Contractor of Record

A global contractor is an independent professional engaged under a contractor agreement instead of a traditional employment agreement. Unlike a W-2 employee, they are often treated like form 1099-NEC or form 1099-MISC workers in the U.S. Hiring one involves defining the scope of work, payment terms, and intellectual property rights, while ensuring alignment with international labor laws. With Topsource, businesses can compliantly onboard contractors across 180+ countries, handling cross-border payments, currency exchange, and compliance risk management—reducing the risk of misclassification under local employment laws.

An employer of record (EOR) helps navigate complex international tax compliance and labor law requirements. Even though contractors aren’t classified as full-time employees, many jurisdictions impose tax compliance obligations, such as VAT (value added tax), TDS (tax deducted at source), or social security wages contributions. Using Topsource as your EOR means you can manage hybrid teams—contractors and employees—under one model, with compliant employment agreements, invoicing, and even contractor-to-employee transitions that preserve employee tenure, employee benefits, and employee retention strategies.

Yes. Topsource simplifies contractor management by centralizing invoicing, pay stub generation, and cross-border payments. Contractors can be paid in their local currency, with accurate currency exchange and adherence to cutoff date payroll cycles. We also ensure compliance with reporting obligations like form W-9, form W-4, and 1099 employee classifications in the U.S., As well as VAT (value added tax) or professional tax in other regions. This removes manual errors, ensures timely contractor payments, and reduces payroll audit risks.

Misclassification happens when a contractor is wrongly treated as a salaried employee under local employment laws. To protect against this, Topsource provides automated compliance management tools, legal assessments, and continuous compliance risk management. Each role is evaluated against labor law frameworks like working time directive in Europe or UAE labour law, ensuring correct classification. Where risks exist, we offer international PEO (professional employer organization) conversion pathways, moving contractors into EOR employment with preserved gratuity, employee benefits, and employee onboarding history.

Yes. Contractors can be seamlessly converted into EOR employment, allowing them to retain employee tenure, leave management history, and access to benefits like end of service gratuity, auto-enrolment pension scheme, or central provident fund (CPF) (depending on location). This transition supports employee retention, provides access to structured employee benefits, and ensures compliance with international labor laws. For businesses, it also strengthens long-term global workforce strategy by retaining top talent under secure contracts.