Why current contractor arrangements are costing you money and creating risk
If your contractors invoice you personally or work through an EOR, you are carrying costs and risks that most finance and procurement teams have not yet quantified. This document shows you what they are — and how a single structural change eliminates them, at no cost to you.
The EOR cost you budget but your contractor never sees
When a contractor works through an Employer of Record, your organisation pays a management fee of €400 — €650 per month, plus onboarding, offboarding, and annual fees. The contractor receives a salary. They never see the management fee.
| EOR Cost Item | Typical Amount | Paid By |
|---|---|---|
| Monthly management fee | €400 — €650/month | You |
| Onboarding fee | €250 — €500 one-time | You |
| Offboarding fee | €250 — €500 one-time | You |
| Annual other fees | €150 — €300/year | You |
| Total annual spend per EOR contractor | €6,500 — €10,000+ | You |
The VAT cash flow problem nobody talks about
When a Dutch contractor invoices you personally, they charge 21% Dutch VAT. On a €10,000 invoice that is €2,100 that leaves your account immediately. Across a contractor pool this is a meaningful working capital drag — and it is completely avoidable.
The compliance and legal risk you may be carrying
Personal contractor invoicing is increasingly scrutinised by tax authorities across the EU. If a tax authority determines that your contractor relationship constitutes employment, the consequences include back-taxes, employer contributions, penalties, and in some jurisdictions joint liability.