> For the complete documentation index, see [llms.txt](https://help.marcopayroll.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://help.marcopayroll.com/marco-user-guide-x4/test-scenario/work-visa-employment-models.md). # Work Visa Employment Models ### **Test Objective** To compare the contract and salary configurations for **EOR (Employer of Record) Model** vs. **Internal (Client Business Entity) Model**, highlighting differences in payroll structure, payment types, and employer responsibilities. ### **Test Setup** **Platform:** Test Platform (test.marcopayroll.com)\ **Customer:** TEST **User Accounts & Roles:** * **Vendor Admin Account:** (T1) – Manages platform configurations and oversees payroll processing. * Besides the vendor, a reporting manager or data manager with Payroll or Admin access can also perform this demo. * **Internal Account:** (T3) – Represents a client company using the **Internal Model** (direct employment). * **EOR Account:** (T4) – Represents an Employer of Record handling employment and payroll in the **EOR Model**. ### **Test Data** * **T4 Account (EOR Model)** * Employment Type: EOR * Contract Type: Local employment contract with EOR * Payroll Configuration: * Salary Type: **CTC (Cost to Company)** * Employer Contributions: Handled by EOR * Employee Deductions: Applied and deducted before net salary * Payment Currency: Local currency (per country regulations) * **T3 Account (Internal Model)** * Employment Type: Internal (Client Business Entity) * Contract Type: Direct employment contract with the client company * Payroll Configuration: * Salary Type: **Gross or Net** (depending on contract terms) * Employer Contributions: Not included, as the company does not operate locally * Employee Deductions: Employee responsible for own tax obligations * Payment Currency: Could be home or host country currency, depending on policy ### **Conducting the Test: Configure Contracts** 1. Refer to [Staff Onboarding](/marco-user-guide-x4/2025/marco-platform-structure/customer-portal/manager-guide/people-management/employee-transition/staff-onboarding.md) guide for detailed instructions. 2. Set up an employment contract for **T4 (EOR)** with local employment conditions. * The same T4 from [Employer of Record (EOR) Hiring](/marco-user-guide-x4/test-scenario/employer-of-record-eor-hiring.md) is used

T4's EOR employment contract details

{% hint style="info" %} * **Local Employment Contract:** The employee enters into a contract with a local entity, the EOR, which becomes the legal employer in the host country. * **Compliance and Payroll:** The EOR manages payroll, withholds taxes, and ensures compliance with local labor laws, including social security contributions. * **Client Relationship:** While the EOR is the legal employer, the employee performs work for the client company, which directs their day-to-day activities. * This model is beneficial for companies seeking to expand internationally without establishing a legal entity in the host country. The EOR handles administrative and legal responsibilities, allowing the client company to focus on operational aspects. {% endhint %} 3. Set up an employment contract for **T3 (Internal)** with direct employment terms. * The same T3 from [Employer of Record (EOR) Hiring](/marco-user-guide-x4/test-scenario/employer-of-record-eor-hiring.md) is used

T3's internal employment contract details

{% hint style="info" %} * **Direct Employment Contract:** The employee maintains an employment contract directly with the client company, without a local employment contract in the host country. * **Visa Assistance:** The client company assists the employee in obtaining the necessary work visa but does not establish a local legal entity or enter into a local employment contract. Refer to [Visa Applications](/marco-user-guide-x4/2025/marco-platform-structure/customer-portal/manager-guide/mobility/visa-applications.md) for details. * **Compliance Considerations:** The client company must navigate the host country's immigration and labor laws to ensure the employee's legal right to work, which can be complex without local representation. * This model is often used for short-term assignments or when the client company prefers to maintain a direct employment relationship. However, it requires careful attention to legal and tax implications in both the home and host countries. {% endhint %} ### **Conducting the Test: Set Up Payroll & Salary Structures** 1. Refer to [Managing Pay Items](/marco-user-guide-x4/2025/marco-platform-structure/customer-portal/manager-guide/payroll/managing-pay-items.md) guide for detailed instructions. 2. Assign **CTC salary** for T4 (EOR).

T4's pay item details

{% hint style="info" %} * **CTC (Cost to Company):** The EOR handles payroll, including employer contributions, taxes, and benefits, so they typically work with **CTC** to reflect the total cost to the client company. * **Gross Salary:** The employee’s stated salary may be **gross**, including their taxes and contributions, but before deductions. * **Net Salary:** The employee receives their **net salary** after the EOR deducts taxes and contributions. {% endhint %} 3. Assign **Gross or Net salary** for T3 (Internal).

T3's pay item details

{% hint style="info" %} * **Gross Salary:** The client company offers a **gross salary** to the employee, but since there's no local employer, deductions and contributions are often handled separately. * **Net Salary:** The employee receives a **net salary**, assuming the employee handles their own tax compliance. * **CTC (Less Common):** If the client provides benefits or allowances beyond salary, **CTC** might be used, but this is less common in this model. {% endhint %} *** ### **Key Difference** * In the **EOR model**, the EOR acts as the employer and handles all payroll deductions, so **CTC is often used to reflect full costs**. * In the **Internal model**, the employee remains directly employed by the client company, meaning **gross or net salary is more relevant**, as the company is not paying employer-side taxes in the host country. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://help.marcopayroll.com/marco-user-guide-x4/test-scenario/work-visa-employment-models.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.