Hire Through a PEO in India: The Complete Guide

Want to hire employees in India but don't want the hassle of setting up a legal entity?

You're in the right place.

Setting up a local business entity in India takes months and costs thousands. Then you need to figure out Indian labor laws, payroll management, tax compliance, and benefits administration. It's a lot.

Hire through a PEO (Professional Employer Organization) or EOR (Employer of Record). You get to hire employees in India within days, stay compliant with local employment laws, and skip the entity setup entirely.

In this guide, I'll walk you through everything you need to know about hiring through a PEO in India, how the process actually works, and how to choose the right provider for your business.

Let's get started!

What are the hiring models in India: PEO vs. EOR?[toc=PEO vs. EOR]

When you're looking to hire in India, you'll encounter two main hiring models: PEO (Professional Employer Organization) and EOR (Employer of Record).

Here's what you need to know about each:

1. Understanding the EOR Model

An Employer of Record (EOR) acts as the legal employer for your Indian employees. They handle everything from employment contracts and payroll management to ensuring compliance with local labor laws. You don't need a local entity in India to hire through an EOR.

Here's how EOR model works:

1. The EOR becomes the employer on paper
2. Manages statutory benefits like the provident fund (PF) & Employee state insurance (ESI)
3. Handles tax deductions under the Income Tax Act
4. Takes on employer responsibilities for legal compliance

Your employees work for you day-to-day, but the EOR handles all the legal and administrative heavy lifting in the Indian market.

2. Understanding the PEO Model

A Professional Employer Organization (PEO) works differently. You need to have your own legal entity registered in India first. The PEO then provides HR services and handles specific functions like payroll processing, benefits administration, and compliance with Indian labor laws.

Think of it as HR outsourcing. The co-employment model means you remain the legal employer, while the PEO manages HR operations, tax filing, and regulatory compliance on your behalf.

Which Model Should You Choose?

If you're a foreign company without a presence in India, an EOR (often called a Global PEO internationally) makes the most sense. You can hire employees quickly without navigating Indian law requirements for setting up a local partner entity.

If you already operate in India with a registered entity, PEO services can help streamline your HR functions and reduce the burden of payroll management and benefits administration.

The term "Global PEO" and "EOR" are often used interchangeably in the international market, which can be confusing. For practical purposes, when someone says they want to "hire through a PEO in India" without an entity, they're actually looking for an EOR service.

How to Hire Through an EOR (Global PEO) in India?[toc=How to Hire]

Hiring through an EOR in India is simpler than you think.

Let me walk you through exactly how it works:

Step 1: Choose Your EOR/PEO Service Provider

First, you'll need to pick an EOR/PEO service provider that operates in India.

Look for someone with solid experience in payroll management, benefits administration, and handling local employment laws.

Check if they know Indian labor laws well and can handle international employees without making things complicated for you.

Step 2: Share Candidate Details

Found someone you want to hire?

Great. Just send their details to your EOR:

• Full name and contact info
• Job title and what they'll do
• Salary breakdown
• Start date
• Where they'll work in India

That's it from your side.

Step 3: EOR Prepares Employment Contracts

Your EOR drafts the employment contracts (they know Indian law, so you don't have to). These cover salary, notice period, leave entitlements like paid annual leave and paid maternity leave under the Maternity Benefit Act, and all the legal stuff.

You review it, suggest changes if needed, and approve. Done!

Step 4: Employee Onboarding

Here's where the EOR does the heavy lifting:

• Collects employee documents (PAN card, Aadhaar, bank details)
• Sets up payroll processing
• Enrolls them in provident fund and employee state insurance
• Handles professional tax registration
• Sorts out health insurance

You just onboard them to your team and get them working on actual projects.

Step 5: Ongoing Payroll and Compliance Management

Every month, your EOR handles:

Payroll stuff:

• Pays salaries (following the Minimum Wages Act)
• Deducts payroll taxes
• Makes social security contributions (EPF, ESI)
• Processes reimbursements

Compliance stuff:

• Files tax returns
• Manages labor laws compliance
• Handles government audits
• Keeps up with changing local labour laws

Benefits stuff:

• Tracks leave balances
• Processes maternity benefits
• Manages insurance claims
• Handles gratuity and severance pay when needed

Step 6: Day-to-Day Management

Here's what you control versus what the EOR handles:

How Fast Can You Actually Hire?

• Initial EOR setup: 1-2 days
• Contract preparation: 2-3 days
• Employee onboarding: 3-5 days
• Total: 7-10 days from "yes, you're hired" to first day of work

Compare that to setting up a local entity (2-4 months) and you'll see why foreign companies entering the Indian market love this option.

What Do You Need to Provide?

Not much:

• Your company registration documents
• Who's authorized to sign
• Job description and salary details

The EOR collects everything from the employee and makes sure it meets local laws requirements.

Hiring International Workers

If you're hiring international workers who'll work from India, your EOR can help with visa requirements (if they're not Indian citizens), tax compliance for foreign nationals, and making sure everything's legal for cross-border employment.

You get workforce management flexibility without drowning in employment practices documentation.

What are the key benefits of using a PEO in India?[toc=Benefits of PEO]

Using a PEO in India solves the biggest headaches foreign companies face when expanding to the Indian market.

Here's what you get from an EOR:

1. No Local Entity Needed: You can hire employees in India without setting up a legal entity. Skip the 2-4 month setup process and $5,000-$15,000 in costs. Start hiring in days, not months.
2. Complete Legal Compliance: Your EOR handles all compliance with Indian labor laws, including the Minimum Wages Act, Maternity Benefit Act, provident fund regulations, and employment laws. They manage tax filing, regulatory compliance, and keep you covered on compliance risks.
3. Simplified Payroll Management: Payroll processing, tax deductions, social security contributions, provident fund, professional tax, and employee state insurance are all handled for you. Salaries get paid correctly and on time, every time.
4. Full Benefits Administration: Your employees get statutory benefits like health insurance, paid annual leave, paid maternity leave (26 weeks), gratuity, and employee state insurance. The EOR manages enrollment and claims so you don't have to become an expert in benefits administration.
5. Reduced Risk Management: The EOR takes on employer responsibilities and manages compliance and risk management. They handle employment contracts properly, avoid misclassification of independent contractors, and protect you from employment-related legal issues.
6. Complete HR Services Without the HR Team: You get HR outsourcing that covers recruitment support, onboarding, HR processes, employee relations, and HR operations. No need to build an entire HR team for your India employees.
7. Faster Time to Market: Hire employees in 7-10 days versus 2-4 months with traditional entity setup. Perfect for foreign companies that need to move fast.
8. Lower Costs for Small Teams: For teams under 20 people, PEO services cost less than setting up your own entity, hiring HR staff, and managing payroll processing and tax compliance yourself.
9. Market Testing Flexibility: Test the Indian market without massive commitment. Hire a few people, see how it goes, and scale up or exit without the headache of shutting down a local business entity.
10. Focus on Core Business Activities: Stop worrying about local employment laws and HR functions. Focus on what you actually do while the EOR handles legal compliance, payroll management, and business operations.

Want to see exactly how much you'll save? Check out our detailed guide on PEO benefits in India where we break down costs, compliance advantages, and real ROI calculations for companies like yours.

Who are the popular PEO/EOR providers for India?[toc=Popular PEO Providers]

Several PEO service providers operate in India, but they're not all built the same.

Here's what you need to know about your options.

Global PEO Providers

Companies like Deel, Remote, and Multiplier offer EOR services across multiple countries, including India. They're good if you're hiring across many countries and want one platform for everything.

The downside? They often lack deep expertise in Indian labor laws and local employment practices. When compliance issues come up, you might not get the specialized support you need.

India-Focused EOR Providers

Then you have providers who specialize in the Indian market. This is where Wisemonk stands out.

Why Wisemonk EOR (International PEO)?[toc=Wisemonk PEO]

Wisemonk isn't trying to be everything to everyone across 150 countries. We focus on doing one thing exceptionally well: helping foreign companies hire employees in India.

Here's what makes us different:

• Deep India Expertise We live and breathe Indian labor laws, tax compliance, and local employment laws. Our team knows the Minimum Wages Act, Maternity Benefit Act, provident fund regulations, and every state-specific requirement inside out.
• Proven Track Record We manage $20M+ in payroll processing for 300+ global companies and support 2,000+ Indian employees. These aren't just numbers. They represent years of handling real compliance challenges and HR operations.
• Fast, Reliable Hiring Process Get your employees onboarded in 7-10 days with complete legal compliance. We handle employment contracts, benefits administration, and regulatory compliance so you can focus on core business activities.
• Transparent Pricing No hidden fees, no surprises. You know exactly what you're paying for payroll management, statutory benefits, and HR services.
• Compliance Assurance We handle tax filing, social security contributions, employee state insurance, professional tax, and everything else required under Indian law. Your compliance risks are covered.

Other local Indian PEO providers exist but many lack the systems and processes that international workers and foreign companies expect.

What Should You Look For?

When choosing PEO services in India, check:

1. Experience with your industry
2. Understanding of local labour laws
3. Quality of benefits administration (health insurance, provident fund, etc.)
4. Speed of hiring process
5. Transparency in employer responsibilities
6. Support for workforce management

The best PEO service providers don't just handle payroll. They become your local partner for ensuring compliance, managing risk management, and helping you succeed in the Indian market.

Ready to hire in India? Wisemonk's EOR service gives you everything you need without the complexity of setting up a legal entity or managing HR functions yourself. Book a Call Now!