Employer of Record (EOR) in India: Hire Without an Entity

India gives global companies access to one of the world's deepest talent pools, especially in engineering, product, and customer support.

The catch is the rulebook. Hiring here means dealing with both central and state labor laws, mandatory social security, and four new labor codes now in force.

Building your own legal entity to handle all this takes months and real money. An EOR in India lets you hire without one, and it is the faster route.

Here is how it works, what it costs, and how to choose one.

What is an Employer of Record (EOR) in India?

An Employer of Record (EOR) in India is a company that already holds a legal entity in the country and becomes the official employer of your India team on paper. You still choose who to hire, direct their work, and manage them day to day.

The EOR owns the legal side: employment contracts, monthly payroll, tax withholding, and statutory benefits like Provident Fund, India's mandatory retirement savings scheme, similar to a 401(k).

This means you can hire full-time employees in India without opening your own subsidiary.

From what we have seen supporting 300+ global companies building teams in India, most teams start with an EOR for their first few hires and only weigh an entity once headcount climbs.

If you are choosing between providers, our best EOR in India guide compares and ranks the top ten. The sections below explain how an Employer of Record in India works and what it costs.

How does hiring through an EOR in India work?

The process is straightforward: you pick the candidate, the EOR puts them on a compliant local contract, and they start work, usually within one to two weeks.

From there the EOR runs payroll and handles compliance every month, while you manage the actual job.

A typical flow looks like this:

1. You choose the person and agree on salary and role.
2. The EOR issues a compliant Indian employment contract, often within 24 to 48 hours.
3. The EOR sets up a compliant, tax-efficient salary structure, splitting pay into components such as basic, HRA and allowances so the employee keeps more after tax while payroll stays compliant.
4. The new hire is registered for Employee Provident Fund (EPF) and Employee State Insurance (ESI), India's state-run medical cover for lower-income workers.
5. Each month, the EOR pays the salary in rupees, deducts income tax at source (known as TDS), and files the required returns.
6. You direct the daily work, and the EOR stays the legal employer on record.

Map a compliant day-0-to-30 onboarding plan with our onboarding timeline generator.

One timing note: hiring an Indian national usually takes one to two weeks, while a foreign national who needs an employment visa can take six to ten weeks.

What do EOR services in India actually include?

A full-service EOR company in India runs the entire employment lifecycle for your team: compliant contracts, monthly payroll, statutory contributions, benefits, and a clean exit.

You keep the work and the relationship, while the EOR service provider carries every legal and administrative task an Indian employer is required to handle.

Core EOR services in India cover:

• Employment contracts: compliant offer letters and agreements drafted under the Indian Contract Act and the relevant state Shops and Establishments Act, with IP and confidentiality clauses built in.
• Payroll and tax: monthly payroll in rupees, TDS (tax deducted at source), payslips, and year-end tax statements, with USD, GBP, or EUR in and INR out.
• Statutory compliance: Provident Fund, ESI, professional tax, gratuity, and Labour Welfare Fund registration and monthly filing.
• Benefits administration: health, accident, and life insurance, plus statutory leave.
• Onboarding and offboarding: a compliant offer in 24 to 48 hours at the start, and a full and final settlement when someone exits.
• In-country HR support: a dedicated India-based point of contact who knows the state-level rules.

A full-service EOR in India bundles all of this under one contract and one monthly invoice, so you are not stitching together a separate payroll vendor, benefits broker, and compliance consultant. It is the difference between a provider that just runs payroll and one that owns the whole lifecycle.

What are the key employment rules in India?

These apply across India as of September 2026:

Why do US companies use an EOR to hire in India?

Most US companies do not turn to an EOR to shave off a few dollars. They do it to avoid the kind of problem that shows up a year later, when a tax notice or an ownership dispute lands on someone's desk.

A handful of specific risks drive the decision:

• To skip months of entity setup: Registering your own company in India and getting it payroll-ready can take several months and real legal cost before anyone starts working. An EOR already holds the entity, so your hire can begin in days.
• To avoid permanent establishment (PE) risk: This is the one that worries finance teams most. If your company directs a team in India without a local entity, Indian tax authorities can decide you have a taxable presence there, called a permanent establishment, and tax a portion of your global profits, often with penalties added. Because the EOR's Indian entity is the legal employer, you stay its client rather than a company operating in India, which keeps that exposure low.
• To avoid worker misclassification: A common shortcut is to label full-time staff as "contractors" to avoid the paperwork. In India that can backfire: authorities can reclassify them as employees and bill you for back taxes and unpaid Provident Fund contributions. Indian courts weigh factors like control, integration, exclusivity, and who provides the tools, so a written contract alone does not settle the question. An EOR employs people correctly from day one, so it never comes up.
• To secure IP ownership: India's defaults catch people off guard. Copyright in work an employee creates on the job usually sits with the employer, but patents do not, and contractors keep what they make unless a written assignment says otherwise. An EOR builds proper IP assignment into every contract, so what your India team creates belongs to you.
• To get India's compliance right: India's rules run at both central and state level, covering Provident Fund, Employee State Insurance, professional tax, and tax withholding, and the four new labor codes from November 2025 reshaped several of them. From our experience supporting global companies hiring in India, this is where most do-it-yourself attempts quietly go wrong.

How much does an Employer of Record in India cost?

An EOR in India has two costs:

• EOR service fee: what you pay the provider, usually $99 to $699 per employee a month. It covers payroll, compliance filing, and employment contracts.
• Statutory contributions: set by law, so the same whichever provider you choose. On top of the gross salary, you cover Provident Fund, gratuity, and group medical cover.

Providers charge the service fee one of two ways: a flat amount per employee, which stays predictable as salaries rise, or a percentage of payroll (usually 10 to 20 percent of gross), which climbs with every raise.

India-native specialists like Wisemonk that own their entity sit at the lower end, near $99 per employee. Global platforms run $499 to $699, and enterprise providers are quote-based from $599. For India-only hiring, India-focused providers are usually the lowest total cost.

Add it together and you get the total cost of employment, the number your finance team actually cares about.

Here is what one hire actually costs, line by line, on a salary of $6,253 (₹6,00,000) a year, as of September 2026. It is an estimate, not a quote:

Want the full numbers? Our complete guide to the cost of an Employer of Record in India breaks down every pricing model, the hidden charges to watch for, and worked examples by salary band.

How do EOR payroll and taxes work in India?

An EOR runs your India payroll every month. It pays the employee in rupees, deducts tax at source, and files the returns, while you fund it in your own currency.

• Monthly payroll cycle: salaries run monthly and are paid in Indian rupees. The EOR issues payslips, converts your USD, GBP or EUR into INR, and keeps the pay run on schedule.
• Tax deducted at source (TDS): the EOR withholds income tax from each salary, deposits it with the government, and issues Form 16 at year end. The tax year runs 1 April to 31 March.
• Old vs new tax regime: employees pick the new regime (lower rates, fewer deductions) or the old one (more exemptions), and the EOR applies their choice each month. Compare the two with our income tax calculator.
• Statutory bonus: staff earning up to ₹21,000 a month in basic plus DA are owed 8.33 to 20 percent under the Code on Wages, payable within eight months of year end. It is India's closest equivalent to a 13th-month salary.

Want the full mechanics? Our guide on how to pay employees in India walks through the pay run, deductions and filings step by step.

What employment compliance does an EOR in India handle?

An EOR takes on every statutory obligation of employing someone in India: it registers the employee, remits contributions each month, and files the returns on time. Because India runs employment law at both central and state level, the exact rules depend on where your employee works.

Statutory contributions

Here are the main employer-side items an EOR manages:

These contributions are not flat. Provident Fund caps at the ₹25,000 monthly wage ceiling and ESI stops above ₹21,000 a month, so the statutory add-on shrinks as salary rises and can fall to low single digits for senior hires.

Some states also run a Labour Welfare Fund, a small contribution from both employer and employee that the EOR deducts and deposits with the state board where it applies.

Beyond the contributions, the EOR runs monthly payroll in rupees, issues payslips, and files PF, ESI, and TDS returns.

It also covers the start and end of employment: compliant onboarding, statutory leave, and a clean full-and-final settlement when someone exits.

Getting any of this wrong invites interest, penalties, or an audit, which is exactly what an EOR is there to prevent.

For the full list, see our guide to statutory employee benefits in India.

Contracts and pay rules

Three rules shape every India contract and payslip:

• Appointment letters from day one: every employee must receive a written appointment letter stating their designation, wages and social security.
• Allowances capped at half of pay: where allowances exceed 50% of total pay, the excess is counted back as wages, which can raise the base for benefits such as gratuity.
• Minimum wage: set by each state by skill grade and zone. There is no binding national rate, only a non-binding advisory floor of about ₹178 a day.

Working hours and overtime

Under the OSH Code, a standard day is eight hours and a week is 48. Overtime is paid at twice the normal wage under the Code on Wages, and office staff also follow their state's Shops and Establishments Act.

Need the detail on overtime pay and hour limits? See our guide to overtime rules in India.

Notice, severance and final settlement

When you exit an employee in India, the EOR runs the statutory offboarding: notice, any severance the law requires, and a clean full and final settlement. India protects employees at exit more than the US does, so terms are set by law and contract, not by the employer alone.

Here is what the exit involves, as of September 2026:

• Notice period: no single national law; set by the contract and state Shops and Establishments Acts, commonly one to three months.
• Severance: for workers under the Industrial Relations Code, retrenchment after one year means 15 days' average pay per completed year, plus a month's notice or pay in lieu.
• Gratuity: 15 days' pay per year after five years, capped at $21,000 (₹20 lakh); fixed-term staff earn it pro-rated after one year.
• Full and final settlement: under Section 17(2) of the Code on Wages, the EOR pays all dues within two working days of the last working day.

What do India's new labour codes mean for EOR hiring in 2026?

India replaced 29 older laws with four labour codes, in force since November 2025, with the final central rules notified on 8 May 2026. The EOR applies the new rules to your payroll and contracts for you.

• The four codes: the Code on Wages, Code on Social Security, Industrial Relations Code and OSH Code govern pay, benefits, disputes and working conditions. The biggest 2026 change: the Provident Fund wage ceiling rose from ₹15,000 to ₹25,000 a month on 17 September 2026, its first revision since 2014, so anyone joining on wages between ₹15,000 and ₹25,000 now comes under mandatory PF.
• Misclassification penalties: labelling a full-time worker a "contractor" can backfire; authorities can reclassify them and bill back taxes and unpaid PF. An EOR employs people correctly from day one. Check your risk with our 2-minute misclassification quiz.
• State-level rules: a single national contract falls short, because each state sets its own minimum wage, holidays and Labour Welfare Fund. The EOR builds the right state's rules in.

Want a deeper breakdown of the 2026 changes? Read our full guide to the new labour codes in India.

What are employees entitled to under an EOR in India?

Under an EOR, your India employee gets the same statutory entitlements as any employee in India: paid annual and sickness leave, 26 weeks of maternity leave, national and festival holidays, Provident Fund retirement savings, ESI medical cover where wages qualify, and gratuity after five years. The EOR administers every one of them.

Leave and public holidays

Leave in India is set mainly by state law, not by one national rule. Using Karnataka, home to Bengaluru, as the example: paid annual leave builds up at one day for every 20 days worked, there is a separate allowance for sickness, maternity leave is 26 weeks, and employees get three national holidays plus festival holidays.

The main entitlements, as of September 2026:

Rules differ by state, so the EOR builds the rules for your employee's state into the contract and payroll.

Planning your team's year? See the full holiday calendar for India in 2026 and 2027, or work out the leave and holidays for your employee's state with our holiday and leave policy calculator.

Social security benefits

Each statutory contribution in the compliance section above also builds a benefit the employee keeps:

• Provident Fund: retirement savings, with part of the employer's share funding a monthly pension from age 58 once the employee has 10 years of service, plus automatic life cover for every member.
• Employee State Insurance: medical and sickness cover for employees earning $220 (₹21,000) a month or below.
• Gratuity: a lump sum at exit after five years of service, or after one year on a fixed-term contract, as set out in the exit rules above.

Health insurance

Private health insurance is not required by law for most employees, because ESI only covers lower-wage staff, but candidates in India's tech market expect a group policy.

The EOR arranges it as part of the package, and our guide to health insurance through an EOR covers what to expect and negotiate.

Should you use an EOR or set up your own entity in India?

For most companies making their first hires in India, an EOR wins on speed and cost.

Setting up your own entity takes three to six months before anyone can start, on top of ongoing accounting, tax filings, and compliance staff. An EOR carries none of that overhead, and your hire can begin in days.

The math flips once you scale. As a rough rule, an entity starts to pay off when you have a few dozen long-term employees in one location and want a permanent local presence, your own brand, or custom benefits.

Read more: EOR vs Entity in India: Cost, Timeline & When to Switch

What is the difference between an EOR and a PEO in India?

The difference comes down to one thing: whether you already have an Indian entity. An EOR becomes the legal employer on its own entity, so you need none. A PEO works on your entity, running payroll and compliance under your own registrations.

• EOR: becomes the legal employer through its own Indian entity, so you can hire without setting one up. Best when you have no India presence.
• PEO: runs payroll, PF, ESI, TDS, benefits and HR on your existing Indian entity. Best once you already have one.
• When to switch: around 25 to 30 employees, your own entity plus a PEO often costs less than per-head EOR fees.

For the full breakdown, see our EOR vs PEO in India comparison.

Can an EOR in India hire foreign nationals and handle work visas?

Yes. An EOR can employ foreign nationals in India, but it takes longer than hiring a local.

• Indian nationals: hired in one to two weeks, needing only a PAN.
• Foreign nationals: need a valid employment visa and registration with the local Foreigners Regional Registration Office (FRRO), so expect six to ten weeks.
• What the EOR does: employs the foreign national on its Indian entity once the visa is in place, and handles the FRRO registration and ongoing compliance.

Hiring a non-Indian national? See our India work visa and permit guide for employers.

How does an EOR run background checks (BGV) in India?

An EOR runs compliant background checks before a hire starts, with the candidate's consent.

• What's checked: identity, employment, education, address, and court and police records, across 19 check types.
• Speed: a basic check returns in about five minutes; a full report takes 7 to 10 days.
• Consent first: India's data protection law (DPDP) requires the candidate's written consent before any check is run.

See how Wisemonk runs background verification in India, from $50 per candidate for the standard package, as of September 2026.

How do you choose the best EOR provider in India?

For hiring only in India, the best EOR is usually an India-native provider such as Wisemonk, which owns its Indian entity and becomes the legal employer itself rather than routing your team through a local partner. Global platforms suit you better if you are hiring in many countries at once.

Owned-entity providers handle compliance directly, which means faster fixes and fewer layers between you and a problem. Aggregators add a middleman, and that middleman is what slows things down when something goes wrong.

A few other things worth checking before you sign:

• Transparent pricing: Confirm the flat fee includes benefits administration and compliance. Watch for setup fees, security deposits, and foreign-exchange markups that only appear later.
• In-country HR support: You want real people in India who know the state-level rules, not just a ticket queue in another time zone.
• A clean compliance record: Ask how they handled the November 2025 labor-code changes. A provider that walked clients through the new wage definition and the revised gratuity rules without being chased is one that stays ahead of the law.
• Onboarding speed: The good ones issue a compliant offer in 24 to 48 hours.
• IP and data security: Make sure IP assignment is written into every contract, and that the provider handles personal data under India's Digital Personal Data Protection Act, 2023, whose obligations are phasing in as of September 2026.

From our experience working with 300+ global companies, the providers worth keeping are the ones that treat compliance as their job, not yours.

Before you sign, check our guide to the red flags in an EOR contract.

How does Wisemonk EOR simplify Employer of Record in India?

Wisemonk is an India-native EOR platform built from the ground up for global companies hiring in India. We provide employer of record services in India end to end, from contract to exit.

As an India employer of record, we operate through our own Indian legal entity, with no partner network, and start at $99 per employee per month with no hidden FX markups.

As an EOR India specialist, we generate a compliant employment agreement in about five minutes, onboard hires in under 48 hours, and assign a dedicated India-based HR manager to every client.

We are not a global platform with India on the side. India is the only market we work in. As your India EOR, that single-market focus is the point.

Here's how Wisemonk, your India EOR partner, helps global businesses:

• Compliant employment contracts drafted under the Indian Contract Act and the applicable state Shops and Establishments Act, with IP and confidentiality clauses built in
• Payroll run in-house on our own payroll platform, with USD or EUR or GBP in and INR out, and full transaction-level FX transparency
• Monthly statutory filings: EPF, ESI, TDS, professional tax, Labour Welfare Fund, and the new Labor Code requirements
• Customizable health insurance with executive-level cover, tax-optimized CTC structuring, and equipment procurement if needed
• Offboarding, full and final settlement within two working days of the last working day as required by the Code on Wages, and clean exit documentation
• Contractor of Record (COR) services alongside EOR, for teams running hybrid models
• Entity transition support when you scale past the EOR route and move to your own Indian subsidiary

From our experience supporting US, UK, Canada, and EU teams hiring into Bengaluru, Hyderabad, Pune, NCR, and tier-2 cities across India, the pattern that works is the same every time: start lean with an EOR, stress-test the India strategy for 12 to 24 months, then either keep scaling with us or transition to your own entity with our support.

Hear from industry leaders

Founders, HR and finance leaders across the US, Europe, SEA and Oceania trust Wisemonk. See more on our reviews page.

The Wisemonk team played a key role in helping us hire for specialized B2B SaaS marketing skills. We were able to build the team within four months, and hire experienced professionals from Tier 1/major B2B SaaS brands. This includes SEO, digital marketing, business development, product marketing, content marketing, and GTM roles. They are a great partner providing integrated services for EOR and recruitment/hiring and I'd recommend them to any B2B SaaS vendor.
- Saurabh Sharma, Chief Marketing Officer at Onereach, USA

What does hiring in India through an EOR look like in practice?

The clearest picture comes from teams who have already built in India. Here are two companies that set up their India operations with us:

• How Onform built its India engineering team to accelerate the product roadmap
• How OneReach.ai built a high-impact marketing and growth team in India

Each one walks through the challenge the team started with, how the India setup was structured, and what it took to keep the employment side compliant.

Where can you go deeper on hiring and retention?

If you are still deciding how to structure the hire, these go a level deeper on the models and the practical pitfalls:

• Hire through a PEO in India
• Hire developers in India without a local entity
• How to hire remote developers in India
• How to retain India developers long term
• India developer hiring mistakes to avoid

Between them they cover the decisions that come up from your first offer through to a stable team.

How do you build and scale your India operations?

Once the first hires are in place, the questions shift to structure, equity, and working hours:

• US SaaS startup founder playbook for hiring in India
• Building India operations before opening a subsidiary
• Hiring India employees for US EST time-zone overlap
• ESOPs for India employees of foreign startups

Each of these deals with a stage most teams reach within the first year of hiring in India.