EOR pricing in Africa often looks simple: “X% of payroll” or “$Y per employee per month.” The real cost can be 15–25% higher once you add FX, minimums, benefits, and offboarding. Here’s what to dig for before you sign.

FX and currency. You may pay the EOR in USD or EUR; they pay staff in ZAR, NGN, KES, or EGP. The spread between the rate you’re charged and the mid-market rate can be 2–5%. On a $3,000/month salary that’s $60–150/month per employee. Ask: “What rate do you use for converting our payment to local currency, and is there a markup?” Some providers use mid-market and charge a separate FX fee; others bake it into the rate. Get it in writing. In markets with restricted FX (e.g. Nigeria), also ask how they source local currency and whether that affects what the employee actually receives.

Minimum fees. A “6% of payroll” offer can come with a minimum of $400 or $500 per employee per month. For a $2,000/month hire, 6% is $120 — but you pay the minimum, so effective rate is 20–25%. That hurts most for junior or part-time roles. Ask for the minimum and model it against your salary band.

Setup and onboarding. One-time fees per employee or per country are common: $100–300 per person or $500–1,500 per country launch. They don’t repeat, but they inflate first-year cost. If you’re hiring 5 people in one country, that’s $500–1,500 in setup on top of monthly fees. Factor it into your budget.

Benefits and statutory. Employer statutory (pension, UIF, social insurance) is pass-through — you pay it, the EOR remits it. But some EORs add a margin on top (e.g. “admin” on benefits). And if you add private medical or extra pension, that’s often quoted separately. Ensure your “all-in” quote includes mandatory employer contributions and ask whether optional benefits are at cost or marked up.

Termination and handover. Ending an assignment can trigger a fee: $200–500 per person or a month’s EOR fee. If you later move people to your own entity, some providers charge a “migration” or “handover” fee. These aren’t always in the headline proposal. Ask: “What do we pay when we terminate an assignment or transfer to our entity?”

Invoicing and payment terms. Net-30 is standard; net-15 or prepay sometimes gets a small discount. Late payment can attract interest or suspension of service. No hidden cost if you pay on time, but know the terms. Also check if the EOR invoices in one currency or multiple; multi-currency invoicing can simplify or complicate your treasury.

How to protect yourself. (1) Request a total monthly cost per employee (EOR fee + salary + employer statutory + any mandatory benefits) for 2–3 sample roles and countries. (2) Ask explicitly about FX, minimums, setup, and termination. (3) Read the master service agreement for fee changes at renewal and change-of-control. (4) Compare two or three providers on the same assumptions. The cheapest headline rate can be the most expensive once the rest is in. Lock in clarity up front so there are no surprises.