EOR vs PEO vs Global Payroll vs COR: Which Hiring Model Fits Your Stage?

The four models differ on one question first: who is the legal employer? An employer of record (EOR) employs the worker locally on your behalf. A PEO shares employer duties with a company that already employs people. Global payroll processes pay for employees of your own local entity. A contractor of record (COR) manages a contractor relationship and employs no one. So start with two facts: do you have a local entity, and does the work look like employment? Team size and stage then narrow the choice. Worker status tests are set by each country, not by your contract label, so confirm the classification before you pick a model.

Table of Contents

1. The short answer: one question separates the four models
2. What each model is, in plain terms
3. Side-by-side comparison
4. The decision tree: five questions in order
5. Which model fits which stage
6. Conversion paths: how companies move between models
7. Why worker status decides more than the model name
8. Country example: United States
9. Country example: United Kingdom
10. Country example: Australia
11. Country example: China
12. How Knit's EOR service handles this
13. Illustrative scenario (hypothetical, not a real client)
14. A pre-decision checklist
15. Frequently Asked Questions
16. Glossary of Key Terms
17. About Knit
18. Related Reading

1. The short answer: one question separates the four models

Most buying guides start with price. That is the wrong first move, because the four models are not four price points for the same service. They are four different legal structures.

Ask who signs the employment contract with the worker.

• With an EOR, the EOR signs. The worker is its employee in the worker's country, and your team directs the daily work.
• With a PEO, your own entity signs, and the PEO shares certain employer responsibilities with you.
• With global payroll, your own entity signs, and the provider runs the pay cycle.
• With a COR, nobody signs an employment contract. The worker is an independent contractor, and the COR manages the contracting and payment side.

Everything else follows from that answer: who carries compliance liability, how fast you can start, what the arrangement cannot do for you, and which mistakes cost the most.

Two questions then decide most cases. Do you have a local entity in the country? Does the work, assessed on its facts, look like employment or like a contract for a defined result? The sections below turn those questions into a decision tree, then test the framework against four jurisdictions: the United States, the United Kingdom, Australia and China.

If you only need a head-to-head on two models, Knit has covered those separately, including PEO vs EOR, global payroll vs EOR, COR vs PEO and EOR vs COR. This article is the hub that sits above those pairs.

2. What each model is, in plain terms

Each definition below answers the same four questions: who is the legal employer, who carries compliance liability, who runs payroll, and who handles benefits.

Employer of record (EOR)

• Legal employer: The EOR, in the country where the worker lives and works. Your company does not employ the person in that country.
• Compliance liability: The EOR carries the employer obligations it contracts to perform, such as the local employment contract, payroll tax filings and statutory benefits. You still control the work, so you remain responsible for how you direct, assess and treat the person, and for giving accurate information.
• Payroll: The EOR runs it and files the employer-side taxes.
• Benefits: The EOR administers statutory benefits and, depending on the agreement, any supplemental benefits you add.

For a longer explanation, see Knit's guide on what an employer of record is.

Professional employer organization (PEO)

• Legal employer: Shared. In the classic US structure, the PEO and your company act as co-employers, and your company remains the employer in most day-to-day respects. You need to be able to employ people in the first place, which usually means a local entity.
• Compliance liability: Split by contract and by law. The allocation differs by jurisdiction and by the type of obligation, so read the service agreement closely.
• Payroll: The PEO typically runs it, often under its own tax registrations.
• Benefits: The PEO typically offers pooled benefit plans and administers them.

Providers use the term "global PEO" for a range of structures, and not all of them are co-employment in the US sense. Knit's explainer on global PEO covers this. When you evaluate any offer labelled PEO, ask which entity is named as the employer on the worker's contract.

Global payroll

• Legal employer: Your own legal entity in that country.
• Compliance liability: Stays with your entity. The payroll provider calculates and files, but you remain the employer of record in the legal sense and answer for decisions, contracts and accuracy of inputs.
• Payroll: The provider processes pay, deductions and filings, often by coordinating in-country partners.
• Benefits: You design and contract for them. The provider usually calculates contributions and deductions.

Knit's overview of international payroll management goes deeper on the payroll side.

Contractor of record (COR)

• Legal employer: Nobody. The relationship is a commercial contract between a business and an independent contractor, and the COR sits in the middle to contract, invoice and pay.
• Compliance liability: Classification risk stays with the hiring company in practice. A COR can assess the arrangement and structure the paperwork, but it cannot change the facts of how the person actually works.
• Payroll: There is no payroll. The contractor is paid against invoices and is responsible for their own taxes and, in many countries, their own social contributions.
• Benefits: None as an employee. The contractor arranges their own cover.

Knit's contractor of record guide and its article on hiring a foreign independent contractor explain the mechanics and the reporting risks.

3. Side-by-side comparison

The table below puts the six differences that matter most on one screen. "Speed to start" is described in relative terms only, because real timelines depend on the country, the provider and how fast documents come back.

A note on reading the table: "typical stage" describes where each model most often fits, not a rule. Plenty of companies run two models at once, for example an EOR in one country and payroll for an entity in another.

4. The decision tree: five questions in order

Work through these in order and stop at the first question that gives you a clear answer. Where the answer is "it depends," treat that as a flag to ask local counsel.

Question 1. Does the work need an employee relationship?

‍Look at the facts, not the label you would like to use. Does the person work set hours, follow your processes, use your tools, work only for you and fill a permanent role? Then treat it as employment. If the person delivers a defined result, sets their own methods, serves other clients and can send a substitute, a contractor arrangement may be defensible. Go to Question 2 either way, but note your answer.

Question 2. Is the work project-based with a defined end?

‍If yes, and Question 1 pointed toward a contractor, a COR or a direct contractor agreement is a candidate. If the work is ongoing, open-ended or looks like a regular role, move toward an employment model (Questions 3 to 5). If the facts are mixed, assume employment until local counsel says otherwise.

Question 3. Do you have a legal entity in the country?

‍If yes, your options are global payroll (you stay the employer and outsource processing) or a PEO where that model is recognized locally. If no, you need either an EOR (to employ without an entity) or an entity set up first. Knit's article on EOR vs entity setup and the real cost math frames that trade-off.

Question 4. How many people, and how certain is the headcount?

‍For one to a few people in a market you are still testing, the fixed work of an entity is hard to justify, so an EOR is the usual fit. As headcount becomes larger and more certain, owning the employer relationship becomes more attractive. There is no single universal break-even number. It depends on provider pricing, the country's entity requirements and how sure you are of the plan.

Question 5. Do you need to own the employer relationship long term?

‍If you need local contracts in your own name, your own benefit plans, direct government registrations, or a permanent site, you are heading toward an entity plus global payroll. If you value speed and flexibility over ownership, an EOR can carry you for as long as the arrangement makes sense, and you can convert later.

Quick read of the outcomes

• Contractor-like work, project end date, specialist: COR (after a classification check).
• Employee-like work, no entity, small or uncertain team: EOR.
• Existing entity, steady headcount, you want to outsource processing only: global payroll.
• Existing entity in a country where a PEO is recognized, and you want shared HR and benefits administration: PEO.

5. Which model fits which stage

Stage matters because it changes the cost of being wrong. The guide below uses headcount ranges as rough anchors only. It does not use any price or timeline, since those vary by provider and country.

Testing a market with 1 to 3 people

You do not yet know whether the market will pay off. Spending months on entity registration, a local bank account and statutory filings before you have a first customer is a heavy bet.

• Most common fit: EOR for anyone who works like an employee. COR for a genuine specialist or a short project.
• What to watch: Do not put a full-time, long-term, directed worker on a contractor agreement just to move faster. That is the classic misclassification pattern.
• Exit thinking: Agree how you would end or transfer the arrangement before you start.

Growing to 10 to 30 people in a country

At this size, you manage a real team: managers, performance cycles, compensation reviews, local benefits expectations. The question changes from "can we employ here?" to "do we want to own this?"

• Most common fit: Still EOR for some companies, especially where entity setup is slow or costly. Others begin the entity project in parallel and keep the EOR as a bridge.
• What to watch: Cost is not just provider fees. Compare the full cost of an entity (registration, accountants, legal, directors, office or registered address, audits where required) against EOR service fees over a realistic horizon. Use the entity cost framework rather than a rule of thumb.
• Where PEO fits: If you already employ people through a US entity, a PEO may be relevant there, but it is a separate question from your international hires.

Building a site (an office, a plant, a regional hub)

If you are building a physical site, leasing premises, buying equipment or planning a team that will outgrow any intermediary, you are probably going to need an entity.

• Most common fit: Entity plus global payroll, often with an EOR used temporarily for the first hires while the entity registers.
• What to watch: Registration steps, bank account opening, tax registrations and licensing differ by country. Plan them as a project with owners, not as an afterthought.

Established entity

You already have a legal entity, a bank account and registrations. The EOR's main advantage (employing without an entity) no longer applies in that country.

• Most common fit: Global payroll to outsource calculation and filings. A PEO where the model exists and you want shared HR administration. COR for contractors.
• What to watch: Keep status decisions clean. An established entity can still misclassify workers, and your own entity carries the liability.

6. Conversion paths: how companies move between models

Models are not permanent. Most mature global teams have used several. The usual path runs left to right: contractor, then EOR, then entity with global payroll. The table lists the typical triggers and what to check at each step.

Two points deserve emphasis.

Moving a worker from contractor to employee is a legal event, not a relabel. Tax authorities and employment tribunals look at the real working relationship over time. If a contractor was effectively an employee, the earlier period may carry exposure. Ask local counsel how to handle the transition.

Moving from an EOR to your own entity needs planning for continuity. Many countries have rules about how service history, notice periods and accrued entitlements carry across when employment moves from one employer to another. These vary widely. Confirm the local position before you promise anything to the employee.

7. Why worker status decides more than the model name

Choosing a model does not decide whether a person is an employee. The facts of the working relationship, tested against each country's rules, do. That is why a COR cannot rescue a role that is truly employment, and why an EOR is the safer route for roles that clearly are.

The official sources cited below take different approaches, but they share a theme: no one fact is decisive, and the label in the contract does not settle the question. Rules change, and the rule in force on the day a dispute is assessed is the one that counts. Check each agency's current page before you decide.

8. Country example: United States

The US is the home of the PEO model, so it is a useful place to see how the four models differ.

Worker status for federal tax. The IRS page on independent contractor vs employee groups the evidence into three categories: behavioral control (does the company have the right to direct what the worker does and how), financial control (are the business aspects of the job controlled by the payer, such as pay method, expenses and tools), and the type of relationship (written contracts, benefits, expected continuation, and whether the work is a key aspect of the business). The IRS says no single factor is decisive. It also notes that if status is unclear, a business may consider submitting Form SS-8 for an official determination, and that the process may take at least six months. It describes the Voluntary Classification Settlement Program as an optional program that lets taxpayers reclassify workers as employees.

Federal wage and hour. The US Department of Labor's Wage and Hour Division FLSA page states that the department published a final rule on January 10, 2024 about who is an employee or independent contractor under the FLSA and rescinded the 2021 rule, and it says the guidance will be updated. Describe the position neutrally and check the current rule before you rely on it. State law may add its own tests.

What employers owe. The IRS employment taxes page lists the federal obligations that come with employing someone, including withholding and depositing income tax, and both the employer and employee shares of Social Security and Medicare taxes.

How a PEO fits. The IRS runs a certification program for professional employer organizations. Its page for CPEO customers says a certified PEO can take over some or all of the employer's federal employment tax responsibilities, that the CPEO is solely liable for paying the customer's employment taxes for work site employees, and that for non-worksite employees the CPEO and the customer may both be liable. It also notes that customers cannot view the CPEO's federal tax deposits in the IRS's EFTPS system. That is a good practical reminder: ask any PEO how you will verify that payments were made.

What this means for the choice. A US company with a US entity can use a PEO or domestic payroll. A US company hiring in another country is a different case, because a US PEO relationship does not by itself make someone an employee in a foreign jurisdiction.

9. Country example: United Kingdom

GOV.UK's employment status guidance sets out the categories: worker, employee, self-employed and contractor, director, and office holder. The page says employment status determines a person's rights and the employer's responsibilities, and that a person may have a different status in tax law. It also says courts and tribunals can make final decisions on employment status.

The detail sits on sub-pages.

• On the employee page, GOV.UK says all employees are workers, but employees have extra rights and responsibilities. It lists indicators of employee status, such as a requirement to do regular work, supervision of workload, no right to send a substitute, access to sick pay or a pension scheme, work at the business's premises and use of the business's tools. It tells employers they must work out each worker's status in both employment law and tax law, and warns that a wrong call can lead to unpaid tax and penalties.
• On the self-employed and contractor page, GOV.UK says a person is self-employed if they run their business for themselves and take responsibility for its success or failure. Indicators include bidding for work, working without direct supervision, invoicing for completed work and paying their own tax and National Insurance. The page also says contractors can fall into different categories and refers to the off-payroll working (IR35) rules.
• On the worker page, GOV.UK describes an in-between category with some rights, such as the National Minimum Wage and statutory paid holiday, but not others, such as protection against unfair dismissal.

Model implications. A UK hire who clearly meets the employee indicators needs an employer. Without a UK entity, that is typically an EOR. A UK contractor engaged through a COR must still pass the status tests. Because the UK has a middle "worker" category, the binary "employee or contractor" framing does not cover every case, so a third option exists that your contract has to account for. Confirm with a UK adviser.

10. Country example: Australia

The Fair Work Ombudsman's page on independent contractors says contractors provide services to another business but are not employed by it. They usually negotiate their own fees and arrangements, can work for more than one client, and are responsible for their own tax and generally their own superannuation. They are not entitled to employee entitlements such as annual leave, sick leave or minimum rates of pay.

The page does not use a single test. It lists indicators to weigh together, including control over how the work is done, financial risk, tools and equipment, the ability to delegate or subcontract, hours of work and the expectation of continuing work. In its words, there usually will not be one deciding indicator, and the outcome will come down to what was agreed at or before the start of the relationship. Having an Australian Business Number (ABN) or issuing invoices does not automatically make someone a contractor.

Sham contracting. The page explains that sham contracting occurs when a business represents to an employee that they are a contractor, and the business knew or should have known the truth. It is prohibited under the Fair Work Act 2009. The page also covers dismissing an employee to re-engage them as a contractor for the same or mostly the same work. It states maximum penalties of $18,780 per contravention for individuals and $93,900 per contravention for corporations as of the page we reviewed in October 2026. Penalty amounts are adjusted over time, so check the current figure.

Model implications. For Australia, the main risk of a COR-first approach is that a long-running, directed role gets labelled as a contractor arrangement. If the facts look like employment, the cleaner route is an employment model: an EOR if you have no Australian entity, or your own entity with global payroll if you do. Confirm with local counsel.

11. Country example: China

China is the clearest case where a model that works well in one country does not carry over.

What the law text says. The English translation of the Labor Contract Law published on the Supreme People's Court of China's site, Labor Contract Law of the People's Republic of China, states in Article 2 that the law applies where organizations such as enterprises, self-employed economic organizations and private non-enterprise units within the territory of China, referred to as "employing units," establish labor relationships with workers by concluding and performing labor contracts. A further page of the same text (Article 7 and Article 10) says a labor relationship is established as of the date the employing unit employs the worker, and that a written labor contract must be concluded, within one month of the employment start if it was not signed at the outset. Those points matter for any hiring model: the employer is an employing unit inside China, and the paperwork has deadlines.

Why EOR is the common route for foreign companies without an entity. The statute is framed around employing units established within China. A foreign company with no registered presence there generally cannot simply issue a local labor contract in its own name. The usual solutions are to register a local entity or to use a provider that already has one and acts as the employer. An EOR takes the second route. Knit's hiring in China guide covers the employment requirements, social insurance, payroll, visas and registration, and how an EOR lets a foreign company hire without its own entity. Confirm the exact structure for your case with Knit's local team or PRC counsel.

Why US-style PEO co-employment does not map directly. The US PEO model rests on a US framework in which the IRS certifies PEOs and allocates employment tax liability between the PEO and its customer, as described in Section 8. The Labor Contract Law text we reviewed describes a relationship between an employing unit and a worker. It does not describe a co-employment status in which a service provider and a customer share the employer role for the same worker. The same text does contain a separate section on labor dispatch, a different structure in which a dispatching unit is itself the employing unit and places the worker with a receiving unit. In the English translation we reviewed (Section 2, Labor Dispatch), Article 66 describes dispatch as applying to temporary, auxiliary or substitute jobs, and the dispatch articles include equal-pay and no-re-dispatch rules. Treat dispatch as its own regulated model, not as an equivalent of a PEO. The translation on that site may not reflect amendments, so verify the current Chinese text and any implementing rules with PRC counsel before choosing a structure.

Model implications for China.

• EOR: The common route when you have no entity and want to employ staff in China.
• Entity plus global payroll: The path when you want your own employing unit. Registration and ongoing compliance are significant projects.
• PEO: A US-style co-employment product is not a direct fit, so ask any provider exactly which entity is the employer on the contract.
• COR: Possible for genuine independent contractors, but the classification risk is real and should be reviewed locally.

Knit's executive guide to global EOR compares EOR, labor dispatch, subsidiary and contractor hiring across several countries, including China.

12. How Knit's EOR service handles this

Knit offers all four models discussed here: Employer of Record, PEO, Global Payroll and Contractor of Record. That matters for the decision framework because the recommendation should follow your facts, not a single product.

For the EOR service specifically, the structure works like this. Knit's EOR entity becomes the legal employer of the worker in the worker's country. Your team manages the work, goals and day-to-day direction. The EOR side handles the employment contract, payroll, employer-side tax filings and statutory benefits administration under the service agreement. Knit also lists related support: headhunting and recruitment, background checks, entity registration, global tax, insurance and work visa support, which can matter when an EOR hire later converts to an entity.

Some facts about the company, for context only: Knit was founded in Canada in 2015, has about 11 years of experience, serves more than 4,000 clients across 172 countries and regions, and processes over USD 600 million in annual payroll. It has 60+ owned entities and a China operations hub in Shenzhen. Whether Knit can support a specific country and role should be confirmed with the team directly through the Knit contact page. The Employer of Record services page describes the service in more detail, and the global hiring guides cover individual countries.

A good EOR conversation covers five points: the exact employing entity and its country, how contract terms and statutory benefits are set, what the EOR does and does not do, how the worker would be transferred to your entity later, and what happens to the employee on termination.

13. Illustrative scenario (hypothetical, not a real client)

Assumptions: A software company based in North America, "Company X," has no entity outside its home country. It wants to test a regional market. All names are anonymized, and nothing here is a real client or a real cost.

Year one. Company X needs a salesperson in the new country (Employee A) and a short-term localization specialist (Contractor B) for a three-month product-translation project.

• Employee A will work set hours, report to a manager, use company tools and work only for Company X in a continuing role. The decision tree gives a clear answer: employment, no entity, small team. Company X uses an EOR.
• Contractor B will deliver a defined translation set by a fixed date, use their own equipment, invoice per milestone and keep other clients. After a classification check, Company X uses a COR.

Year two. Company X hires two more people in the same country through the EOR. It now has three employees, plans to open a small office and wants local benefit plans in its own name.

Year three. Headcount becomes more certain. Company X decides to register a local entity, and it plans a transition: transfer Employee A and the others to the new entity, handle service-history and notice-period rules according to local law, and move payroll to global payroll under the new entity.

What went right. Company X did not need an entity on day one. It kept the contractor out of the employee pool because the facts supported it. It reviewed the model each time the facts changed.

What could have gone wrong. If Company X had put Employee A on a contractor agreement to start faster, it would have taken on misclassification risk in a country where tax authorities and tribunals look at the real relationship. If it had waited too long to plan the transition, the move to an entity would have had no agreed process.

This scenario is a teaching example. Real decisions depend on the country, the role and the provider's terms.

14. A pre-decision checklist

Use this checklist in a meeting with your finance, legal and people leads. If you cannot answer a row, that is where to start.

One caution about the last row: using an EOR does not automatically settle every tax question about your own company's presence in the country. That depends on what the person does and where the facts land, so it needs local tax advice.

Frequently Asked Questions

1. What is the main difference between an EOR and a PEO?

‍An EOR is the legal employer of the worker in the worker's country, so you do not need a local entity. A PEO shares certain employer duties with a company that already employs people, which usually means you need an entity. The practical test is simple: ask which entity is named as the employer on the worker's contract.

2. Is global payroll the same as an EOR?

‍No. With global payroll, your own local entity remains the employer and the provider processes pay and filings. With an EOR, the EOR is the employer. Global payroll does not remove the need for an entity, and it does not move employer liability away from you. It outsources the processing work, not the employer role.

3. When should I use a contractor of record instead of an EOR?

‍Use a COR when the person is a genuine independent contractor, for example a specialist on a defined project who controls their own methods and serves other clients. If the person works set hours, only for you and in a continuing role, treat them as an employee and use an employment model. Confirm local classification first.

4. Can a COR protect me from misclassification?

‍A COR can help structure the paperwork and review the arrangement, but it cannot change how the person actually works. Tax authorities and tribunals look at real facts. In Australia, for example, the Fair Work Ombudsman says an ABN or an invoice does not automatically make someone a contractor. Classification risk stays with you.

5. Do I need a local entity to hire with an EOR?

‍No, that is the main point of an EOR. The EOR employs the worker locally, and you direct the work. An entity becomes relevant later if you want your own contracts, plans or registrations, or if headcount grows enough to justify owning the employer role. Whether your hire creates a tax presence is a separate question for a licensed tax adviser.

6. Why is EOR common in China, and why doesn't a US-style PEO fit?

‍The Labor Contract Law is framed around "employing units" within China and a written labor contract with each worker. A foreign company with no entity there usually needs a local employer, which an EOR provides. The US PEO model relies on a US co-employment framework that the Chinese statute text we reviewed does not describe. Confirm with PRC counsel.

7. Can I move from an EOR to my own entity later?

‍Yes, and many companies do. Plan it early. Check how local law treats service history, notice periods and accrued entitlements when employment moves to a new employer, and agree transfer mechanics in the EOR agreement. Rules differ by country, so confirm the local position before you commit terms to the employee.

8. What is the difference between a PEO and a global PEO?

‍A US PEO usually means a co-employment arrangement under US rules. "Global PEO" is a label that providers apply to several structures, and some work much like an EOR. Do not rely on the label. Read the contract to see which entity employs the worker and how liability is split.

9. Which model is fastest to start?

‍Often a COR for genuine contractors, followed by an EOR for employees, because neither requires you to register an entity first. Global payroll and PEO generally require an entity to exist. Actual timing depends on the country, the documents and the provider, so ask for a written plan instead of relying on a general claim.

10. How many employees justify an entity instead of an EOR?

‍There is no single number. The break-even depends on provider pricing, the country's entity and compliance costs, and how certain your headcount is. Compare the full cost of an entity (registration, accounting, legal, premises where needed) with EOR fees over a realistic period. Knit's cost-math article shows how to frame that comparison.

Glossary of Key Terms

• Co-employment: A relationship in which two parties share certain employer responsibilities for the same worker. Common in the US PEO model, but not a universal concept.
• Contractor of record (COR): A provider that manages the contracting, invoicing and payment of independent contractors. It does not employ them.
• CPEO: A certified professional employer organization, a PEO certified under a US IRS program.
• Employer of record (EOR): A provider that acts as the legal employer of a worker in a country, while the client directs the work.
• Employing unit: The term used in the English translation of China's Labor Contract Law for organizations that establish labor relationships with workers.
• Global payroll: A service that processes pay, deductions and filings for employees of the client's own entities in multiple countries.
• Labor dispatch: A regulated Chinese structure in which a dispatching unit employs workers and places them with a receiving unit.
• Misclassification: Treating a worker as a contractor when the law would treat them as an employee.
• PEO: A professional employer organization, which shares employer responsibilities with a client that already employs people.
• Sham contracting: Under Australia's Fair Work Act 2009, representing an employee as an independent contractor in the circumstances the Fair Work Ombudsman describes.
• Worker (UK): A UK status between employee and self-employed, with some rights such as the National Minimum Wage and statutory paid holiday.

About Knit

Knit People (万领钧) is a global provider of Employer of Record, PEO, Global Payroll and Contractor of Record services. It was founded in Canada in 2015, has about 11 years of experience, serves 4,000+ clients across 172 countries and regions, processes over USD 600 million in annual payroll, operates 60+ owned entities and runs a China operations hub in Shenzhen (MSB license No. M23187879). It also provides headhunting and recruitment, background checks, entity registration, global tax, insurance and work visa support. To discuss which model fits your situation, contact Knit's team or read more on the Employer of Record services page.

Related Reading

• PEO vs EOR: A Step-by-Step Guide to Choosing
• Contractor of Record (COR) Services: A Complete Guide for Global Businesses in 2026
• EOR vs. Setting Up a Foreign Entity: The Cost Math
• Hiring in China: What to Know and Why Use an EOR
• Global Hiring Guides

This article is general educational information only and is not legal, tax or immigration advice. Worker status tests, tax rules, penalties and employment regulations in the United States, the United Kingdom, Australia, China and elsewhere change over time and vary by state, region and facts. Figures and agency positions cited here were reviewed in October 2026 and may have been updated since, including the US Department of Labor's independent contractor guidance. Before choosing a hiring model or classifying any worker, confirm the current rules with Knit's local team or with licensed local legal counsel and tax advisors.