Employer of Record (EOR) in India 2026: The complete hiring guide
- Natia Gabarashvili
- Sep 16
- 13 min read
Updated: Sep 26
Table of contents:
Introduction
You’re sitting in a late-night Zoom with your CFO.
The budget spreadsheet’s open, the numbers are bleeding red, and the one line item flashing like a siren? “India payroll setup – TBD.”
Here’s the irony: India has one of the largest, most skilled talent pools in the world, millions of engineers, finance pros, designers, and support staff. Everyone knows it.
Global giants have already built their. Startups scale there. And yet, the minute you decide to hire directly, the country that feels like an opportunity suddenly looks like a maze.
Contracts in English? Not valid.
Payroll taxes? Layered with acronyms you’ve never heard of.
Benefits? Mandatory, scattered, and non-negotiable.
And the antagonist? The endless bureaucracy, forms, filings, legal, and compliance traps that eat up weeks before your first employee even opens their laptop.
That’s where the twist comes in.
While you’re still hunting for a local law firm to translate gratuity obligations, other companies are already onboarding in India, legally, cleanly, and without setting up a single entity. How? Employer of Record (EOR).
An EOR isn’t a workaround. It’s the shortcut that turns India from a compliance headache into a hiring edge. You get the talent. They handle the red tape. And your CFO? They finally get to close that tab marked “TBD.”
India in 2025 isn’t just another hiring option. It’s the market where speed, scale, and structure collide; if you know how to enter it the right way.
India at a glance
Population size: 1.43 billion
Currency: Indian Rupee (INR)
Capital city: New Delhi
Languages spoken: Hindi and English (21 other recognized languages)
GDP: USD 3.73 trillion (nominal)
What is an Employer of Record in India?
Think of an Employer of Record (EOR) as the legal employer your business doesn’t have to become.
When you use an EOR in India, your hires work for your company day-to-day, but legally, they’re employed by the EOR. That partner handles contracts, payroll, taxes, and compliance, while you focus on product, delivery, and growth.
In practice, it works like this:
You: Define the role, select the candidate, and manage the work.
EOR: Issues the compliant employment contract, registers the employee with Indian authorities, runs payroll in INR, files taxes, administers benefits, and makes sure nothing slips through the legal cracks.
No delays with government registrations. No guessing at labor law. No waking up to find your “contractor” reclassified as an employee by Indian authorities.
How EOR differs from other hiring models
Here’s where teams get lost: an EOR isn’t a PEO, a payroll outsourcing agency, or just a contractor platform.
EOR vs. PEO in India
A PEO (Professional Employer Organization) is a co-employment model. You still need a legal entity in India to use one. The PEO runs HR admin, but you remain the official employer.
An EOR requires no entity at all. The EOR is the legal employer on record, fully absorbing payroll and compliance responsibilities.
EOR vs. Outsourcing in India
With outsourcing, you hand over a project to a vendor. They assign people, manage delivery, and keep the IP under their umbrella.
With an EOR, the talent is your team. They sit in your Slack, commit to your repo, and deliver to your roadmap. The EOR just keeps the structure legal.
EOR vs. Contractors in India
Contractors seem flexible, until Indian authorities decide that a full-time, supervised, single-client contractor is actually an employee. That triggers back taxes, penalties, and compliance risks.
With an EOR, your team members are classified correctly from day one. No gray zones. No retroactive liabilities.
Most in-demand roles in India (2026)
India’s hiring market is stacked with talent—but some roles are hotter than others. Here’s a quick look at the most in-demand positions global companies are filling through EOR in India, plus what you can expect to pay.
Software Developers (Frontend, Backend, Full-Stack)
Skills in demand: React, Angular, Node.js, Python, Java, .NET
Why hire: Large pool, international experience, quick integration into product teams
Average monthly salaries:
Junior: ₹60,000 – ₹90,000 (€650 – €1,000)
Mid-level: ₹120,000 – ₹160,000 (€1,300 – €1,750)
Senior: ₹200,000 – ₹280,000 (€2,200 – €3,100)
DevOps & Cloud Engineers
Skills in demand: AWS, Azure, GCP, Kubernetes, Docker, Terraform, CI/CD pipelines
Why hire: Critical for scaling SaaS, fintech, and global infra-heavy teams
Average monthly salaries:
Mid-level: ₹150,000 – ₹200,000 (€1,650 – €2,200)
Senior: ₹250,000 – ₹350,000 (€2,750 – €3,850)
Data Engineers & Analysts
Skills in demand: Python, SQL, Spark, Airflow, ETL pipelines
Why hire: Build scalable data platforms at lower cost than U.S./EU markets
Average monthly salaries:
Mid-level: ₹120,000 – ₹170,000 (€1,300 – €1,900)
Senior: ₹200,000 – ₹300,000 (€2,200 – €3,300)
QA & Test Automation Engineers
Skills in demand: Selenium, Cypress, Playwright, regression and performance testing
Why hire: Strong process orientation, automation-first testing culture
Average monthly salaries:
Junior: ₹70,000 – ₹100,000 (€750 – €1,100)
Mid-level: ₹120,000 – ₹150,000 (€1,300 – €1,650)
Senior: ₹180,000 – ₹250,000 (€2,000 – €2,750)
Mobile Developers
Skills in demand: Flutter, React Native, Swift (iOS), Kotlin (Android)
Why hire: Consumer app expertise, used to high-traffic builds
Average monthly salaries:
Mid-level: ₹120,000 – ₹160,000 (€1,300 – €1,750)
Senior: ₹200,000 – ₹280,000 (€2,200 – €3,100)
Finance & Compliance Professionals
Skills in demand: Payroll, bookkeeping, tax filings, compliance reporting
Why hire: Scale back-office support without U.S./EU overhead
Average monthly salaries:
Mid-level: ₹80,000 – ₹120,000 (€850 – €1,300)
Senior: ₹150,000 – ₹220,000 (€1,650 – €2,400)
Customer Support & Success Teams
Skills in demand: Multilingual support, CRM tools, customer success workflows
Why hire: English fluency, round-the-clock coverage, low attrition
Average monthly salaries:
Junior: ₹40,000 – ₹60,000 (€430 – €650)
Mid-level: ₹70,000 – ₹100,000 (€750 – €1,100)
Senior/Lead: ₹120,000 – ₹160,000 (€1,300 – €1,750)
5 steps to hiring employees in India using an Employer of Record
Hiring in India through an Employer of Record isn’t complicated once you see how the model actually works. At its core, the EOR is the legal employer on paper, while you remain the day-to-day manager. They handle the bureaucracy; you handle the product roadmap.
Here’s what the process looks like when it’s done right:
Step 1: Make the offer
You scope the role, interview candidates, and select the right fit. Once you agree on salary and terms, the EOR takes over.
Step 2: Sign the contract
The EOR issues a locally compliant employment contract in line with Indian labor laws. This is where things often get messy for foreign employers: contracts must meet requirements around probation, termination, Provident Fund (PF), Employee State Insurance (ESI), gratuity, and paid leave. The EOR locks all of this in, including IP protection clauses, so you don’t lose ownership of your code or product.
Step 3: Run payroll & taxes
Once the employee starts, the EOR processes payroll in INR, deducts income tax (TDS), and makes mandatory contributions to PF, ESI, and gratuity where applicable. Payslips are issued locally, and filings are submitted to the Indian authorities on time. You get one clean invoice in USD or EUR.
Step 4: Deliver benefits & ongoing compliance
Indian law requires more than salary. Employees must receive statutory benefits (PF, ESI, gratuity, maternity/paternity leave, holidays), and in many cases, private health insurance to remain competitive. The EOR manages this entire stack, along with ongoing compliance updates when the law changes.
Step 5: Keep it running smoothly
The EOR doesn’t disappear after onboarding. They remain responsible for monthly filings, HR documentation, offboarding, severance, and compliance audits. You keep managing the work; they keep the structure airtight.
What are the benefits of using an Employer of Record in India?
Hiring in India sounds straightforward until you realize that to employ someone legally, you’d normally need to open a local entity. For big corporations planning long-term expansion, that makes sense. But for startups and growth companies that just want to add a few key people? Setting up a subsidiary is overkill.
That’s where an Employer of Record (EOR) becomes the smarter move. An EOR lets you hire Indian employees without opening a local entity, while keeping every hire compliant with Indian labor law. Instead of months of paperwork, you can have a developer or support manager onboarded in weeks.
Here’s what you actually gain by using an EOR in India:
No entity required: You don’t have to register a company, open a bank account, or learn Indian payroll law. The EOR is already set up and acts as the legal employer on paper.
Full onboarding handled: From employment contracts to tax IDs and provident fund registration, the EOR manages every compliance step so your new hire can start quickly.
Payroll, taxes, and social security covered: Monthly payroll in INR, income tax deductions (TDS), provident fund (PF), gratuity, and Employee State Insurance (ESI), all handled and filed correctly. You just pay one invoice.
Benefits administration: Legally mandated benefits, plus competitive add-ons like health insurance or learning allowances, are structured through the EOR so you don’t lose candidates to local employers.
Visa and work permit support: If you’re relocating talent or hiring a foreign national in India, the EOR ensures their immigration paperwork holds up under Indian law.
Contractor management: If you need flexibility, an EOR can engage contractors compliantly, avoiding misclassification risks that often come with full-time contractors.
Clean exits: Offboarding is legally tricky in India, with notice periods, severance, and gratuity obligations. The EOR ensures employee termination is handled without exposure.
Equity and stock options: For startups, distributing ESOPs to employees abroad is a compliance nightmare. An EOR can structure stock option grants cleanly for Indian hires.
The benefit isn’t just compliance, it’s focus. Instead of wrestling with labor law and government filings, you spend your time building a relationship with your new team members and scaling your business.
How much does it cost to use an EOR in India?
Let’s get straight to the number. Team Up charges €199 per employee, per month for full Employer of Record (EOR) coverage in India. That’s it. No setup fees, no hidden line items buried in the fine print.
Now, here’s what that really means.
Hiring directly in India isn’t just about paying a salary in INR. You’re also responsible for:
Payroll taxes (TDS, PF, ESI, gratuity contributions)
Monthly filings with Indian tax and labor authorities
Benefits administration (health coverage, paid leave, statutory perks)
Contracts written and enforceable under Indian labor law
Currency conversion and disbursement to your employee’s account
Severance and offboarding when it’s time to part ways
Miss a step and you’re looking at penalties, back taxes, or even disputes over intellectual property ownership. That’s the part most CFOs dread.
With an EOR, all of that gets rolled into one predictable monthly cost:
Employee’s gross salary (you set this, based on market benchmarks)
Statutory taxes and contributions (calculated and filed by us)
Team Up’s flat fee: €199 per month, per person
Why the Flat Fee Matters
Many global providers charge a percentage of salary, usually 10–15%. That might not sound like much, until you realize you’re paying hundreds extra every month just because you hired a senior engineer instead of a junior. Team Up’s flat rate keeps your costs predictable and fair, no matter the role or seniority.
Example Breakdown: Mid-Level Software Engineer in India
Gross salary: ₹180,000 / month (~€1,950)
Employer contributions (PF, gratuity, etc.): ~€250
Team Up EOR fee: €199
Total monthly cost: ~€2,399
That’s a fully compliant, legally employed team member in India with every tax filed, every benefit covered, and zero risk on your balance sheet.
How does an Employer of Record in India help you run Payroll & Taxes?
Indian payroll has more moving parts than most global employers realize. It’s not just a base salary; it’s basic pay, HRA (house rent allowance), special allowances, professional tax (state-level), and deductions for PF/ESI.
Payslips must be issued monthly in INR.
Employers must file returns on time with the Employees’ Provident Fund Organisation (EPFO) and Employees’ State Insurance Corporation (ESIC).
Salary structures must meet minimum wage laws, which vary by state and job category.
An Indian EOR sets up compliant salary structures and ensures every component is handled correctly.
Employer costs in India
When you employ staff in India, here’s what shows up on your side of the ledger:
Provident Fund (PF): 12% of basic wages. Example: on ₹50,000/month (€550 / $600), your share is ₹6,000/month (€66 / $72).
Employee State Insurance (ESI): 3.25% of wages if salary ≤ ₹21,000/month (€230 / $250). That’s up to ₹683/month (€7.5 / $8.2).
Gratuity provision: 4.8% of basic wages. On ₹50,000/month (€550 / $600), budget ₹2,400/month (€26 / $29).
Bonus: 8.33%–20% of annual wages for employees earning ≤ ₹21,000/month (~€230 / $250). Minimum annual bonus: ₹21,000 (€230 / $250).
Professional Tax: State-specific, capped at around ₹2,500/year (~€28 / $30).
Employee costs in India
Employees also chip in — and their payslips reflect deductions every month:
PF contribution: 12% of basic wages. On ₹50,000/month (€550 / $600), that’s ₹6,000 (€66 / $72).
ESI contribution: 0.75% (if wages ≤ ₹21,000/month). That’s up to ₹158/month (~€1.8 / $1.9).
Income Tax (New Regime, incl. 4% cess):
Up to ₹3,00,000 (~€3,300 / $3,600) → 0%
₹3,00,001–6,00,000 (~€6,600 / $7,200) → 5%
₹6,00,001–9,00,000 (~€9,900 / $10,800) → 10%
₹9,00,001–12,00,000 (~€13,200 / $14,400) → 15%
₹12,00,001–15,00,000 (~€16,500 / $18,000) → 20%
Above ₹15,00,000 (~€16,500+ / $18,000+) → 30%
Taxes in India
Every employer is responsible for withholding:
TDS (Tax Deducted at Source) on salaries (progressive up to 30%).
Provident Fund (12% of basic pay) – mandatory for employees earning under ₹15,000 basic pay, but widely applied even above.
Employee State Insurance (4% combined employer + employee) – required for employees earning under ₹21,000/month.
Gratuity – payable after five years of continuous service.
Professional Tax – levied in states like Maharashtra, Karnataka, and West Bengal.
How does an India EOR help you calculate taxes?
EOR providers in India act as the official employer, meaning they are responsible for:
Registering employees with the Income Tax Department, EPFO, and ESIC.
Deducting and depositing TDS, PF, and ESI contributions monthly.
Filing quarterly and annual returns (Form 24Q, PF/ESI challans).
Issuing Form 16 to employees for tax filing.
Without an EOR, you’d need an Indian finance and HR team just to manage compliance.
What are the common employee benefits in India?
Beyond salary, Indian employees expect (and in many cases are legally entitled to):
Provident Fund (PF)
Employee State Insurance (ESI)
Gratuity after five years
Maternity leave (26 weeks) and paternity leave (employer policy-driven)
Festival bonuses and Diwali/annual performance bonuses (customary in many sectors)
Health insurance (private cover is increasingly expected, though not always statutory)
How does an Indian Employer of Record help you administer benefits?
The EOR handles all statutory enrollments, registering employees under PF/ESI, tracking gratuity accruals, and ensuring maternity/paternity leave is properly administered. They also help structure competitive add-ons like private health insurance or learning allowances, so your offers align with Indian market expectations.
Leave Entitlements in India
Employees in India are entitled to:
Casual Leave: usually 6–12 days/year.
Earned/Privilege Leave: 15–20 days/year (varies by state law and company policy).
Sick Leave: 12 days/year in most states.
National Holidays: Independence Day, Republic Day, Gandhi Jayanti (mandatory nationwide).
State Holidays: Vary, e.g., Pongal in Tamil Nadu, Ganesh Chaturthi in Maharashtra.
How does an Employer of Record in India help you manage leave and PTO?
EOR provider in India builds these entitlements into employment contracts and payroll. They track accrual, carry-forward, and encashment of leave balances, which is a legal requirement under the Shops & Establishments Acts in each state.
Key definitions under the Shops and Establishments Act
Shops: Any premises where goods are sold (retail or wholesale) or services are provided. This includes offices, godowns, storerooms, and warehouses attached to the business.
Commercial Establishments: Workplaces engaged in commercial, trading, banking, or insurance activities. It also covers hotels, boarding houses, restaurants, cafes, theaters, and other entertainment venues.
Factories and large industries are not covered here; they’re regulated separately under the Factories Act, 1948, and the Industries (Development and Regulation) Act, 1951.
How an EOR in India Fits In
For foreign companies, the complexity multiplies. Each state has its own Shops and Establishments Act, registration process, and enforcement style. If you hire directly, you must register your business locally and keep up with all these obligations.
An Employer of Record (EOR) shields you from this. As the legal employer on paper, the EOR:
Registers under the appropriate state’s Shops and Establishments Act.
Issues with locally compliant employment contracts.
Runs payroll in INR, deducts TDS, and manages PF/ESI filings.
Tracks working hours, leave, and benefits in line with state labor law.
Handles clean terminations with proper notice and settlements.
You get compliant employees without having to set up a local entity or navigate the patchwork of Indian state regulations.
Terminations in India
Termination in India is highly regulated:
Notice periods: Typically 30–90 days, depending on role and tenure.
Severance: Required under the Industrial Disputes Act for certain categories.
Gratuity payout: If service is 5+ years.
Final settlement: Includes unpaid wages, encashed leave, PF, gratuity, and bonus, where applicable.
Mishandle any of this, and you’re exposed to disputes before the Labour Commissioner.
How do EOR services in India help you process terminations?
The EOR ensures:
Notice and severance terms align with Indian law.
Gratuity and PF balances are paid out.
Proper exit documentation is issued (relieving letters, experience certificates).
Employee disputes are avoided with clean settlements.
Why choose Team Up as your best Employer of Record in India?
There’s no shortage of global platforms promising to “handle” EOR. Most will dazzle you with dashboards, then quietly outsource your Indian hires to a third-party vendor you’ll never meet. That’s not Team Up.
Here’s what makes us different, and why companies scaling into India in 2025 choose us as their EOR partner:
Flat, transparent pricing: Team Up charges €199 per employee, per month. No percentage-based markups. No surprises when you decide to hire senior engineers instead of juniors. Predictable costs make your CFO breathe easier.
Contracts that actually hold up in India: Every employment contract is drafted in line with Indian labor law, bilingual where required, and includes enforceable IP protection. You own the work product. Full stop.
Payroll and taxes done right: Monthly payroll in INR, TDS deductions, PF/ESI contributions, gratuity tracking, Form 16 issuance—handled by us, filed on time, and backed by real Indian compliance experts.
Employee experience that reflects your brand: Your hires in India aren’t treated like “outsourced resources.” They get a clean onboarding process, compliant benefits, health insurance where expected, and HR support when needed. They feel like your team, because they are.
Risk-free terminations: Offboarding in India is tricky. Notice periods, gratuity settlements, and final settlements must be airtight. We handle the process end-to-end, ensuring your exits are compliant and dispute-free.
Scalable across roles and regions: Whether you’re hiring three developers in Bangalore, a finance lead in Mumbai, or a support team in Hyderabad, Team Up scales with you. One partner, one system, one monthly invoice.
Hiring in India is a growth opportunity, but only if you get the structure right. With Team Up as your Employer of Record, you gain speed, compliance, and predictability without the distraction of setting up a legal entity or decoding Indian labor law.
You focus on building your team. We handle everything else.
Conclusion
India in 2025 is one of the most powerful hiring markets in the world. The talent pool is deep, costs are competitive, and the time zone works. The only catch? Getting the legal and compliance side wrong can wipe out the very savings and speed you came for.
That’s where Team Up steps in. As your Employer of Record in India, we handle the registrations, payroll, taxes, benefits, contracts, and exits, while you stay focused on building and scaling your team. No entities. No back-office headaches. No compliance landmines. Just one monthly invoice and a fully legal, fully integrated workforce in India.
If you’re ready to grow in India without the risk or the bureaucracy, we’re ready to help.
Talk to Team Up today about hiring in India through our EOR model, and start building your team in weeks, not months.
