- Verify the EOR owns their registered entity in India: Request their MCA registration, TAN, PF codes, and ESI codes directly. Third-party intermediaries create accountability gaps and compliance risks.
- Choose flat-rate pricing over percentage-based models: Percentage pricing (10-15% of salary) becomes expensive as employees get raises. Flat rates typically run $99-$200 per employee monthly.
- Confirm state-specific compliance expertise and bilingual contracts: The EOR must handle regional variations in labor laws across states and provide contracts enforceable in local labor courts with regional language versions.
- Check platform security meets GDPR, ISO 27001, and India's DPDPA standards: The dashboard should integrate with your HR systems and provide real-time visibility into payroll, statutory deductions, and compliance documents.
- Evaluate onboarding speed and local HR support: Quality providers complete KYC and onboarding in 5-7 days. On-ground HR teams in India resolve payroll and PF issues faster than global ticketing systems.
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You've decided to hire talent in India, but navigating Provident Fund regulations, state-specific labor laws, and statutory compliance is overwhelming. One mistake with employment contracts or tax filings could mean penalties, legal disputes, or losing great employees to payroll problems.
Choosing the wrong EOR provider makes everything worse. Hidden fees destroy your budget. Slow onboarding means top candidates go to competitors. When compliance issues hit, you're stuck with generic support instead of real experts who understand Indian labor laws.
This guide shows you exactly how to evaluate EOR providers in India. You'll learn what questions to ask about local entity ownership, how to spot pricing traps, which compliance credentials matter, and how to ensure proper employee support. By the end, you'll know how to pick an EOR partner that handles the complexity while you focus on building your team.
How can you choose the right EOR service provider in India?[toc=Choose the Right EOR]
Selecting an Employer of Record (EOR) provider in India is one of those decisions that will either make your expansion smooth or create headaches for years. You're not just picking a payroll vendor; you're choosing a legal employer for your team who'll handle everything from compliance to employee satisfaction.
Here's what you actually need to evaluate:
1. Verify they own their local legal entity
This is non-negotiable. Your EOR provider must have their own registered entity with the Ministry of Corporate Affairs in India, complete with their own TAN, PF codes, and ESI registrations. Some providers use third-party intermediaries or subcontractors, which creates delays, accountability gaps, and potential compliance risks.
Ask directly: "Do you own your local entity, or do you use partners?" Direct presence means faster tax filings, better control over statutory contributions, and someone who's accountable when things go wrong.
2. Check their mastery of central and state laws
India's regulatory environment isn't just complex, it's state-specific. The Shops and Establishments Act varies dramatically between Maharashtra and Karnataka. A provider claiming "we handle Indian compliance" isn't enough.
They need to demonstrate expertise in:
- The Income Tax Act and TDS filing requirements
- EPF (Provident Fund) and gratuity tracking across different salary bands
- ESIC (Employee State Insurance) thresholds and exemptions
- State-specific labor laws and professional tax variations
Ask them about a specific state where you're hiring. If they can't give you detailed answers about local labor court requirements or regional statutory benefits, keep looking.
3. Demand bilingual, enforceable employment contracts
Your employment contracts need to be more than translated templates. They should be localized for regional labor court requirements and available in both English and the local language if needed. Contract enforceability matters when you're dealing with employment law disputes. The right EOR provider will have legal teams who understand how Indian courts interpret employment terms.
4. Understand the pricing model upfront
Most EOR providers in India use one of two models: a flat monthly fee (typically around $99-$200 per employee) or a percentage of gross salary (usually 10-15%). Here's the reality: percentage-based pricing becomes expensive fast. As your employees get raises or you hire senior talent, your EOR costs balloon. It's essentially a profit trap.
Go with flat-rate pricing whenever possible. Then dig into the hidden fees: What do they charge for onboarding? Offboarding? Hardware procurement? Benefits administration? Termination processing? Get every cost itemized before you sign. If they're vague about pricing during sales conversations, imagine how unclear the invoices will be.
5. Evaluate their technology platform
You need a modern, secure dashboard that gives you real-time visibility into payroll processing, attendance tracking, statutory deductions, and compliance documents. The platform should integrate with your existing HR management systems, not force you into manual data entry.
Check their security standards too. They should comply with GDPR, ISO 27001, and India's Digital Personal Data Protection Act (DPDPA). You're handing over sensitive employee data; make sure they're protecting it properly.
6. Test their employee onboarding speed
Speed matters when you're trying to secure good talent in a competitive market. A quality EOR provider should issue offer letters and complete KYC and background verification within days, not weeks. Ask about their typical timeline from offer acceptance to first day of work. Anything longer than 5-7 days suggests operational inefficiency.
7. Review their benefits offerings
Statutory benefits like PF and ESI are mandatory, but your EOR should offer more. For tech talent in India, a health insurance baseline of ₹30 lakhs is becoming standard. Look for providers who offer competitive health insurance packages, handle leave encashment properly, and provide local perks like meal cards that employees actually value.
The benefits administration should be transparent. Your team members should know exactly what they're getting and how to access it.
8. Confirm they have on-ground HR support
Global ticketing systems are fine for simple queries, but when an employee has a payroll issue or PF question, they need human support from someone who understands Indian regulations. Ask if the provider has dedicated HR teams in India who can resolve issues in real time, not support staff halfway around the world reading from scripts.
9. Check their scalability
Whether you're hiring your first employee or your hundredth, the EOR should handle growth smoothly. Ask about their largest clients in India. Can they support you if you suddenly need to scale from 10 to 50 employees in six months? Do their systems handle automated payroll at scale, or will you hit operational bottlenecks?
10. Plan for your exit strategy
This might seem premature, but think ahead. If your India operations grow significantly, you might want to establish your own private limited company later. Choose an EOR partner that can support this entity transition, not one that makes it difficult to leave.
Also, verify how they handle employee exits. They must properly process Full and Final (F&F) settlements, including leave encashment, gratuity calculations, issuance of Form 16 (tax statements), and relieving letters. Exit compliance done wrong creates legal risk and damages your employer brand.
11. Compare global platforms versus local specialists
You'll see big names like G-P, Deel, and Remote alongside India-focused providers like Wisemonk. Global platforms offer consistency if you're hiring across multiple countries, but specialized local providers often have deeper regional expertise and better understanding of complex labor laws in specific states.
There's no universal right answer. Match the provider's strengths to your needs.
12. Review contract terms carefully
Before signing, scrutinize the contract for IP protection clauses, clear termination terms, and service level agreements (SLAs). What happens to your employee data if you switch providers? Who owns work product created by employees? What are the notice periods? These details matter when managing payroll and compliance responsibilities long-term.
The right EOR provider doesn't just ensure full compliance; they become a strategic partner in workforce management, handling the administrative burden while you focus on building your global teams. Take the time to choose wisely.
Why Choose Wisemonk as Your Employer of Record in India?[toc=Why Choose Wisemonk]
If you're ready to hire employees in India without compliance headaches, Wisemonk offers a straightforward path.
We've helped over 300 global companies hire and manage more than 2,000 employees across India, processing over $20 million in payroll. Our platform handles everything from drafting legally compliant employment contracts to managing Provident Fund contributions and filing payroll taxes on time.
What sets Wisemonk apart:
We own our local legal entity in India, meaning you work directly with the Employer of Record (EOR), not intermediaries. Our team understands both Indian labor laws and the specific needs of international companies. This leads to faster onboarding, transparent pricing with no hidden fees, and better employee support through our on-ground HR teams.
Here's how to begin:
Schedule a brief call with our team to discuss your hiring plans. We'll show you our platform, break down the exact costs for your situation (salary, statutory contributions, and our fee), and answer any questions about Indian employment laws.
Most clients onboard their first employee within 48 hours of deciding to proceed.
Ready to build your team in India? Book a call with Wisemonk and see how we simplify global hiring while ensuring full compliance.
Frequently asked questions
How long does it typically take to set up with an EOR in India?
Most EOR providers can get you operational within 3-5 business days. This includes setting up your account, configuring payroll systems, and preparing employment contracts. Some providers like Wisemonk can onboard your first employee within 48 hours once you've made the decision.
What's the minimum number of employees I need to hire through an EOR?
There's no minimum requirement with most EOR providers. You can hire a single employee or scale to hundreds. However, some providers may have minimum monthly fees regardless of headcount, so clarify this during your evaluation.
Can I switch EOR providers if I'm unhappy with the service?
Yes, but the process involves transferring employees to the new provider's legal entity, which requires proper notice periods and documentation. Check your contract for exit clauses and transition support before signing with any provider.
How does EOR cost compare to setting up my own entity in India?
Setting up a private limited company in India costs $3,000-$5,000 initially, plus ongoing accounting, legal, and HR overhead of $2,000-$4,000 monthly. An EOR makes sense if you're hiring fewer than 10 employees or testing the market before committing to your own entity.
What happens if there's a labor dispute with an employee?
The EOR acts as the legal employer and handles labor court proceedings, settlement negotiations, and legal documentation. However, you're still involved in the process since you direct the employee's work. Ensure your EOR has experience managing disputes and clear protocols in their contract.
Can an EOR help me convert contractors to full-time employees?
Yes, EOR providers can help you properly classify workers and transition contractors to compliant employment relationships. This is crucial because misclassification of employees as contractors can result in penalties, back payment of statutory benefits, and legal complications under Indian labor laws.
Do I need to visit India to hire through an EOR?
No, the entire process can be handled remotely. The EOR manages all local requirements including signing employment contracts, registering with statutory authorities, and handling government filings. You can hire, onboard, and manage your Indian team entirely from your home country.
