# Abillio vs Terminal: employer of record or contractor payments?

Terminal recruits remote engineers and can employ them for you as an employer of record. Abillio pays independent contractors. The real question behind this comparison is employee or contractor, so that is where we start.

**Quick answer:** if the person will work as a full-time employee, an employer of record like Terminal is the right structure. If they are a genuinely independent contractor, Abillio pays them compliantly for 4% of each paid invoice (3% above €50k a month), with no monthly per-person fee.

## Terminal vs Abillio at a glance

Terminal

Abillio

What it is

Engineer recruiting, with employer of record

Payment and compliance layer for independent contractors

Legal relationship

Terminal can employ the person for you

The person stays an independent contractor

Price

Flat fee per hire, plus a monthly fee for employer of record (amounts not published)

3% to 5% depending on volume, custom pricing available

Best for

Full-time engineers abroad

Independent contractors

Prices as of November 2026, from each company’s own pricing page (checked 12 November 2026).

## What Terminal does

Terminal recruits software engineers in Canada, Latin America (Chile, Colombia, Costa Rica and Mexico) and Europe (Poland, Spain, Romania and Hungary). Its FAQ describes three ways to work: Hire Direct, a flat fee per hire; Hire + Employ, a flat fee per hire plus a monthly recurring fee while Terminal is the employer of record; and contract work priced on each contractor’s rate. The amounts are not published ([Terminal FAQ](https://terminal.io/faq), checked 12 November 2026).

## What Abillio does

Abillio is not a marketplace, a recruiter or an employer of record. It is the payment and compliance layer for the freelancers and contractors you already work with. More than 17,400 freelancers have used it, and it has paid out over €30M.

*   **Invoices in the contractor’s name.** The contractor does not need their own company or VAT number.
*   **Identity checks and payouts** to bank (SEPA or SWIFT), card, PayPal or Airtm in 170+ countries, one by one or in bulk.
*   **Reporting:** DAC7 for everyone outside Latvia and Estonia, and 1099 support for US freelancers.
*   **Income tax withheld and paid** for Latvian and Estonian tax residents, through Abillio’s own entities there.
*   **Setup in about 5 minutes** for a freelancer or a business account.

**Price: 3% to 5% depending on volume, custom pricing available.** A freelancer who invoices their own client pays 5% of each paid invoice, with no subscription. When a business pays contractors it is 4% of each paid invoice, paid by the business or by the freelancer, their choice, and 3% above €50k a month. Above that, pricing is custom. There is no setup fee and no per-seat fee.

## The key differences

*   **Employee vs contractor.** This is the decision that matters. Treating an employee as a contractor creates [misclassification risk](/en/blog/contractor-misclassification-risk/).
*   **Recurring cost.** An employer of record charges per person per month. Abillio charges a percentage of what you pay, and nothing in a month you pay no one.

## When Terminal is the better fit

Pick Terminal when you want engineers recruited and employed for you, need its time zones, or the role is clearly full-time employment.

## When Abillio is the better fit

Pick Abillio when the person is genuinely independent: their own schedule and tools, other clients, and project or outcome based work.

## Using Terminal and Abillio together

Many companies use both: an employer of record for core full-time staff and Abillio for the independent contractors around them.

**Paying contractors you found through Terminal?** [Talk to us](/book/). In a 30-minute call we work out what your setup would cost on Abillio.

## For contractors in Latvia and Estonia

If a client you met through Terminal pays you directly as a contractor, you can invoice them through Abillio without a company or VAT number of your own. For Latvian and Estonian tax residents, Abillio withholds and pays the income tax and sends the rest to your bank account. In Latvia this runs through the Abillio Services cooperative, in Estonia through Abillio Services OÜ. [Create a free account](https://app.abill.io/auth/signup/) in about 5 minutes.

## Frequently asked questions

### Is Abillio an employer of record?

No. Abillio does not employ anyone or turn contractors into employees. It handles invoices, payouts and reporting for independent contractors.

### Does Terminal publish its fees?

Terminal describes its fee structure (a flat fee per hire, plus a monthly fee when it employs the engineer) but not the amounts (checked 12 November 2026).

### When should a contractor become an employee?

When the work looks like employment: fixed hours, your tools, no other clients, and ongoing duties rather than projects. Then an employment structure such as an employer of record fits better.

Source: https://abill.io/en/compare/terminal/