US incorporation · English
How to hire your first US employee as a foreign company
By Greatweek · Published
To hire your first US employee as a foreign company, you either employ them through your own US entity and a payroll provider, or use an employer of record that employs them on your behalf. The first route needs a US company, US bank account and state tax registrations. The second lets you hire before any of that exists, at a higher monthly cost per person. This guide explains both, with published prices as of October 2026, and the commercial questions to settle before you sign an offer letter.
Start with the role, not the structure
The legal route matters less than the hire itself. A first US hire is usually a seller or commercial lead, and the wrong profile is expensive whatever payroll setup you choose. Our article on hiring the first salesperson in the US covers what to look for. If you are not ready for a full-time hire, fractional US commercial leadership can test the market first.
That is the gap Greatweek's Fractional CCO service is built for: senior commercial ownership alongside the CEO on an agreed weekly commitment, covering enterprise pipeline, forecasting and what roles to hire, in what order. It fits when a new market needs commercial ownership before a full-time executive makes sense.
Decide too whether a full-time employee is the right step yet. Our guide to the benefits of incorporating in the US explains when a US entity earns its keep and when it is better to wait for more market evidence.
Option one: an employer of record before you have an entity
An employer of record, or EOR, becomes the legal employer of your US hire. It runs payroll, withholds taxes and provides benefits, while you direct the person's day-to-day work. Deel describes its US EOR as letting you hire US talent without setting up a local entity, and its pricing page lists EOR from $599 per employee per month (as of October 2026). Rippling states that its US EOR is ideal for foreign companies hiring US employees without a US entity. Rippling does not publish a US EOR price.
One detail to check: read the product page closely before you request a quote.
Not every EOR product is built for US hiring. Justworks lists an EOR at $599 per employee per month, but it is designed for hiring international employees, not for hiring in the US without a US entity.
An EOR suits a first hire while you are still proving demand. It keeps fixed setup costs low and lets you exit more cleanly if the US test does not work. The trade-off is a higher per-person cost and less control over benefits and employment terms. Have a US employment lawyer review the EOR agreement, especially termination terms and who owns work product.
Option two: your own US entity and payroll
Once you have a US company, you can run payroll yourself through a provider. This is usually cheaper per employee and gives you direct control. It also means you are the employer, with all that implies. The usual order, drawn from the requirements below:
- Form the US company.
- Open a US bank account.
- Register for state payroll tax accounts where your employee lives, and register to do business there if needed.
- Sign up with a payroll provider using those tax agency account IDs.
Gusto's payroll terms require a business registered in the United States, a US bank account and tax agency account IDs. As of October 2026, Gusto lists Simple at $49 per month plus $6 per person for single-state payroll, Plus at $80 per month plus $12 per person for multi-state payroll, and Premium at $180 per month plus $22 per person. Gusto does not support employees living outside the US. Whether it accepts a US entity owned from abroad is not stated on the pages we reviewed, so ask before you sign up.
Justworks lists payroll at $8 per employee per month plus a $50 monthly base fee, and PEO plans at $79 or $124 per employee per month with no base fee. Rippling says its plans start at $8 per employee per month plus a base fee it does not state, with custom quotes. All figures are as of October 2026 and may change, so check Gusto, Justworks and Rippling directly.
What a PEO adds
A professional employer organization, or PEO, sits between the two. It co-employs your staff and handles benefits and HR administration, but it assumes you already have your own US entity. That is the distinction Deel draws: a PEO is co-employment, an EOR is the legal employer. Deel lists its US PEO from $125 per employee per month (as of October 2026). A PEO can make sense once you have an entity but want larger-employer benefits for a small team.
The three routes compared, using published prices as of October 2026:
EOR
- Needs a US entity
- No
- Example published price
- Deel from $599 per employee per month
PEO
- Needs a US entity
- Yes
- Example published price
- Deel US PEO from $125 per employee per month
Own payroll
- Needs a US entity
- Yes
- Example published price
- Gusto Simple $49 per month plus $6 per person
| Route | Needs a US entity | Example published price |
|---|---|---|
| EOR | No | Deel from $599 per employee per month |
| PEO | Yes | Deel US PEO from $125 per employee per month |
| Own payroll | Yes | Gusto Simple $49 per month plus $6 per person |
State registration and where your employee lives
US employment is regulated state by state. Where your employee lives and works decides which state payroll tax accounts you need, which is why Gusto asks for tax agency account IDs. If your company is incorporated in Delaware but your hire works in another state, your company will usually need to register to do business there as well, a step called foreign qualification. Formation services charge separately for this. Clerky lists foreign qualification at $125 plus third-party fees, and Firstbase includes foreign qualification in its registered agent service at $299 per year per state (both as of October 2026). An EOR handles the registrations on its side, which is part of what you pay for.
Benefits and offer expectations
US candidates often weigh health insurance, retirement plans and paid time off alongside salary, and the norms differ from those in most European countries. Ask candidates early what they expect, and make sure your EOR, PEO or payroll setup can actually provide it. A strong offer that your structure cannot deliver costs more than a slower hire.
Frequently asked questions
Can a foreign company hire a US employee without a US entity?
Yes, through an employer of record. Deel and Rippling both market US EOR services for companies without a US entity, with Deel's listed from $599 per employee per month (as of October 2026).
What is the difference between an EOR and a PEO?
An EOR is the legal employer. A PEO co-employs your staff and assumes you have your own US entity.
Can I use Gusto without a US company?
Gusto's payroll terms require a business registered in the United States with a US bank account, so you need a US entity first.
Do I need to register in the state where my employee lives?
Usually, yes, for payroll taxes and often to do business there. Confirm the requirements for that state with your advisor or provider.
Your first US hire is a commercial bet as much as an administrative one. If you want to test whether the role, the market and the timing line up, book a 20-minute US Entry Review. Confirm employment, payroll tax and state registration questions with a qualified US employment lawyer and tax advisor before making an offer.