Why the way most contractors work is costing them money

If you bill between EUR 3,000 and EUR 15,000 per month, your client has already budgeted a total cost that includes more than just your hourly rate. Management fees. Employer cost components. Onboarding charges. These are real amounts — already allocated, already spent. The question is where they go. In most contractor arrangements, they go to someone else.

Personal Invoicing

Invoicing clients directly as an individual feels straightforward — until it isn’t. European tax authorities are increasingly aggressive about reclassifying personal contractor relationships as employment. If that happens, the consequences fall on both you and your client.

Many EU companies are already refusing to engage contractors who invoice personally, precisely because of this risk. A single policy change or audit can cost you contracts you could otherwise keep for years.

Employer of Record (EOR)

An EOR makes you an employee — of them, not your client. Your client pays a management fee of EUR 400 to EUR 650 per month, plus onboarding, offboarding, and annual fees. You never see this money. You receive a salary. No financial flexibility, no reserves, no business expenses, no ownership of anything. If the EOR has financial difficulties, your contract can evaporate overnight.

Reinvoicing Intermediary

A reinvoicing arrangement means an intermediary invoices your client and pays you minus a fee — typically EUR 2.50 to EUR 3.50 per hour. At 160 hours per month, that is EUR 400 to EUR 560 per month leaving your pocket permanently. You get a cleaner invoicing arrangement. But you own nothing. If they close, change terms, or lose their own contracts, you have no fallback.