Employer of Record (EOR) in Eastern Europe 2025: The Complete Hiring Guide
- Gegidze • გეგიძე | Marketing
- Apr 22
- 13 min read
Table of Contents
Is Eastern Europe still the smartest play in 2025?
You’ve been told Eastern Europe is the go-to.
And for years, it was. Great talent. Reasonable rates. Solid English. But in 2025? That same strategy might be costing you more than you think.
Because while everyone’s pouring into Poland, Romania, and the Baltics, the game is changing.
Salaries in Prague and Bucharest increased by 20–30% since 2020
Senior candidates ghost faster than you can book the final interview
Payroll compliance is getting harder for non-EU companies
And entity setup? Still months away and thousands in upfront costs
So ask yourself: do you want to compete, or get ahead?
Because the teams moving faster in 2025 aren’t just hiring in Eastern Europe. They’re looking slightly east and finding cleaner pipelines, cheaper costs, and faster onboarding in places like Georgia, Armenia, and Azerbaijan.
Same timezone. Strong talent. Less noise.
And with the right EOR, you can hire them legally in under 10 days.
So yeah, Eastern Europe’s still booming.
But if that’s all you’re looking at? You might already be late.
What is an Employer of Record (EOR) and how it works across Eastern Europe
Hiring in Eastern Europe looks easy from the outside with solid infrastructure, growing tech hubs, and talent everywhere from Poland to Bulgaria.
But once you’re past the CVs and interviews, it gets murky fast.
Can you issue a compliant contract in Slovak?
Are you registered for social contributions in Romania?
Do you even know what counts as legal termination in Hungary?
An Employer of Record (EOR) handles all of that, so you don’t have to.
Here’s what it actually means in this region:
An EOR is a third-party company that becomes the legal employer on paper, while you keep full control of the day-to-day work.
Here’s what that means across Eastern Europe:
The EOR signs the employment contract in the local language and handles tax registration, social security filings, and payroll.
They take on the legal risk, meaning if something goes wrong with compliance, terminations, or labor disputes, they’re liable, not you.
You still manage your team just like any direct hire, from training and tooling to performance and culture.
It’s how scaling teams skip the 6–12 months of entity setup, legal counsel, and banking delays. And it’s the only clean path if you’re hiring across multiple countries at once, each with its own labor code, leave rules, and red tape.
The real challenges of hiring in Eastern Europe without an EOR
Your team’s ready to expand.
You’ve found great candidates in Poland and Romania.
But then your legal team says, “We need an entity. In both.”
Momentum? Gone.
This is what most companies don’t see coming when they first look east.
Eastern Europe has talent. But hiring there without a real presence? It’s not remote-friendly, not fast, and definitely not flexible.
Here’s why:
1. You need a separate legal setup for every country
Each market has its own playbook. No shortcuts.
Local incorporation
Tax and social security registration
Corporate banking
Local legal rep and accountants
Want one hire in Budapest and one in Bucharest? That’s two full setups… minimum.
Free movement ≠ free employment
The EU allows free movement of people and goods, but employment law is still national. Each country:
Enforces its own labor code
Requires tax and social security registration
Mandates payroll filing in the local language and currency
You can’t legally hire and pay an employee in Hungary from a Romanian-registered company unless you set up a branch, subsidiary, or registered permanent establishment in Hungary.
The same goes the other way around.
What happens if you skip the setup?
If you try to employ someone in Hungary while only being registered in Romania, you’re likely violating:
Hungarian labor law
Hungarian tax and social security rules
Cross-border employment regulations
This can lead to:
Penalties for undeclared work
Retroactive tax and social security obligations
Legal disputes over contract validity
2. Labor laws are protective and highly localized
Forget blanket policies. In this region, compliance is national and precise.
In Poland, termination rules are different for fixed-term vs. indefinite contracts
In Czechia, probation and notice periods must be clearly stated in Czech
In Hungary, non-compete clauses have strict compensation requirements
Misstep, and you're exposed to reinstatements, fines, or worse.
3. Payroll is fragmented and high-risk
Each country means a new set of:
Tax rates
Contribution ceilings
Payroll deadlines
Reporting formats
Some countries require 13th-month bonuses, others mandate meal vouchers. All require filings in the local language, through local systems.
4. Contractor workarounds aren’t foolproof
Trying to classify full-time roles as contractors? Risky.
Most labor inspectors know the trick. And penalties for misclassification can backfire hard, financially and reputationally.
What an EOR in Eastern Europe and the Caucasus handles
You’ve got qualified candidates lined up in Bucharest and Baku. Maybe a frontend dev in Sofia. A support lead in Tbilisi. But one thing’s still missing: the legal framework to actually hire them.
That’s where an Employer of Record (EOR) steps in.
An EOR becomes the legal employer on paper; you can build your team across Eastern Europe and the Caucasus without setting up local entities in every country.
Here’s exactly what that looks like when you work with TeamUp:
1. Locally compliant employment contracts
Every hire gets a locally compliant employment agreement in their native language, Romanian, Georgian, Armenian, Azerbaijani, or Bulgarian, referencing national labor law, benefits entitlements, and clear terms.
Job title, responsibilities, and salary in local currency
Working hours, probation terms, notice periods
Statutory leave and holiday requirements
Optional clauses like 13th-month pay or bonus structure
We don’t use templates. We use legal teams based in the region to get it right.
2. Monthly payroll & tax filing
Once contracts are signed, we onboard your hire and manage end-to-end payroll each month.
Gross-to-net calculations
Income tax withholding and social security contributions
Currency conversion and salary payment in local currency
Payslip issuance, documentation, and government filings
You get a single invoice from us, with no hidden admin fees.
3. Registration with local authorities
Most countries require employer and employee registration with multiple agencies social funds, tax authorities, and sometimes health or pension systems.
We handle all of it.
Georgia: Revenue Service and Pension Fund
Armenia: State Revenue Committee, Military Duty tax
Azerbaijan: State Social Protection Fund
Bulgaria, Romania, and others: country-specific registrations and ongoing reporting
No legal gaps. No missed filings.
4. Leave management & statutory benefits
Paid time off, public holidays, maternity leave, sick leave, they vary widely across the region. We stay on top of every regulation so your team gets what they’re entitled to, and you stay compliant.
Examples:
Armenia: 126 days paid maternity, sick leave via social insurance
Georgia: 24 days PTO, 17 public holidays
Azerbaijan: 21 days annual leave, 14 weeks maternity leave
Bulgaria: 20 days paid leave, 410 days maternity (90% salary coverage)
We calculate accruals, track balances, and make sure every leave is documented and paid correctly.
5. Onboarding, offboarding, and lifecycle admin
You choose the hire. We take care of the paperwork.
New hire documentation, local authority registration
Contract amendments for raises or title changes
Resignation/termination processing (notice, severance, final pay)
Employee records are maintained in line with labor laws
Even a resignation in Baku or a promotion in Yerevan comes with admin you don’t want to mess up. We’ve got it covered.
6. Optional perks that improve retention
You can go beyond the basics. Through TeamUp’s EOR platform, you can offer:
Private health insurance (especially popular in Armenia, Azerbaijan, and Romania)
Coworking access in Tbilisi, Sofia, or Yerevan
Home office stipends and tech equipment (delivered locally)
Learning budgets and wellness allowances
We structure everything legally through payroll. You stand out from the crowd. Your team feels supported.
Hiring costs in the Caucasus vs Eastern Europe (2025)
If you're comparing costs between Eastern Europe and the Caucasus, here’s what most companies miss: setup in the EU isn’t only expensive, it’s slow, bureaucratic, and often not worth it unless you’re hiring at scale.
You want to hire one developer in Budapest and one in Bucharest? You’ll need two separate legal entities, two sets of filings, and local payroll operations in both countries.
That’s months of paperwork and thousands in upfront legal fees just to send a contract.
Now compare that to the Caucasus, where we already do it for you.
Sample monthly cost breakdown via Team Up
Hiring a Developer in Tbilisi
Gross salary: €2,000
Employer contributions (2%): €40
TeamUp flat EOR fee: €199
Total: €2,239/month
Hiring a Developer in Yerevan
Gross salary: €2,000
Employer taxes (~7.5%): €150
TeamUp flat EOR fee: €199
Total: €2,349/month
Hiring a Developer in Baku
Gross salary: €2,000
Employer taxes (~25%): €500
TeamUp flat EOR fee: €199
Total: €2,699/month
Salary breakdown by role in 2025
Role | Georgia | Armenia | Azerbaijan | Poland | Romania | Hungary |
Software Developer | $24,000 | $22,000 | $23,000 | $45,000 | $40,000 | $42,000 |
QA Engineer | $20,000 | $18,000 | $19,000 | $38,000 | $35,000 | $36,000 |
Data Scientist | $22,000 | $20,000 | $21,000 | $50,000 | $45,000 | $47,000 |
Graphic Designer | $15,000 | $14,000 | $14,500 | $30,000 | $28,000 | $29,000 |
Digital Marketer | $18,000 | $17,000 | $17,500 | $35,000 | $32,000 | $33,000 |
Content Writer | $12,000 | $11,000 | $11,500 | $25,000 | $23,000 | $24,000 |
Social Media Manager | $16,000 | $15,000 | $15,500 | $28,000 | $26,000 | $27,000 |
Project Manager | $25,000 | $23,000 | $24,000 | $55,000 | $50,000 | $52,000 |
HR Specialist | $18,000 | $17,000 | $17,500 | $40,000 | $38,000 | $39,000 |
Customer Support Rep | $10,000 | $9,000 | $9,500 | $22,000 | $20,000 | $21,000 |
Note: These figures are approximate and based on available data as of 2025. Actual salaries can vary based on factors such as experience, education, company size, and specific job responsibilities. Additionally, exchange rates and economic conditions can influence these numbers.
What you can offer talent through an EOR
Hiring in the Caucasus or Eastern Europe isn’t just about payroll. It’s about building trust, credibility, and a real employee experience, from Day One.
Through an Employer of Record (EOR), you can provide the kind of benefits, support, and structure that top-tier talent expects. No shortcuts. No weird workarounds. Just a fully legal, fully local employment experience that makes your hires feel like part of something real.
Here’s what you can actually offer through TeamUp’s EOR services:
1. Fully compliant statutory benefits
We cover the legal must-haves, tracked, managed, and applied through our local systems:
In Georgia:
24 paid vacation days
15 days of paid sick leave
183 days of maternity leave (paid through the social fund)
Public holidays (17 per year)
Pension contributions: 2% employer + 2% employee
In Armenia:
20 paid working days of annual leave
126 calendar days of paid maternity leave
Paid sick leave based on tenure and social contributions
Military duty tax (mandatory)
Pension: 5–10% employee contribution based on income
In Azerbaijan:
21 days of paid vacation
19 public holidays
Maternity leave (126 days paid), paternity (14 days unpaid)
Sick leave with a medical certificate
Social fund contributions: ~25% of gross salary
We don’t just tick boxes, we make sure every benefit is applied correctly, tracked properly, and communicated clearly.
2. Local perks that make you stand out
Want to attract talent in a crowded market? Perks matter. We help you offer benefits that actually land with candidates.
Private Health Insurance Especially valuable in Armenia and Azerbaijan, where public systems are limited.
Coworking Memberships Access to spaces in Tbilisi, Yerevan, and Baku whether monthly or flexible.
Home Office & Internet Stipends Pay for Wi-Fi, desks, phones, or setup support - all built into payroll legally.
Hardware Delivery Laptops and accessories are delivered locally. No customs, no shipping delays.
13th-Month Salary or Performance Bonuses Structured, taxed, and handled without surprises.
Wellness or Learning Perks Gym passes, online courses, Udemy subscriptions, we integrate them legally into compensation.
3. HR support that feels local
It’s not enough to offer the right benefits, you need the right support too.
Through TeamUp, your hires get:
A real HR contact (not just a chatbot)
Support in local language + English
Help with contracts, leave, and payroll questions
Fast answers to time-sensitive issues
You get a dedicated partner. Your team gets a stable employer. And no one’s left guessing how to request a day off.
EOR vs payroll outsourcing in Eastern Europe
Payroll outsourcing might sound like the cheaper, simpler option. But if you’re hiring in Eastern Europe without a legal entity in places like Hungary, Romania, or the Czech Republic, it won’t get you across the line.
Here’s what companies usually get wrong:
They assume outsourcing payroll means they can start hiring. It doesn’t.
In Eastern Europe, payroll providers only serve businesses that are already registered locally.
No entity, no game. So before you send an offer to that brilliant backend developer in Bucharest, here’s what you need to know.
What payroll outsourcing does (and doesn’t) cover
Let’s say you already have a kft in Hungary or an s.r.o. in Slovakia. You’re registered with the tax office, the social security fund, and have a local accountant.
In that case, payroll outsourcing can be useful. It helps you:
Calculate gross-to-net
Submit tax reports
Pay mandatory contributions
Generate local payslips
But you’re still responsible for:
Drafting and issuing compliant employment contracts in local language
Managing time off, sick leave, and maternity/paternity tracking
Handling terminations under strict labor codes
Staying ahead of changing local employment laws
In other words, payroll outsourcing takes care of the math, not the legal risk.
What an Employer of Record (EOR) delivers
If you don’t have a local entity in Romania, Poland, or Bulgaria, but you still want to hire there, an EOR is your way in.
TeamUp acts as the legal employer on paper, while you stay in charge of day-to-day work and team performance.
Here’s what we handle in Eastern Europe:
Legally compliant contracts in the local language (aligned with labor codes)
Full employee registration with tax and social authorities
Monthly payroll in local currency, gross-to-net, done and filed
Statutory benefits like leave entitlements, sick days, and bonuses
Terminations, severance, and final pay are handled correctly
Local HR support for your employee in Polish, Romanian, Czech, or Hungarian
This means no setup time. No registration fees. No lawyer bills. Just legal hires without borders, from Day One.
Why this matters in Eastern Europe
Eastern European countries are not uniform. They share a region, but each has its own laws, tax rates, and compliance rules.
In Hungary, employment contracts must specify probation, hours, and termination terms under the Labor Code in Hungarian.
In Romania, failure to register an employee correctly can result in fines of over €10,000.
In Bulgaria, social security contributions vary monthly based on income brackets.
In Poland, contracts like umowa o pracę have strict notice and benefit structures, and misclassification is monitored closely.
If you don’t have local legal muscle to back your hire, payroll outsourcing just isn’t enough.
EOR vs payroll outsourcing: side-by-side
Feature | Employer of Record (EOR) | Payroll Outsourcing |
Local entity required | No | Yes |
Legal employer | Yes (TeamUp) | No (You are) |
Contracts drafted & signed | Yes | No |
Onboarding & offboarding | Yes | No |
Tax and social filing | Yes | Yes |
Handles compliance | Yes | No |
Employee benefits managed | Yes | No |
HR support for your team | Yes | No |
Risk liability | TeamUp | You |
Best for | Entity-free hiring | Local entity payroll |
Eastern Europe vs the Caucasus: What smart teams are doing in 2025
If you’re comparing hiring in Eastern Europe vs the Caucasus in 2025, you're not alone.
Tech startups, scaleups, and remote-first companies are all looking for the same thing: skilled talent, compliant hiring, and cost control.
So where’s the smart money going?
The short answer: both.
The smarter answer: more are shifting East of Eastern Europe toward the Caucasus, and here’s why.
Eastern Europe: Great talent, rising costs
Poland, Romania, Hungary, and the Baltic have long been popular for remote teams, and for good reason.
Mature IT and BPO sectors
Solid infrastructure
Large, experienced talent pools
But the secret’s out. Global competition has pushed salaries higher year after year.
A mid-level developer in Warsaw? Often €45–55 K.
In Budapest or Bucharest? Not far behind.
Plus, local compliance is strict. In most cases, you still need a legal entity to hire full-time employees.
That’s where teams start looking at alternatives.
The Caucasus: Under the radar but not for long
Georgia, Armenia, and Azerbaijan have emerged as go-to markets for companies hiring globally without opening an office.
You’re getting:
High English proficiency, especially in Georgia and Armenia
EU time zone overlap
Developers at around €2,000 to €2,800 per month
Full legal employment via EOR with no entity required
Less red tape and faster onboarding
The total cost of hiring is often 30 to 50 percent lower than in Eastern Europe. And with TeamUp’s EOR coverage across the region, there’s zero legal lift on your end.
You approve the candidate. We handle the country.
So, which region should you hire from?
If you're building a long-term presence in Romania or Hungary and already have a legal entity, Eastern Europe makes sense.
But if you’re scaling lean, testing new markets, or hiring remote-first across product, support, or tech, the Caucasus is hard to beat.
Here’s how the comparison stacks up:
Category | Eastern Europe | Caucasus Region |
Average dev salary | €45–55K/year | €24–32K/year |
Legal entity required | Yes | No |
Talent availability | High | Growing fast |
Time zone alignment | EU hours | EU and MENA overlap |
EOR-friendly? | Limited | Yes (TeamUp) |
Hiring speed | 3 to 6 weeks | 5 to 10 days |
Smart teams don’t choose one region forever.
They optimize for the role, the budget, and the legal simplicity.
In 2025, the smartest companies are starting in the Caucasus and layering in Eastern Europe when they scale.
Bottom line
Hiring in Eastern Europe in 2025 still works.
But it’s not as fast, flexible, or affordable as it once was.
Salaries are up.
Entities are still required.
And talent that used to be “cheap” is now priced like London-lite.
That’s why more teams are zooming out and asking: What’s the smarter long-term play?
The Caucasus isn’t a fallback.
It’s where remote hiring is moving, especially for startups and lean teams who need speed without cutting corners.
With Team Up, you don’t have to choose between affordability and compliance.
We help you hire legally in Georgia, Armenia, and Azerbaijan in 7–10 days.
Real contracts. Full benefits. One monthly invoice.
No entity. No delays. No legal risk.
Your team gets what they need. You get to focus on building.
Frequently asked questions (FAQs)
What is an Employer of Record (EOR) in Eastern Europe?
An Employer of Record (EOR) is a third-party provider that legally employs workers on your behalf in countries like Poland, Romania, Hungary, or the Czech Republic. You manage the day-to-day work, while the EOR handles employment contracts, payroll, tax filings, and compliance with national labor laws.