structure. That distinction matters a great deal when an employment audit happens.




Statutory vs Supplementary Benefits: What Employers Must Provide vs What Wins Talent


Before going country by country, it is worth being clear on the two-layer structure of employee benefits in every market.


  • Statutory benefits are legally mandated. They are not negotiable, not optional, and not waivable by the employee even if they ask. They include minimum annual leave, sick pay, maternity leave, social security contributions, and, in some countries, mandatory health insurance. Missing a statutory benefit is not an HR oversight. It is a legal violation, subject to fines, back-pay claims, and sometimes criminal liability for the responsible entity.

  • Supplementary benefits are voluntary. They are what you offer beyond the legal minimum to attract and retain talent, private health insurance above the state baseline, learning and development stipends, meal allowances, and flexible working arrangements. They are not required by law, but in competitive markets like India's tech sector or Georgia's growing startup scene, they are often what separates a job offer that gets accepted from one that gets declined.


An EOR handles both layers. They ensure the statutory obligations are met — automatically, without you needing to track every regulatory update — and they can structure and administer supplementary benefits in a way that is tax-efficient and compliant in each country.


The risk of getting statutory benefits wrong is not theoretical. In India, missing Provident Fund contributions triggers penalties starting at INR 200 per day. In Turkey, failure to remit social security contributions on time results in interest charges and regulatory exposure. In Armenia, late tax payments incur daily interest of 0.075%. These are real numbers that accumulate fast.


An EOR absorbs that compliance responsibility and the liability that goes with it.



Health Insurance in EOR Employment: Mandatory Coverage vs Market Expectations


Health insurance is one of the most variable benefit obligations across the markets in this cluster. Some countries have a fully public healthcare system with mandatory employer contributions. Others have hybrid models. A few have recently made private health insurance mandatory. And in some markets, offering private health insurance above the statutory baseline is not a nice-to-have, it is what qualified candidates expect.


Here is how it breaks down:


  • Armenia — mandatory health insurance from 2026: Starting this year, Armenian employers must withhold and remit approximately $28 (AMD 10,800) per employee per month for mandatory health insurance. This is new. Companies hiring in Armenia without an EOR that tracks regulatory changes would likely miss this. An EOR handles enrollment, withholding, and remittance automatically.

  • India — Employee State Insurance (ESI): ESI applies to employees earning a gross salary of ₹21,000 or less per month. Employees contribute 0.75% and employers contribute 3.25% of gross wages. For higher earners, private health insurance is not a statutory requirement — but in India's tech talent market, a company-sponsored group health policy is close to table stakes for hiring senior engineers.

  • Turkey — social security health coverage: Turkey's social security system covers health insurance as part of the broader contribution structure. Employees pay 14% of gross salary (including health), and employers pay 20.75%. The state health system is the baseline. Many companies offering roles to skilled Turkish professionals complement this with private health top-ups.

  • Azerbaijan — statutory health and social contributions: Employers in Azerbaijan are required to administer health insurance and pension contributions under the labour code. Employer payroll contributions run approximately 17–24.5% on top of salary. The EOR handles registration with the relevant authorities and ongoing remittances.

  • Kazakhstan and Uzbekistan: Both countries operate mandatory social insurance systems that include healthcare components. In Uzbekistan, a new State Social Insurance Law came into effect on January 1, 2026, centralising benefit payments through the State Fund for Social Insurance. Employer contributions are approximately 12.1% of salary. Kazakhstan's contribution structure covers healthcare, pension, and social insurance in a combined employer obligation.


For foreign nationals being relocated into any of these markets, health insurance intersects directly with visa and work permit requirements. In some countries, proof of health coverage is a required document in the permit application. An EOR that handles both immigration and benefits, under one entity, closes that gap without back-and-forth between separate vendors. For context on how work permit and visa sponsorship connects to benefit entitlements, see our guide on work permits and visa types by region.



Employee Leave Entitlements: Annual Leave, Sick Leave, Maternity, and More


Leave entitlements are where a lot of companies get caught out, especially when they are managing international employees for the first time and applying their home-country policies to foreign hires.


Every country in this cluster has its own statutory minimums. They are not transferable. You cannot offer an Indian employee the same leave policy as your UK team and call it compliant. You apply local law.


Here is the baseline by market:


  • Georgia: 24 working days of paid annual leave. Sick leave is unpaid by default under Georgia's Labour Code, though many employers supplement this. Maternity leave is 730 days total, with 183 days paid (or 200 days for complications). Paternity leave is 5 calendar days.

  • Armenia: 28 calendar days of minimum annual leave. Maternity leave of 140 days (70 before birth, 70 after), fully paid. Overtime must be compensated at a minimum of 150% of the standard rate. Employees accrue leave entitlement after six months of service.

  • Azerbaijan: Annual leave is a minimum of 21 calendar days. Maternity leave runs 126 days for uncomplicated births. Severance pay starts at 0.5x average monthly salary for shorter tenures and increases with service length.

  • Turkey: Annual leave is tiered by tenure — 14 days for 1–5 years of service, 20 days for 5–15 years, and 26 days for employees with more than 15 years. 14 public holidays. Maternity leave is 16 weeks (8 before and 8 after birth). Employees with at least one year of service are entitled to severance of one month's gross salary per year of service.

  • India: The Factories Act mandates 12 days of earned leave per year for many employee categories, though many companies — especially in tech — offer 15–25 days. Maternity leave for women with fewer than two surviving children is 26 weeks, paid. Paternity leave is not statutorily mandated at the central level but is common in corporate policy.

  • Kazakhstan: 24 calendar days of minimum annual leave. Overtime pay is a minimum of 150% of the regular rate, with 1-hour caps on daily overtime for hazardous conditions. Night-shift premiums are legally required.

  • Uzbekistan: 21 working days of minimum annual leave. Under the December 2025 amendments to the Labour Code, the first two hours of overtime must be compensated at 1.5x the regular rate, and any hours beyond that at double. All leave registrations from January 1, 2026, must be processed through the government's labour portal, my.mehnat. Missing this digital registration step is a compliance violation.


An EOR does not just know these rules, it builds them into its payroll and HR processes from day one. Leave accrual, public holiday calendars, and overtime calculations are automated, not manual. For further details on how employer sponsorship obligations connect with employee entitlements in the Caucasus, see our article on employer sponsorship in Georgia.



Pension, Social Security, and Mandatory Contributions in EOR Hiring


This is the section where the real cost of employment becomes clear. Statutory contributions, pension, social security, and unemployment insurance, are employer obligations that sit on top of gross salary. They are invisible in an offer letter but very visible in your cost-of-employment budget.


Here is the market-by-market breakdown:


Pension and Social Contributions in Armenia


  • Employee income tax: flat 20%

  • Pension contributions: tiered 5–10%, capped at AMD 87,500 per month

  • Military Stamp Duty: up to AMD 15,000 per month

  • Mandatory health insurance (from 2026): AMD 10,800 per month

  • EOR handles all withholdings and remits to the State Revenue Committee's digital platform.


Pension and Social Contributions in Azerbaijan


  • Employer payroll contributions: approximately 17–24.5% on top of salary

  • Covers pension, social insurance, and healthcare

  • Minimum wage: AZN 400 per month (effective January 2025)

  • All filings are managed through the relevant government portals by the EOR.


Pension and Social Contributions in Turkey


  • Employee contributions: 14% social security + 1% unemployment insurance

  • Employer contributions: 20.75% social security

  • Progressive income tax: 15–40% applied to cumulative earnings

  • Monthly withholdings are calculated and remitted by the end of the following month.


Pension and Social Contributions in India


  • Employees' Provident Fund (EPF): 12% from both employee and employer on basic salary plus dearness allowance. The employer's 12% splits into 3.67% to EPF and 8.33% to the Employees' Pension Scheme (EPS), capped at ₹15,000/month.

  • Employee State Insurance (ESI): 3.25% employer / 0.75% employee for salaries up to ₹21,000/month.

  • Gratuity: 4.81% of basic salary, accruing for employees with 5+ years of service.

  • Professional Tax: varies by state.


Pension and Social Contributions in Kazakhstan


  • Individual income tax: 10% flat

  • Mandatory pension contributions: 10% employee contribution

  • Mandatory social health insurance: employer and employee contributions combined

  • Social security contributions: approximately 3.5% employer


Pension and Social Contributions in Uzbekistan


  • Personal income tax: 12%

  • Employer social contributions: approximately 12.1%

  • New State Social Insurance Law (effective January 2026) centralises benefit payments through the State Fund for Social Insurance

  • All payroll and social contribution filings are due by the 15th of the following month.


These numbers add up quickly. In India, for example, total employer contribution overhead can add 20–25% on top of an employee's gross salary when you account for EPF, ESI, gratuity, and statutory bonus. In Turkey, the employer-side social security contribution alone is 20.75%. This is not something you want to discover after you have already agreed on compensation.


An EOR builds these contribution rates into your total cost-of-employment model upfront. You see the real number before you make an offer, not after.



Relocation Benefits and Immigration-Related Employment Benefits Through an EOR


Here is a concept that creates more confusion than it should: what does it mean for employment to include an immigration-related benefit?


When a company asks whether a candidate will require sponsorship for employment, they are asking whether the candidate needs an employer to legally authorise their right to work. That authorisation, a work permit, a visa, a sponsored residence application, is itself an employment benefit that the employer provides. It is not a separate administrative process. It is part of the employment relationship.


An EOR that operates owned entities in target markets can provide this benefit directly. They act as the legal employer on immigration filings, sponsor the work authorisation, and carry the compliance obligations that go with it. For companies hiring foreign nationals, or relocating existing employees into a new country, this is one of the most valuable things an EOR delivers.


Beyond visa sponsorship, relocation packages structured through an EOR can include:


  • Housing allowances: In markets like Kazakhstan or Uzbekistan, where company-arranged housing is common for relocated expatriates, the EOR can administer a housing allowance as part of the employment contract, treated correctly under local tax rules.

  • Transport and commuting allowances: Particularly relevant in Turkey and India, where commuting costs are significant, and transport allowances are a common supplementary benefit.

  • One-time relocation payments: The EOR can structure these as reimbursements or allowances under the employment contract, ensuring they are accounted for correctly in payroll and tax filings.

  • Dependent support: In some markets, benefits for employee dependents, health coverage, and education allowances can be built into the employment package.


Getting the tax treatment of relocation benefits right is a compliance point most companies overlook. A housing allowance structured incorrectly becomes taxable income in the employee's hands, with employer withholding obligations. An EOR handles these distinctions automatically based on the specific country's tax treatment of each benefit type.


For the mechanics of employee relocation into specific markets, see our dedicated guide on relocation legal requirements and practical steps. For how EOR-sponsored visas work as an enterprise hiring tool, see our article on EOR-sponsored visas for enterprise businesses.



Workspace and Infrastructure: What EOR Providers Actually Deliver





Workspace is where EOR conversations often go quiet, because it is genuinely more variable than benefits and payroll. Different EORs handle it differently, and the line between what is covered and what is optional depends heavily on the provider and the market.


Here is what to expect and ask about.


Equipment Provisioning for Remote Employees


Many EORs include a laptop, phone, or peripheral setup as part of their onboarding service — either directly procured in-country or reimbursed through the employment contract. For remote-first hires in markets like Georgia or Armenia, where there is no company office to report to, equipment matters from day one.


Coworking Memberships and Office Access


A growing number of EOR providers offer coworking access as a built-in or optional benefit. For employees in cities like Tbilisi, Yerevan, Almaty, or Tashkent, a dedicated desk in a local coworking space gives the employee a professional work environment without requiring the company to lease office space. In India, coworking costs typically run ₹5,000–₹15,000 per seat per month, depending on location and amenity level. In Central Asia and the Caucasus, comparable options are available at lower cost.


Virtual Office Setup and Compliance Considerations


For companies that need a registered local business address, for credibility with local clients, for banking, or for certain permit applications, a virtual office arrangement can be structured alongside the EOR engagement. This is distinct from the EOR's own registered entity; it is an address service for the client company's correspondence.


Permanent Establishment Risk and How EOR Mitigates It


This is the compliance dimension of workspace that matters most. If an employee working under an EOR arrangement has decision-making authority, concludes contracts, or otherwise creates the impression of a permanent business presence in the country, it can trigger permanent establishment status for the foreign company, creating unexpected corporate tax exposure. A good EOR advises you on structuring roles to avoid this, and makes sure employment contracts are scoped correctly to limit exposure.


In practice, most companies using EOR for remote hires keep the workspace arrangement simple: home-based or coworking, with the EOR facilitating equipment and desk access. For companies deploying relocated employees in a new market, the workspace conversation becomes more involved and should happen before, not after, the employment contract is signed.



Benefits by Country: What You're Required to Provide





Think of this section as a reference you can return to. These are the non-negotiable statutory obligations your EOR manages on your behalf in each market.


Benefits in Georgia



  • Annual leave: 24 working days minimum

  • Sick leave: No statutory paid sick leave (employer-provided sick pay is common but not required)

  • Maternity leave: 730 days total, 183 days paid by the state

  • Paternity leave: 5 calendar days

  • Minimum wage: No national minimum wage (market-driven)

  • Income tax: Flat 20%

  • Social contributions: Employer contributions approximately 2% to state social security

  • 2026 update: Special Labour Permit required for all foreign workers from March 1, 2026 — a compliance change with direct impact on any company hiring foreign nationals in Georgia


Benefits in Armenia



  • Annual leave: 28 calendar days minimum

  • Sick leave: Paid, covered by the state Social Insurance Fund

  • Maternity leave: 140 days paid

  • Mandatory health insurance (2026 new): ~$28 (AMD 10,800) per employee per month

  • Income tax: Flat 20%

  • Pension contributions: Tiered 5–10%, capped at AMD 87,500/month

  • Military Stamp Duty: Up to AMD 15,000/month

  • 2026 update: All contracts must be executed through the SRC digital platform. Paper contracts must be digitised by the end of 2026. From August 2026, foreign employees must enter on a Work Visa; tourist-status switches are no longer permitted.


Benefits in Azerbaijan




  • Annual leave: 21 calendar days minimum

  • Maternity leave: 126 days for an uncomplicated birth

  • Minimum wage: AZN 400/month (effective January 2025)

  • Employer payroll contributions: ~17–24.5% on top of salary (social insurance, pension, healthcare)

  • Severance: 0.5x–2x average monthly salary, depending on service length

  • Compliance note: Azerbaijan has the strictest foreign worker authorisation regime in the Caucasus — no foreigner can work without a prior work permit and residence permit. No informal workarounds exist.


Benefits in Turkey



  • Annual leave: 14–26 days, depending on tenure

  • Public holidays: 14 per year

  • Maternity leave: 16 weeks paid

  • Severance: 1 month's gross salary per year of service (for employees with 1+ year tenure)

  • Employee social security: 14% + 1% unemployment

  • Employer social security: 20.75% + 2% unemployment

  • Maximum working hours: 45 per week

  • Compliance note: C-suite titles (CEO, CFO) are not possible under the EOR model in Turkey — a structural limitation that matters for companies placing senior executives.


Benefits in India



  • EPF: 12% employer + 12% employee on basic salary

  • ESI: 3.25% employer + 0.75% employee (for salaries up to ₹21,000/month)

  • Gratuity: 4.81% accrual for employees with 5+ years of service

  • Maternity leave: 26 weeks paid (for employees with fewer than two surviving children)

  • Annual leave: Varies by state and sector — typically 12–15 days earned leave per year

  • TDS compliance: Monthly withholding filings — missed filings incur penalties from INR 200/day

  • 2026 tax note: Under the new tax regime, income up to ₹12.75 lakh (including ₹75,000 standard deduction) is effectively tax-free for salaried individuals for FY 2025–26.


Benefits in Kazakhstan


  • Annual leave: 24 calendar days minimum

  • Overtime pay: Minimum 150% of regular rate; maximum 2 hours/day

  • Pension contributions: 10% employee mandatory contribution

  • Social health insurance: Combined employer and employee contributions

  • Income tax: Flat 10%

  • Compliance note: The 90/10 quota rule and 15-day domestic vacancy posting requirement apply before any foreign work permit can be processed. An EOR manages both requirements as standard workflow.


Benefits in Uzbekistan



  • Annual leave: 21 working days minimum

  • Sick leave: Paid through the State Fund for Social Insurance (new structure from January 2026)

  • Maternity leave: Paid through state social insurance

  • Employer social contributions: ~12.1%

  • Personal income tax: 12% flat

  • Overtime (from November 2025 amendment): 1.5x for first two hours; 2x for additional hours

  • 2026 update: All leave registration must be processed through my.mehnat from January 1, 2026. Maternity and sick leave payments are now automatically assigned through the Unified Social Protection Registry.



Supplementary Benefits That Attract and Retain Global Talent


Statutory minimums get you compliant. Supplementary benefits get you competitive.


In markets with tight tech talent, Bangalore, Tbilisi, Almaty, Yerevan, the difference between an offer that closes and one that gets turned down often has nothing to do with base salary. It comes down to what else is on the table.


Here is what actually moves the needle in these markets:


Private Health Insurance Beyond Statutory Requirements


In India, group health policies covering the employee and their family are close to universal among tech employers. In Turkey and the Caucasus, private coverage above the social security baseline is increasingly expected by professionals who have worked at international companies. An EOR can administer group health plans and bill them correctly through the employment relationship.


Learning and Development (L&D) Budgets and Stipends


Particularly effective in India and Armenia, where the workforce skews young and growth-oriented. A $500–$2,000 annual L&D budget, structured as an expense reimbursement through the EOR, costs relatively little and ranks consistently high in employee satisfaction surveys.


Meal Allowances and Transportation Benefits


In Turkey and India, commuting costs are real and significant. A monthly meal or transport allowance, structured correctly as a non-taxable benefit where local law allows, adds visible value to total compensation without increasing gross salary.


Flexible and remote working provisions


While not a financial benefit, formal flexibility — documented in the employment contract, is a retention driver in every market in this cluster. Countries like Georgia and Armenia have populations of highly skilled professionals who have worked remotely for years. Offering rigid in-office requirements is a competitive disadvantage.


Mental health and wellness support


EORs in 2026 are increasingly bundling mental health benefits into their standard packages, employee assistance programs, wellness app subscriptions, and mental health days beyond sick leave. This is not charity. In high-pressure roles in emerging market tech hubs, burnout is a real attrition driver.


An EOR that understands your target market, not just its labour law, but its talent expectations, can advise on which supplementary benefits actually move hiring and retention metrics. That is the difference between a transactional EOR and a strategic hiring partner.



Frequently Asked Questions


What does sponsorship for an immigration-related employment benefit mean?


It means the employer is providing a work authorisation, a permit, visa, or sponsored residency, as a formal part of the employment relationship. When a candidate "requires sponsorship for employment," it means they need the employer to file and take legal responsibility for their right to work in a specific country. An EOR with owned entities can provide this sponsorship in the markets it operates without the client company needing its own registered entity.


Does an EOR handle supplementary benefits or just statutory ones?


Both. A good EOR manages statutory obligations (leave, health contributions, pension) as non-negotiable compliance, and can administer supplementary benefits, private health plans, L&D stipends, allowances, on your behalf, structured and taxed correctly under each country's rules.


What is included in employer of record payrolling beyond salary?


Employer of record payrolling covers gross salary calculation, income tax withholding (TDS in India, flat 20% in Armenia and Georgia, progressive 15–40% in Turkey), all statutory employer contributions (EPF, ESI, social security, pension), mandatory benefit deductions, and net salary disbursement in local currency. The EOR files all returns with the relevant tax authority on the applicable deadlines.


Can an EOR provide workspace for my employees?


Yes, though coverage varies by provider. Equipment provisioning, coworking memberships, and virtual office arrangements are available through many EOR services, either as standard inclusions or add-ons. For remote employees in markets like Georgia or Armenia, a coworking membership delivered through the EOR is the most common workspace solution.


What happens if an EOR misses a statutory benefit filing?


The EOR is the legal employer, so liability sits primarily with them. That said, choosing an EOR with owned entities and in-country compliance teams significantly reduces the chance of a miss in the first place. Ask any prospective provider: What is their process for tracking regulatory changes in each country? How did they communicate Armenia's 2026 mandatory health insurance requirement or Uzbekistan's January 2026 social insurance law change to existing clients? The answer tells you how they operate when it matters.



Ready to Build Your Team With Full Benefits Coverage?


Team Up operates owned legal entities in Georgia, Armenia, Azerbaijan, Turkey, India, Kazakhstan, Uzbekistan, and Egypt. Our in-country teams manage statutory benefits, insurance contributions, and payroll compliance directly, not through aggregator affiliates.


Every client gets a full benefits breakdown before the first hire: statutory obligations, employer contribution overhead, and supplementary options that fit the local market.




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