How to Hire Remote Employees in India using an EOR?

You've found talented professionals in India. You want to hire them. But setting up a legal entity in India? That means months of waiting, $50,000+ in setup costs, and navigating labor laws you don't fully understand. One compliance mistake and you're facing legal issues that cost more than the entity setup itself.

Here's the reality: most global companies hiring remote employees in India don't set up their own entities. They use an employer of record.

This guide walks you through exactly how to hire remote workers in India using an EOR. You'll learn the complete hiring process step by step, what legal compliance actually requires in 2026, which EOR providers handle India hiring best, and what factors matter when choosing your EOR partner.

By the end, you'll know how to onboard remote employees in India quickly, legally, and without the administrative burden of managing Indian employment laws yourself.

Let's get into it.

How to hire remote employees in India with an EOR?[toc=How to Hire via EOR]

To hire remote employees in India using an Employer of Record (EOR), you first find your candidates. Then, the EOR handles local legal employment, contracts, payroll, taxes, and benefits, ensuring compliance with Indian labor laws.

This allows for full-time, legally compliant hiring without needing your own Indian entity. The EOR acts as the legal employer and manages HR administration, while you retain daily control. This simplifies the process and mitigates risks.

Here's exactly how it works:

Step 1: Find and source your talent

Start by defining what you need. Outline the role requirements, skills, and experience you're looking for. Then recruit candidates through job boards, recruitment agencies, or your own network. This part works exactly like your regular hiring process. You interview, assess, and select the candidates who fit your remote team.

Step 2: Choose the right EOR partner

Pick an EOR provider that has a wholly-owned entity in India. This matters because it ensures direct compliance and faster onboarding compared to third party vendors. Look for providers with solid India expertise like Remote, Sky Executive, or Multiplier. The right partner will have experience handling Indian labor laws and can move quickly on hiring employees.

Step 3: Structure the compensation correctly

Work with your EOR to define the "Cost to Company" (CTC) structure. Here's something critical: India has a 50% wage rule. Your employee's basic pay must be at least 50% of the total CTC. This isn't optional. It's how statutory liabilities like provident fund contributions get calculated correctly. Get this wrong and you'll face compliance risks down the line.

Step 4: Get compliant employment contracts in place

Your EOR drafts the employment agreement following local employment regulations. These contracts need to cover probation periods (maximum 6 months under Indian employment laws), notice periods (typically 30 days), and IP ownership clauses. Smart move? Ask for bilingual contracts. They hold up better in Indian courts if legal issues ever come up.

Step 5: Complete employee onboarding

The EOR collects all necessary KYC documents from your new hire. Think PAN card, Aadhaar, bank details. They handle registrations for mandatory benefits like the Provident Fund (PF) and Employee State Insurance (ESI). All the paperwork and administrative tasks that would normally eat up your time? The EOR manages it.

Step 6: Set up payroll and benefits

Now the EOR processes monthly salary disbursement. They handle tax deductions (TDS on salary), manage social security contributions, and ensure benefits administration follows local regulations. Everything from income tax filings to statutory benefits gets taken care of. You don't touch payroll processing at all.

Step 7: Maintain ongoing compliance and daily control

Here's where it gets interesting. The EOR ensures continuous legal compliance with changing labor laws and handles any legislative updates. But you stay in full control of the actual work. You manage daily tasks, assign projects, review performance, and run your remote team in India just like they're in-house employees.

The entire process typically takes 1-2 weeks from selecting a candidate to having them fully onboarded and working. No local entity required, no entity setup costs, and no compliance headaches. You get access to skilled professionals while the EOR handles the legal employer responsibilities.

What are the legal and compliance requirements?[toc=Legal & Compliance]

Hiring remote workers in India means following specific legal compliance rules. Let's break down what you actually need to know.

1. India's labor law framework

India operates under Four New Labor Codes that came into effect. These codes cover Wages, Social Security, Industrial Relations, and Occupational Safety and Health (OSH). Every employer of record must ensure compliance with these regulations when hiring employees in India.

2. Mandatory contributions you can't skip

• Employees' Provident Fund (EPF): Both you (through the EOR) and the employee contribute 12% of basic salary to the provident fund. This is India's retirement savings program. Remember that 50% wage rule from earlier? It directly impacts how much goes into EPF calculations.
• Employee State Insurance (ESI): If your employee earns below ₹21,000 per month, ESI contributions are mandatory. The employer pays 3.25% and the employee pays 0.75% of gross wages. This covers medical benefits and sick leave.
• Gratuity: Employees who complete five years of continuous service are entitled to gratuity payments. The calculation is based on last drawn salary and years of service. Your EOR handles this, but it's part of your cost planning.

3. Tax obligations

Your EOR manages two key tax deductions:

• Income Tax (TDS): Tax is deducted at source from employee salaries based on their income slab and tax regime choice. The EOR files these tax deductions monthly with the Indian tax authorities.
• Professional Tax: This state-level tax is capped at ₹2,500 per year. Different states have different rates, but your EOR handles the variations and tax filings.

4. The 48-hour settlement rule

Here's something critical that changed. Under 2026 rules, when an employee leaves (resignation or termination), you must settle all final dues within 48 hours of their last working day. This includes pending salary, unused leave encashment, and any other dues. Miss this deadline and you face penalties. Your EOR manages this tight timeline.

5. Employment contracts and documentation

Legally compliant contracts need specific clauses. Maximum probation period is 6 months. Notice periods typically run 30 days but can be longer based on seniority. The contract must clearly state CTC breakup, working hours, leave entitlements, and termination terms. Smart EORs provide bilingual contracts because Indian courts sometimes require regional language versions.

6. Compliance considerations when choosing an EOR

• Provider expertise matters: Not all EOR services handle India's complex regulations equally well. Check how responsive they are to compliance questions and whether they have dedicated India focus. Some providers offer better support for navigating local labor laws than others.
• Policy customization limits: Working through an EOR means some HR policies might have less flexibility compared to having your own entities. The EOR typically maintains standard policies to ensure legal compliance across all clients. If you need highly customized benefits management or unique policy structures, discuss this upfront with potential EOR partners.
• Cross-border management factors: You'll manage communication across time zones. India is 9.5 to 13.5 hours ahead of US time zones. Cultural nuances in workplace communication also come into play. While these aren't strictly legal compliance issues, they affect how you ensure compliance with work policies and employee engagement practices.

Indian employment laws are detailed and penalties for non-compliance are steep. Your EOR becomes the legal employer specifically to handle these compliance requirements.

They stay current with legislative changes, manage mandatory benefits, process statutory contributions, and keep you out of legal trouble. That's the entire point of using employer of record services.

Who are the best EOR service providers in India?[toc=Best EOR Providers]

Several EOR providers operate in India, each with different strengths. Here's a quick rundown of who's worth considering:

1. Wisemonk is a specialized EOR platform for hiring remote employees in India. Wisemonk manages $20M+ in payroll for 300+ global companies and handles 2,000+ employees. Wisemonk's focus on the Indian market means they understand local compliance inside out. If you're specifically hiring in India, specialized focus often beats generalist platforms.
2. Remote offers global coverage with solid India operations. They handle employment contracts, payroll processing, and benefits administration across multiple countries. Good choice if you're building remote teams in several markets simultaneously.
3. Multiplier provides EOR services across Asia-Pacific with strong India expertise. They emphasize quick onboarding of remote teams and handle compliance requirements efficiently. Their platform is built for global businesses expanding into multiple Asian markets.
4. Deel is known for their tech platform and contractor-to-employee conversion capabilities. They cover both hiring employees and hiring contractors, which helps if you're testing the waters before making full-time hires.
5. Velocity Global brings decades of experience in international hiring. They offer comprehensive benefits management and handle complex compliance scenarios for global enterprises.

What makes a provider "best" depends on your needs:

Are you hiring only in India or building a global team? Do you need basic payroll management or complex benefits customization? What's your budget for EOR services versus potential entity setup costs? How important is direct support versus platform self-service?

For a detailed breakdown of features, pricing, compliance capabilities, and what each provider actually delivers, check out our comprehensive comparison of the best Employer of Record providers in India.

What are the key factors companies must evaluate when hiring remote employees via an EOR?[toc=Factors to Consider]

Choosing an EOR isn't just about price. Here are the factors that actually matter when you're hiring remote workers in India:

1. Compliance structure: Does the provider have a wholly-owned entity in India or use third party vendors? Direct ownership means better legal compliance and fewer compliance risks. Ask how they handle changes to Indian labor laws.
2. Onboarding speed: Good providers onboard remote employees in 7-10 days. Slower ones take 3-4 weeks. If you need to move fast on hiring skilled professionals, this matters.
3. True cost transparency: Look past the base fee. Are provident fund contributions, ESI, gratuity, statutory benefits, and tax filings included? Some EOR services advertise low rates then add charges for benefits administration and compliance reporting. Get the complete cost to company upfront.
4. India expertise: Can they handle the 50% wage rule? Do they provide bilingual contracts? Generic global platforms often miss local regulations that specialists navigate easily.
5. Support responsiveness: When payroll issues come up, can you reach someone quickly? Check if you get dedicated support or ticket systems.
6. Platform usability: You'll manage employment contracts, payroll processing, and compliance reporting through their system. It needs to work smoothly and integrate with your existing tools.
7. Scalability: Hiring 5 employees now but planning for 50? Make sure the provider handles growth without pricing surprises or service quality drops.

Get started with Wisemonk EOR[toc=Wisemonk EOR]

If you're ready to hire remote employees in India without compliance headaches, Wisemonk offers a straightforward path.

We've assisted over 300 global companies in hiring and managing more than 2,000 employees across India, processing over $20 million in payroll. Our platform manages everything, from drafting legally compliant employment contracts to handling Employees Provident Fund contributions and filing payroll taxes punctually.

What sets Wisemonk apart:

We have our own legal entity in India, meaning you work directly with the Employer of Record (EOR), not an intermediary. Our team understands both Indian labor laws and the specific needs of foreign employers. This leads to quicker onboarding, clearer communication, and fewer unexpected costs.

Here's how to begin:

Schedule a brief call with our team to discuss your hiring plans. We'll demonstrate our platform, detail the precise costs for your situation (salary, statutory contributions, and our fee), and address any questions you have about Indian employment regulations.

Most clients onboard their first employee within 48 hours of deciding to proceed.

Ready to hire your remote team in India? Book a call now to see how Wisemonk simplifies global hiring.