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Co-founder & Editor
The route you pick decides who runs payroll, who holds the registrations, and who pays if a hire is reclassified later.
| Option | Own entity | Employer of record | Independent contractor | Staffing contractor |
|---|---|---|---|---|
| Setup time | 2 to 4 weeks | 2 to 5 working days | Same day | 1 to 2 weeks |
| Upfront cost | MCA fees, plus a resident director | None, or 1 to 2 months deposit | None | None |
| Ongoing cost | Contributions, payroll, audit, ROC filings | Monthly fee per employee | Invoice value, TDS at source | Wages plus contractor margin |
| Legal employer | Your Indian company | The provider's Indian entity | Nobody, the person is self-employed | The contractor, you are principal employer |
| Reclassification exposure | Low | Low | High | Medium |
| Best for | A long-term base or 15 plus hires | First hires and teams of 1 to 20 | Independent specialists on defined deliverables | Site-based or high-turnover roles |
The rules below changed on 21 November 2025 when the four labour codes came into force, and the first group is where existing payroll practice most often breaks.
Employer statutory cost in India falls as salary rises, because both social security schemes are capped and one of them stops entirely above ₹21,000 gross.
Earned leave accrues by days worked rather than as a fixed annual allowance, and the state layer sits on top of the central one for casual leave, sick leave and holidays.
OSH Code, 2020 section 32. Code on Social Security, 2020. Full maternity and paternity rules are set out in the India maternity and paternity leave guide. Statutory bonus is not listed because the eligibility threshold and calculation base under the Code on Wages await notification.
India is not an at-will jurisdiction, and what you owe depends less on tenure than on whether the person counts as a worker, which most senior hires do not.
Industrial Relations Code, 2020 sections 70, 77, 79 and 83, in force 21 November 2025. State thresholds are 3 months of continuous service in Delhi and 6 months in Karnataka, Tamil Nadu and Telangana. In Karnataka, Tamil Nadu and Telangana an employee past that threshold can only be dismissed for reasonable cause, so notice alone does not make a termination lawful. Telangana adds service compensation of 15 days average wages per year after one year. A fixed-term employee needs no notice on expiry of the term but takes pro rata gratuity after one year. All dues are payable within 2 working days of the exit date.
A first India hire through an employer of record typically runs from decision to first payroll in two to four weeks.
Entity or employer of record, decided on headcount plan and IP ownership rather than on cost alone. Incorporation runs 2 to 4 weeks before registrations begin.
Week 1Set wages at 50% of gross so the package survives the Code on Wages definition, and agree whether provident fund is contributed on the ₹15,000 ceiling or on full wages.
Week 1Mandatory for every employee in the prescribed format, covering designation, wages and social security details. Fix the notice period here.
Week 2PAN, Aadhaar linkage, bank details, UAN generation, and ESI enrolment within 10 days of joining. Running your own entity, add EPFO, ESIC, professional tax and shops and establishments registration.
Week 3Salary is due by the 7th of the following month, with provident fund and ESI remittances due by the 15th.
Week 4Five providers we have reviewed that employ in India. Full scoring and the ranked list sit on the India EOR page.
MultiplierSingapore-based platform employing through entities it owns across most markets, with India among its deepest.
RemoFirstLowest published rate of the five, running mostly through partner entities rather than its own.
PeblFormerly Velocity Global. Handles immigration in-house and requires a security deposit at contract start.
DeelWidest integration library of the five, employing through a mix of owned and partner entities.Provider scoring, pricing detail and the ranked list for India sit on the country EOR page, updated as rates change.
See the India EOR page
The seven below are the ones where published guidance is most often out of date or wrong.
Yes. All four codes came into force on 21 November 2025 and the central rules were notified on 8 May 2026. State rules are arriving on their own timelines, so registration steps, weekly rest and some leave rules still differ by state. The codes themselves are binding everywhere.
No, and this is the most repeated error in published guidance. The Code on Wages defines wages as basic pay plus dearness allowance plus retaining allowance. Where the excluded components exceed 50% of all remuneration, the excess is added back into wages for calculating provident fund, gratuity and bonus. It is a reclassification rule, not a mandate on how you structure salary.
Between 3% and 12% of gross at statutory minimums, falling as salary rises. Provident fund is capped at ₹15,000 of monthly wages and state insurance stops entirely above ₹21,000 gross, so a junior hire carries roughly four times the percentage load of a senior one. Employers who contribute provident fund on full wages rather than the ceiling land nearer 9% at senior salaries.
It depends on whether the person is a worker under the Industrial Relations Code, which most managerial and supervisory hires are not. Workers with a year of service get one month plus severance. Everyone else is governed by the contract and the state shops and establishments act, which typically requires 30 days after a qualifying period. In Karnataka, Tamil Nadu and Telangana that act also requires reasonable cause, so notice alone does not make a dismissal lawful.
After five years of continuous service for permanent employees, at 15 days of wages per completed year. Fixed-term employees qualify pro rata after one year. Whether service across renewed fixed-term contracts aggregates toward that year is not settled.
Within two working days of the exit date, under section 17 of the Code on Wages. This replaced a market norm of 30 to 45 days and applies to resignation, dismissal and retrenchment alike. Practitioners disagree over whether the two day clock covers the entire settlement or only wages proper, so build your offboarding process around the shorter reading.
Usually not. The employment visa must be sponsored by the entity that employs the person, and most providers restrict their India service to people who already hold the right to work. The visa also requires a gross annual package above the Ministry of Home Affairs threshold, currently stated as USD 25,000. Confirm sponsorship before building a relocation into a hiring plan.
