Should I accept a contractor role instead of an employee role?

Only if the money is adjusted for what you give up. A contractor and an employee doing identical work are not paid on the same basis. The employee gets employer-funded social contributions, paid leave, sick pay and a notice period. The contractor gets a rate and nothing else. Independent guidance puts the break-even gap at roughly 25 to 40 percent more per hour just to match an equivalent employee's total package, before any profit. So a contractor role is a good deal when the rate is meaningfully above the salary you would have been offered as an employee, and a bad deal when it is the same number with the benefits quietly removed. Ask which basis the figure was calculated on before you respond to anything else.

How much more should a contractor charge than an equivalent employee?

Start at 1.3x the equivalent gross salary and work up from there. The floor comes from what the employer stops paying: in Germany the employer's own social insurance share runs around 21 percent of gross wage, and closer to 24 percent once employer-only levies are added. Then add the paid time you no longer get. EU law guarantees employees at least four weeks of paid annual leave, and a contractor invoicing by the day earns nothing during those weeks, plus public holidays and sick days. Add self-employment tax, your own health cover, your own equipment and accounting, and unbilled gaps between contracts. Serious pricing guides warn against treating any single multiplier as a rule, so use 1.3x to 1.6x as a sanity check on a number you built from your own costs.

What is an Employer of Record?

An Employer of Record, or EOR, is a company that legally employs you in your own country on behalf of a business that has no legal entity there. You do the work for the client company, but your employment contract sits with the EOR. It runs payroll, withholds your tax, pays statutory social contributions and administers statutory benefits such as pension, healthcare and paid leave, and it observes local rules on notice periods and severance. The client still manages your day-to-day work. That makes an EOR fundamentally different from a contractor arrangement, where you are self-employed, handle your own tax and benefits, and receive no statutory paid leave or social contributions. If an offer says EOR, you are being offered employment. If it says contractor, you are not.

Is a Deel contractor agreement safe?

Platforms like Deel, Remote.com, Oyster and Velocity Global are established payment and compliance infrastructure, and getting paid through one is normal. The risk is not the platform, it is the classification. A contractor agreement describes someone who is genuinely independent: sets their own methods, carries business risk, serves more than one client. If you work fixed hours, report to a manager, sit in the company's tools and take direction on how the work is done, the label on the contract does not settle your status. Philippine labour law applies a four-fold test in which the power of control is the decisive element, and a contract calling you an independent contractor does not by itself defeat employee status. Read the agreement, check what it says about termination and notice, and take local professional advice on anything that affects your status.

What is the difference between a contractor and an employee on a remote job for a European company?

The difference is who carries the cost and the risk. As an employee, whether direct or through an Employer of Record, the company pays employer social contributions on top of your gross salary, funds your statutory paid leave, and has to give you notice before ending the relationship. German statutory notice starts at four weeks and lengthens with years of service. As a contractor, none of that exists. Your rate is the whole package, your holiday is unpaid, and the agreement usually ends on short notice. Companies often prefer contractor arrangements because they are faster to set up and cheaper to run. That is a reasonable business preference. It just means the number they offer you as a contractor has to be higher than the number they would have offered you as an employee, not the same.

← All posts Remote Work · Southeast Asia

They Offered You a Deel Contract. Here's What It Just Cost You.

Ben Becker · August 28, 2026 · 9 min read · Updated August 30, 2026

VP Marketing, remote from Southeast Asia. I hire remote — this is the view from the other side of the table.

Editorial illustration: two faceted paper documents standing side by side at the same height and width, the left a thick layered stack of many pages, the right a single thin sheet - the same number, with half the package removed.

The email arrives on a Tuesday. Subject line: “Offer — Senior [your title]”.

You scan for the number. It is bigger than what you earn now. Your chest does the thing.

Then, four paragraphs down, one sentence you barely register: “We’ll onboard you as a contractor through Deel, since we don’t have an entity in your country.”

You are already typing “Sounds good, where do I sign.”

Stop. That sentence just changed what the number means.

A contractor rate and a salary are not the same number

Here is the part nobody explains to you.

When a European company hires an employee, the salary is not what the employee costs. It is the visible part of a much larger number.

In Germany, the employer pays its own share of social insurance on top of your gross salary. The German government’s own investment agency puts that employer share at approximately 21 percent of the employee’s gross wage — pension, health, unemployment, nursing care and accident insurance. A 2026 breakdown from the employment law firm Osborne Clarke lands at roughly 23.8 percent once employer-only levies like the refund pools and insolvency contribution are added.

That is before a single day of paid leave.

EU law guarantees every employee at least four weeks of paid annual leave. Then public holidays. Then sick pay. Then a notice period — under German law, four weeks to the fifteenth or the end of a calendar month as the floor, stretching to seven months for long-serving staff.

Now count what a contractor gets from that list.

Nothing.

No employer contributions. No paid leave. No sick pay. No notice. The rate is the entire package. You take a week off, you invoice nothing. You get dengue, you invoice nothing. They end the contract with thirty days’ notice, you invoice nothing.

So when a company offers you “€4,000 a month as a contractor” and you compare it to a €4,000 employee salary, you are comparing two different products and calling them the same price.

So what is the multiplier?

I want to be honest with you here, because the internet is not.

There is no magic number. The pricing guides that actually do the maths warn against treating a multiplier as the formula — they call it a reasonableness check you apply after you cost out your own situation, because the ratio changes depending on whether you divide by 2,080 paid employee hours or the 1,440 hours you realistically bill.

But the floor is well documented. One breakdown of contractor economics puts it at 25 to 40 percent more per hour than an equivalent employee just to break even on total compensation — self-employment tax, self-funded health cover, no retirement match, three to four weeks of unpaid time off.

So: 1.3x is the floor. 1.4x to 1.6x is where a fair contractor rate actually sits once you add your own equipment, software, accountant, and the unbilled weeks between contracts.

Build it yourself. Take the employee salary you would have been offered. Add the employer contributions the company is no longer paying. Add the paid weeks you no longer get. Add your own costs. That is your number, and it has reasons attached, which is what makes it defensible.

The version that fits on one line

A €4,000 monthly employee salary is not a €4,000 monthly contractor rate. It is roughly €5,200 to €6,000 as a contractor rate for the same work.

If they offered you €4,000 as a contractor, they did not offer you €4,000. They offered you about €3,000 of employee-equivalent value and let you do the celebrating.

Script one: find out which number you are actually holding

Send this before you discuss anything else. It is not a negotiation. It is a clarifying question, and clarifying questions are free.

Thanks for this — genuinely excited about the role and the team.

One quick clarification before I come back with a full response. Was the figure calculated as an employee-equivalent salary, or as a contractor day/monthly rate? I ask because on a contractor basis I’d be carrying the social contributions, paid leave and equipment costs the company would normally cover, so the two numbers aren’t directly comparable.

Happy either way — I just want to make sure we’re comparing like for like.

That is it. No demand. No number from you yet.

Half the time the answer comes back: “Good question, that was based on our internal band for the role.” Which tells you they built it from an employee salary and forgot to gross it up. That is the opening.

This is the free sample. The full playbook — the benchmark data, the counter-offer sequence, and the exact emails that took my own remote pay past double — is inside the Remote Work Manifesto. Get the Manifesto →

EOR or contractor? They are not the same offer

Companies use two different structures and use the words loosely. Know which one you are being handed.

An Employer of Record legally employs you in your own country on behalf of the company. Deel’s own explanation is clear: the EOR acts as the legal employer, provides statutory benefits including pensions, healthcare and paid leave, runs payroll and tax withholding, and complies with notice periods and severance. The client company still manages your daily work.

An Agent of Record or Contractor of Record does something different. It facilitates a compliant engagement with you as an independent contractor. Same platform, different product. In Deel’s words, contractors handle their own benefits — no withholding, no statutory protections, no paid leave, no social contributions.

Same logo on the invoice. Completely different life.

So ask.

Before I respond on numbers — can you tell me which structure this is? An EOR employment contract, or a contractor agreement?

If it’s EOR, I’d like to know the annual leave entitlement, sick leave policy and notice period that apply.

If it’s a contractor agreement, I’ll assume leave is unpaid and notice is short, and I’ll factor that into the rate I come back with.

Notice what that last line does. It states your logic in advance, calmly, so the higher number you send later is not a surprise. You are not haggling. You are showing your work.

”That’s our standard rate for your region”

You will hear this. Prepare for it now so it does not land on you cold.

It is not a rule. It is a pricing decision, and pricing decisions move. I have written about the whole regional-rate story in we pay local rates, and about who you are actually competing against in the competition isn’t Berlin, it’s Kraków. Read both when you have twenty minutes.

Here is the reply.

Understood, and I’m not asking you to break your banding.

My point is narrower: the regional benchmark you’re using is for employment, and this is a contractor engagement. On a contractor basis I’m absorbing the social contributions, the paid leave and the equipment costs that sit on the employer’s side of an employment contract — in Germany that alone is over 20 percent of gross before leave is counted.

So I’m asking for the same benchmark, grossed up for the structure you’ve chosen. For this scope that puts me at [X]. Happy to walk through how I got there.

Calm. Specific. Zero grievance. You are correcting a category error, not accusing anyone of anything.

Your skills are not worth less because of where the wifi router sits. They are priced by geography and the price is stale. That is a different sentence from “pay me Western money” and it lands completely differently. More on that in negotiating a European salary from Southeast Asia.

The one thing you should know from the other side of the table

I sit on the hiring side at a European tech company.

Here is what actually happens: the gross-up conversation is one companies already expect. Recruiters hiring across borders have this exchange constantly, and the approved band usually has room above the opening number because opening at the top of a band is not how anyone opens. When a candidate replies with “is this employee-equivalent or contractor basis,” it does not read as difficult. It reads as someone who has done this before.

Asking is normal. Not asking is the thing that stands out.

What to give, what to hold

Give early: your availability, your timezone overlap, your notice period at your current job, your enthusiasm for the role. Give all of it, fast, warmly. These cost you nothing and they buy enormous goodwill.

Hold: your number, until you know the structure.

Do not answer “what are your salary expectations” before you know whether they are asking about a salary or a rate. Those are two different questions wearing the same suit. One line handles it:

“Happy to share a figure — is this an employment contract or a contractor engagement? My number differs depending on which.”

That is not evasion. It is precision, and precision reads as senior.

The classification question, briefly

One more thing to be aware of, and then I will stay in my lane.

A contractor label on a contract does not automatically make you a contractor. Philippine labour law uses a four-fold test — selection, wages, dismissal and control — and the control element is the decisive one; a contract calling you an independent contractor does not defeat employee status when the facts show otherwise. Germany has the mirror-image concept, Scheinselbständigkeit, where the pension authority assesses personal dependence and integration into the company’s structure, and the consequences land on the company in back contributions and penalties.

I am not a lawyer and this is not legal advice. What it is: a reason to read your agreement properly, especially the termination and notice clauses, and to pay a local accountant or employment lawyer for an hour of their time before you sign something that governs the next two years of your income.

An hour costs less than a month of being underpriced.

The move

Do not reply “sounds good.”

Reply with the clarifying question: employee-equivalent or contractor rate.

If it is contractor, build your number from the employee salary plus the employer contributions plus the unpaid leave plus your own costs. That lands between 1.3x and 1.6x. Send it with the reasoning attached.

If they say regional rate, agree with the benchmark and ask for it grossed up for the structure they chose.

Then go quiet and let them answer.

Ten years in Southeast Asia, three remote jobs, three promotions, and I have never once sat in the same office as my boss. Not one of those steps came from waiting to be offered the right number.

They came from asking one question before saying yes.

Sources cited in this post: Germany Trade & Invest on social insurance · Osborne Clarke, German social security contributions 2026 · EU-OSHA on Directive 2003/88/EC · Notice periods under sec. 622 BGB · Deel: AOR vs EOR · Contractor rate guide · Contractor vs employee cost breakdown · Philippine four-fold test · False self-employment in Germany

Frequently asked questions

Should I accept a contractor role instead of an employee role?: Only if the money is adjusted for what you give up. A contractor and an employee doing identical work are not paid on the same basis. The employee gets employer-funded social contributions, paid leave, sick pay and a notice period. The contractor gets a rate and nothing else. Independent guidance puts the break-even gap at roughly 25 to 40 percent more per hour just to match an equivalent employee's total package, before any profit. So a contractor role is a good deal when the rate is meaningfully above the salary you would have been offered as an employee, and a bad deal when it is the same number with the benefits quietly removed. Ask which basis the figure was calculated on before you respond to anything else.
How much more should a contractor charge than an equivalent employee?: Start at 1.3x the equivalent gross salary and work up from there. The floor comes from what the employer stops paying: in Germany the employer's own social insurance share runs around 21 percent of gross wage, and closer to 24 percent once employer-only levies are added. Then add the paid time you no longer get. EU law guarantees employees at least four weeks of paid annual leave, and a contractor invoicing by the day earns nothing during those weeks, plus public holidays and sick days. Add self-employment tax, your own health cover, your own equipment and accounting, and unbilled gaps between contracts. Serious pricing guides warn against treating any single multiplier as a rule, so use 1.3x to 1.6x as a sanity check on a number you built from your own costs.
What is an Employer of Record?: An Employer of Record, or EOR, is a company that legally employs you in your own country on behalf of a business that has no legal entity there. You do the work for the client company, but your employment contract sits with the EOR. It runs payroll, withholds your tax, pays statutory social contributions and administers statutory benefits such as pension, healthcare and paid leave, and it observes local rules on notice periods and severance. The client still manages your day-to-day work. That makes an EOR fundamentally different from a contractor arrangement, where you are self-employed, handle your own tax and benefits, and receive no statutory paid leave or social contributions. If an offer says EOR, you are being offered employment. If it says contractor, you are not.
Is a Deel contractor agreement safe?: Platforms like Deel, Remote.com, Oyster and Velocity Global are established payment and compliance infrastructure, and getting paid through one is normal. The risk is not the platform, it is the classification. A contractor agreement describes someone who is genuinely independent: sets their own methods, carries business risk, serves more than one client. If you work fixed hours, report to a manager, sit in the company's tools and take direction on how the work is done, the label on the contract does not settle your status. Philippine labour law applies a four-fold test in which the power of control is the decisive element, and a contract calling you an independent contractor does not by itself defeat employee status. Read the agreement, check what it says about termination and notice, and take local professional advice on anything that affects your status.
What is the difference between a contractor and an employee on a remote job for a European company?: The difference is who carries the cost and the risk. As an employee, whether direct or through an Employer of Record, the company pays employer social contributions on top of your gross salary, funds your statutory paid leave, and has to give you notice before ending the relationship. German statutory notice starts at four weeks and lengthens with years of service. As a contractor, none of that exists. Your rate is the whole package, your holiday is unpaid, and the agreement usually ends on short notice. Companies often prefer contractor arrangements because they are faster to set up and cheaper to run. That is a reasonable business preference. It just means the number they offer you as a contractor has to be higher than the number they would have offered you as an employee, not the same.

Your move

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— Ben