Does an EOR in India handle statutory benefits like Provident Fund, ESI, and gratuity for employees?
Yes. An Employer of Record in India fully manages all statutory benefits required under Indian labor law, including Provident Fund, Employee State Insurance, and gratuity. The EOR becomes the legal employer responsible for registering employees, making monthly contributions, managing filings, and ensuring benefits are administered correctly.
Based on our extensive experience supporting US teams hiring in India, statutory benefits are the area where foreign companies face the highest compliance risk. That is why EORs take over the entire responsibility end to end.
How does an EOR handle Provident Fund (PF) compliance?[toc=PF & Compliance]
From our experience as a leading Employer of Record service provider in India, our payroll audits show that PF is the most miscalculated employer obligation when foreign companies try to hire directly in India.
The Provident Fund is India’s retirement savings program and works similarly to the US Social Security. An EOR ensures compliance by:
• Registering employees under PF where applicable
• Calculating employer and employee contributions
• Depositing PF contributions on time each month
• Filing monthly PF returns
• Maintaining employee PF records
• Managing transfers if employees move between employers
Explore salary calculator tool Salary Calculator India 2025: CTC to In-Hand Pay
How an EOR manages Employee State Insurance (ESI)?[toc=ESI Management]
We often observe that foreign companies are unaware that ESI is mandatory for eligible salary brackets and is tightly regulated.
ESI functions like a state administered health insurance for employees below a certain wage threshold.
An EOR ensures correct compliance by:
• Checking employee eligibility based on wages
• Registering eligible employees under ESI
• Calculating contributions as per ESI rules
• Managing monthly filings
• Maintaining ESI records and number assignments
• Handling ESI benefits and claims support
This prevents penalties for misclassification or missed contributions.
“Working with the Wisemonk team in India has been a genuinely positive experience from day one. They've been consistently accessible and are building fantastic relationships with our local team. I value the quality of compliance Wisemonk brings. I have full confidence when it comes to financial, legal, and HR matters.”
- Lisa Jones, Chief People Officer at Couch Health
How does an EOR administer gratuity?[toc=Gratuity Management]
Gratuity is a mandatory end-of-service benefit payable after five years of continuous service.
An EOR ensures compliance by:
• Tracking employee tenure
• Maintaining records for gratuity eligibility
• Calculating gratuity payouts accurately
• Processing gratuity payment at exit
• Meeting all timelines defined under the Payment of Gratuity Act
A compliant EOR removes the risk of underpayments, delayed payments, or disputes.
Explore the online gratuity calculator in India here , Online Gratuity Calculator India 2025.
How does an EOR manage all statutory benefits holistically?[toc=Statutory Benefits Management]
State variations and regulatory updates create significant complexity that an EOR simplifies for foreign companies. In addition to PF, ESI, and gratuity, an EOR also handles:
• Professional Tax
• Maternity benefits
• State holidays
• Minimum wage updates
• Mandatory leaves
• Health insurance and supplemental benefits
• Full and final settlements
• Statutory registers and filings
This creates a single compliant employment experience without requiring the foreign company to track Indian labor laws.
Here are examples of companies describing how using an Employer of Record helped them scale teams compliantly:
“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 and major B2B SaaS brands. They are a great partner providing integrated services for EOR and recruitment.”
- Saurabh Sharma, Chief Marketing Officer at Onereach
“I highly recommend them. Wisemonk helped us tap into the vibrant and top-notch Indian talent market and hire our first couple of founding engineers in record time. We've been able to accelerate our roadmap and deliver terrific value to our customers thanks to Wisemonk's efforts.”
- Krishna Ramachandran, Co-founder at Onform
Why foreign companies rely on EORs for statutory benefits compliance?[toc=Benefits Compliance]
(Based on our work with hundreds of US companies, statutory benefits compliance is the number one area where EORs add immediate value.)
An EOR protects foreign companies from:
• Incorrect PF calculations
• Missed ESI enrollment
• Delayed or incorrect gratuity payouts
• State level noncompliance
• Penalties and employee claims
• Permanent Establishment risk tied to payroll errors
An EOR ensures that every statutory benefit is delivered exactly as required by Indian labor law.
Why companies trust Wisemonk to manage statutory benefits in India?[toc=How Wisemonk Helps]
Wisemonk is an India specialist EOR trusted by global teams to manage PF, ESI, gratuity, Professional Tax, and all statutory obligations. We help US companies hire in two to four days while ensuring complete compliance with Indian payroll and benefits laws. Need help with your global expansion in India? Contact our team to learn how we can support your global operations.