Article
12 min read
How to Hire Using an Employer of Record (EOR) in India (2025)
Employer of record

Author
Jemima Owen-Jones
Last Update
June 27, 2025

Table of Contents
What is an Employer of Record in India?
Top reasons to use an Employer of Record in India
How to hire in India: Step-by-step guide
Employment compliance tasks an Employer of Record manages in India
How much does it cost to hire through an Employer of Record in India?
Which India Employer of Record should you choose?
Is Deel Employer of Record a strong choice for hiring in India?
Hire employees in India effortlessly with Deel Employer of Record
Key takeaways
- Setting up an India entity to hire local talent can take months and cost over ₹3,249,316 in initial legal, tax, and payroll setup.
- An India Employer of Record lets you engage talent through its local entity, bypassing setup delays, legal costs, and compliance headaches.
- Deel EOR owns its Indian entity for full control, supports hiring in India and 150+ other countries, offers transparent pricing, monitors compliance in real time, and has top G2 ratings.
Hiring in India unlocks access to deep engineering and customer-support talent pools, cost advantages, and a 900-million-strong working-age population. Yet those rewards come with exacting rules: mandatory Provident Fund, state-based minimum wage, detailed employment contracts, health insurance requirements, and new data-localization demands. Even seasoned global HR teams can stumble on India’s patchwork of central, state, and sector-specific labor laws.
That’s where an Employer of Record (EOR) shines. By becoming the legal employer, an EOR shoulders statutory registrations, payroll taxes, benefits administration, and Indian labor law liability while you retain day-to-day control of the work.
Deel EO R’s India entity layers on intuitive workflows, AI-powered workforce planning, and real-time compliance alerts, so you can legally employ full-time employees and scale in India with confidence and speed.
See also: What’s the Fastest Way to Enter Markets and Hire Globally?
What is an Employer of Record in India?
An Employer of Record in India is a locally incorporated company that legally employs your workers on your behalf while you manage them day-to-day. The EOR:
- Signs the employment contract under Indian law
- Registers and remits statutory contributions such as Provident Fund (12%) and Employees’ State Insurance (0.75%)
- Calculates and withholds monthly tax deducted at source (TDS) under the Income-tax Act 1961
- Assumes liability for wrongful dismissal, payroll errors, and benefits shortfalls
- Administers statutory benefits like health insurance and maternity leave
Meanwhile, you direct projects, set goals, and integrate the employee into your culture. Deel EOR combines that legal buffer with team management tools and resources—compensation benchmarking, IT asset deployment, and Deel Engage—for a seamless hiring experience in India.
Deel Employer of Record
Top reasons to use an Employer of Record in India
Global companies leverage EORs because they can tap India’s talent without navigating registrations or setting up local entities. Key benefits of Employer of Record services in India include:
- Zero-day market entry: Deel EOR’s India entity lets you issue compliant offer letters within 48 hours, while setting up your own local entity can take many months to incorporate and register for GST, TAN, and EPFO
- Cost transparency: India’s employer costs—Provident Fund, ESI, gratuity, statutory bonus, health insurance—add up fast. Deel EOR itemizes each contribution up front so budget owners aren’t blindsided
- Contract peace of mind: Written employment contracts are mandatory and must outline probation (max six months), notice, and IP clauses. Deel’s contract generator autofills state-specific clauses in seconds
- Always-on payroll compliance: Miss a TDS filing, and penalties start at INR 200 per day. Deel’s payroll engine auto-files returns, ensuring compliance with local labor laws and cutting risk to near zero
- Data-localization solved: Sensitive personal data must stay on Indian servers under the Personal Data Protection Bill 2023. Deel hosts payroll data in-country and offers IP Guard to assign inventions to you automatically
- Misclassification defense: Indian courts have reclassified contractors as full-time employees and ordered back-pay plus benefits. Using an EOR secures employee status from day one and eliminates misclassification risk
…Deel’s all-in-one solution transformed our hiring and payroll processes into a seamless experience. With Deel, we've been able to grow globally with unprecedented confidence and efficiency.
—Ajey Hare Prasath,
Director of Global HR, Pixis.
How to hire in India: Step-by-step guide
Use this eight-step checklist to hire a great Indian as a fully compliant employee through Deel’s Employer of Record services.
1. Choose an EOR with a wholly-owned India entity
Start by confirming that the EOR directly owns a local entity in India. Ownership ensures the EOR can directly sign employment contracts, pay statutory benefits, and store data locally without relying on third-party aggregators. Deel EOR operates its own legal entity registered in Bengaluru, giving you end-to-end control and audit trails.
Tip: Ask for the Corporate Identification Number (CIN) to validate legal presence on the Ministry of Corporate Affairs portal.
2. Book a demo and verify social proof
Next, book a live walkthrough. During the demo, check how the platform handles Provident Fund numbers, multi-state minimum wage, and variable bonus calculations under the Payment of Bonus Act. Scan case studies from peers expanding in Hyderabad or Chennai to ensure industry fit.
Tip: Look for 4.8-plus G2 ratings and Trustpilot reviews; Deel EOR boasts top marks for its user-friendly platform and customer support.
3. Request a transparent EOR quote
A solid quote breaks costs into gross salary, statutory on-costs (PF, ESI, gratuity, bonus), and a flat management fee. Deel’s quoting tool leverages real-time tax tables and shows the total “cost to company,” India’s budgeting gold standard.
Tip: Compare costs before you expand—read our article EOR vs. Entity Costs: What’s More Affordable?
4. Submit a 12–24-month hiring plan
Share your headcount forecast so the EOR can pre-register additional Professional Tax locations or scale employee benefits packages.
Tip: Deel’s AI-driven workforce planning software helps you adjust plans in real time, enhancing cost-effectiveness.
5. Create the employment contract in the platform
Indian labor laws demand written employment contracts with job title, duties, place of work, salary breakdown, probation, leave entitlements, and notice period. Deel’s contract generator ensures your contract is up-to-date with the latest labor laws and regulations. Once approved, Deel’s in-country experts review the contract.
Tip: Within the platform, select India from the country list, toggle “IP assignment,” and set probation (0–6 months). The system auto-inserts the Shops and Establishments Act citation for the employee’s state.
6. Confirm the candidate’s right to work
Indian nationals need only a Permanent Account Number (PAN). Foreign nationals require an Employment Visa and FRRO registration.
Tip: Use Deel Immigration services for visa and work permit support if hiring foreign nationals.
7. Run the onboarding workflow
Kick off background checks, upload KYC docs, and digitally sign the PF enrollment (Form 11). Deel EOR files the employee’s ESI Form 1 and generates the Universal Account Number within 24 hours.
Tip: Use Deel Engage to roll out training and performance goals, and Deel IT to provision equipment.
8. Maintain ongoing compliance
Each month, Deel’s payroll engine withholds TDS, uploads the PF-Electronic Challan Cum Return, and files Employees State Insurance contributions by the 15th. The Compliance Hub pushes alerts if legislation, like Karnataka’s latest Shops Act amendments, changes rules on leave entitlements or working hours.
Tip: Subscribe to Deel’s compliance newsletter to receive clear and concise summaries of relevant compliance changes.
Platform Tour
Employment compliance tasks an Employer of Record manages in India
Below is an overview of the core compliance areas your Employer of Record services provider will cover for hiring employees in India:
Category | Key Requirements (2025) |
---|---|
Statutory Employer Costs | In India, EOR employer costs include EPF contributions (12% of basic salary or fixed INR 1,800), a 0.5% EPF admin fee, and INR 75 for mandatory life insurance. Karnataka requires a Labour Welfare Fund fee of INR 100 annually. Optional costs include gratuity (after 5 years), ESI (3.25% for eligible low earners), and a statutory bonus (8.33–20% for eligible employees). Deel recommends accruing two months’ salary over three years for severance. |
Employment Contracts & Probation Rules | Employment contracts in India must be bilingual or in English, signed by both parties, and cannot be backdated. Fixed-term contracts are allowed for temporary roles, with a 3-month minimum and no legal maximum. Probation is allowed up to 6 months. Contracts end automatically unless terminated early with notice. Gratuity and leave encashment apply based on tenure. Non-compete clauses apply during employment; non-solicitation clauses apply both during and after, with legal remedies for breach. |
Pay and Working Hours | In India, minimum wages vary by state, job type, and skill level, with over 2,000 defined roles. Wages include a variable dearness allowance to adjust for inflation. Working hours are typically 9 hours per day (plus 1 hour rest) and 48 hours per week, Monday to Friday. Overtime is legally paid at twice the regular rate, but enforcement is limited for white-collar workers. While contracts may waive overtime pay, the legal obligation remains. Employers who choose to pay overtime can do so as an allowance. |
Payroll & PAYE Compliance | India follows a monthly payroll cycle from the 1st to the last day, with salaries paid on the last day and a cut-off on the 20th. Net pay equals gross earnings minus taxes and statutory deductions. Gross pay includes basic salary, allowances, and bonuses. Statutory deductions include 12% Provident Fund, 0.75% Employee State Insurance (for those earning under INR 21,000), and INR 20 for the Labour Welfare Fund (annual). Income tax is based on annual earnings and the chosen tax regime. Payslips include detailed earnings (e.g., HRA, bonuses, allowances) and deductions (e.g., PF, tax). |
Vacation and Public Holiday Allowances | Holiday entitlements in India vary by state. In Karnataka, for example, employees accrue 18 vacation days annually (1.5 days/month), with unused leave carrying forward up to 30 days. They receive 5 national holidays plus 5 regional holidays, which require manager approval. Working on a holiday earns 200% pay or a day off, and holidays falling on weekends are not replaced. |
Income Taxes | India’s progressive tax system offers two regimes: New (fewer deductions) and Old (more exemptions). Taxes on salary, bonuses, and allowances are withheld monthly and remitted by the 7th of the next month. The tax year runs from April 1 to March 31, with returns due by 31 July. Rates range from 0% to 30%, varying by income and age. Employers issue Form 16 annually for filing. Employees should declare prior income during onboarding or via support to ensure correct tax deductions. |
Expenses, Allowances, and Bonuses | Expenses reimbursed must relate directly to business activities and be approved with proper documentation before the payroll cut-off. Common non-taxable expenses include phone, internet, coworking, travel, office supplies, and training, while some allowances, like mileage and recurring medical costs, are taxable. Per diems are not offered; all expenses require submission for approval. Allowances such as work-from-home or gym are discretionary and taxable. Bonuses are taxed as regular income and withheld at source based on the employee’s annual taxable income and chosen tax regime. |
Statutory Benefits & Pension Requirements | India’s statutory benefits include a 12.5% Provident Fund contribution based on basic salary or INR 15,000 plus INR 75, and a Labour Welfare Fund of INR 100 annually per employee. Employee State Insurance applies at 3.25% employer and 0.75% employee rates for workers earning under INR 21,000 monthly. Optional benefits include the National Pension Scheme (NPS), private health insurance, life insurance, and business travel insurance, which employers may offer but must apply equally to all eligible employees. |
Maternity, Paternity, Parental, Adoption & Foster Leave | India provides up to 26 weeks of fully paid maternity leave for mothers with fewer than two children and 12 weeks for more, including an extra month for pregnancy-related illness. Adoptive and surrogate mothers are eligible for 12 weeks. Employees must notify their employers two months in advance and submit leave requests. Paternity leave is not mandatory but commonly offered as 15 days of paid leave, with employer discretion on eligibility and payment, requiring two months’ notice. |
Sick Leave, Bereavement Leave, and Carer’s Leave | Employees in India receive 12 days of paid sick and casual leave combined each year, with no carryover. A medical certificate is required for sick leave longer than 3 days. Sick leave cannot usually be requested in advance, except for scheduled procedures. Casual leave covers unforeseen personal matters and must be requested as personal leave. Bereavement leave is not legally required but is commonly offered as three paid days for the death of close relatives, with proof typically required. |
Terminations/Dismissals, Redundancy, Severance, and Resignations | Terminations in India require at least one month’s notice, with payment in lieu and garden leave allowed. Severance pay equals 15 days’ average wage per year for employees with over one year of service. Employers often offer 1-3 months’ extra pay to secure mutual agreements. Benefits, accrued leave, and gratuity (after 4+ years) must be paid. Misconduct terminations need a fair disciplinary process. Five legal termination methods exist. |
Misclassification Risk | Misclassification Risk in India is high due to courts favoring employees. Key factors include employer control, payment method, contract terms, provision of tools, exclusivity, length of service, benefits, and disciplinary rights. Indicators of employee status are direct supervision, economic dependence, lack of financial risk, and regular contract renewal. Misclassification can lead to back pay, fines, legal liabilities, and reputational damage. Employers must carefully assess worker status to avoid these risks. |
Data & IP Protection | Data privacy in Indian workplaces protects employee information and requires clear consent, limited data use, strong security, and breach plans. Key laws include the Digital Personal Data Protection Act 2023 and the IT Act 2000. Best practices are clear policies, training, secure storage, audits, and global compliance. Staying updated builds trust and reduces legal risk. |
Continuous Compliance™
How much does it cost to hire through an Employer of Record in India?
EOR pricing for hiring employees in India breaks into three buckets:
- Employee’s gross salary: Market-based, typically expressed as Cost to Company (CTC).
- Mandatory statutory employer costs: Provident Fund, Employees State Insurance (ESI), gratuity, statutory bonus, plus surcharges like Professional Tax (state-capped at INR 2,500/year).
- EOR management fee: Deel EOR charges a flat, all-inclusive monthly amount, delivering payroll, compliance, health insurance, and local-entity use.
Factor | Your Own India Entity | Deel EOR |
---|---|---|
One-off setup costs (company incorporation, EPFO, ESIC, GST registrations, legal drafting) | ₹3,249,316 | ₹0 |
Annual, recurring costs (in-house payroll team, audits, labor law counsel) | ₹3,503,416 | ₹0 |
Deel EOR annual management fee | ₹0 | ₹616,012 per employee |
Estimated total annual cost | ₹6,752,732 | ₹616,012 |
Time to first hire | 2 months | 1 business day(s) |
Deel’s transparent fees mean no surprise surcharges for multi-state compliance, employee benefits, or year-end filings.
Check our Employee Cost Calculator to see the full cost of hiring talent in India, including salary, taxes, pensions, and statutory fees.
Global Hiring Toolkit
Which India Employer of Record should you choose?
Evaluate Employer of Record services providers against four must-haves:
- Entity ownership: Choose an EOR with a wholly owned entity in India. Local ownership improves compliance, ensures greater control, and avoids intermediary fees.
- Compliance expertise: Check for in-house labor lawyers and a track record of zero payroll penalties. Deel’s Compliance Hub monitors 180+ regulatory data points daily to ensure compliance with Indian labor laws.
- Platform breadth: Beyond hiring and payroll, look for an EOR provider that offers background checks, visa services, device management, and administration of statutory benefits.
- Global coverage: If India is part of a broader APAC strategy, select an EOR with reach in 150+ countries so you can scale on one contract.
See also: Owned Entity vs. In-Country Partner: The Best Choice for Global Hiring
Discover how Cake saved +$3k per hire in compliance costs with Deel
Cake is on a mission to simplify employee equity plans through its comprehensive platform, so worldwide companies can distribute equity options among employees in minutes.
However, getting boots on the ground in strategic regions and hiring globally can be expensive, time-consuming, and fraught with risk. Cake needed a plug-and-play solution that could help it achieve its global hiring ambitions with the least amount of administration possible.
With Deel EOR, Cake quickly hired key roles across the world, with a particular focus on having a US presence.
"Deel ensures cost-effective global hiring, providing confidence in compliance, especially in the complex landscape of US employment laws." —Charlie Ross, Chief Operating Officer at Cake
Is Deel Employer of Record a strong choice for hiring in India?
Yes—Deel stands out as a top Employer of Record solution for hiring employees in India. Deel EOR’s wholly-owned Indian entity, deep compliance expertise, and transparent pricing make it the go-to choice for global teams looking to legally employ talent and avoid the pain, delays, and expense of setting up their own local entity.
With Deel EOR, you benefit from:
- G2 leader: Rated best Employer of Record based on the highest user satisfaction and largest market presence
- 150+ countries: Instantly hire and pay full-time employees or contractors across the globe, including India
- Wholly-owned entity in India: Deel’s direct local presence means faster onboarding and full control—no third-party middlemen
- Transparent pricing: Flat, all-inclusive monthly fees with no hidden costs or multi-state surcharges
- Instant compliance: Deel EOR handles all statutory employer costs—Provident Fund, Employees State Insurance, gratuity, and bonus—so you stay audit-proof
- Speed to hire: Onboard in days, not months; entity setup can take months and cost ₹3,249,316
- Data localization & IP guard: Payroll data stored in India; IP assignment built into employment contracts
- Real-time compliance monitoring: Deel Compliance Monitor tracks 180+ regulatory updates so you never miss a rule change in Indian labor laws
- End-to-end HR tools: Compensation benchmarking, background checks, visa support, and device deployment are all bundled
- Proven results: Thousands of businesses trust Deel’s India platform for reliable, hassle-free hiring
With Deel, you can focus on scaling your India team while skipping the paperwork and regulatory headaches. Let’s explore how Deel streamlines your hiring journey and manages all aspects of employee benefits, statutory benefits, and leave entitlements.
See also: More Than a Service: EOR as a Strategic Partner in Business Growth
Hire employees in India effortlessly with Deel Employer of Record
See how fast and easy it is to build your India team with Deel’s Employer of Record services. Book a demo today to experience 48-hour onboarding, real-time compliance alerts, and transparent pricing that removes all guesswork—no hidden fees, no surprises.
Why struggle with months of entity setup and compliance risk? Deel’s India EOR lets you hire top talent, pay salaries, and deliver statutory benefits—including health insurance, maternity leave, and minimum wage compliance—all while staying compliant and audit-ready from day one.
Schedule your demo now and unlock India’s workforce without the usual roadblocks.
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FAQs
How quickly can I onboard employees in India with an EOR?
With Deel EOR, you can onboard compliant full-time employees in as little as 24 hours, compared to months for setting up your own local entity.
Do employees need an Indian bank account?
Yes, employees must have an Indian bank account to receive payroll.
What type of employment contract is used?
Deel EOR issues a written, India-compliant employment contract detailing all statutory terms, including probation, notice, benefits, and leave entitlements.
Does the EOR handle tax withholding (TDS) and filings?
Yes, Deel EOR calculates and remits monthly TDS under Indian law, ensuring no late fees or penalties.
When are payroll and statutory payments due?
Salaries are paid monthly, and all statutory contributions (Provident Fund, Employees State Insurance, gratuity, bonus) are filed on time by Deel to avoid fines.
Are statutory benefits like Provident Fund, ESI, and health insurance included?
Absolutely—Deel enrolls eligible employees in Provident Fund and Employees State Insurance, manages gratuity, health insurance, and pays the required statutory bonus.
How does probation work in India?
Probation can be up to 6 months; Deel’s employment contracts clearly state the terms and support compliant offboarding if needed.
Is 13th or 14th-month pay required in India?
No, but a statutory annual bonus (8.33–20% of salary, per the Payment of Bonus Act) is mandatory, and Deel calculates and pays this as required.
What about data privacy and IP protection?
Deel stores payroll data within India and uses IP Guard to assign inventions to your company, supporting compliance with the Personal Data Protection Bill 2023.
Can Deel help with visas or relocating talent to India?
Yes—Deel Immigration manages visa applications, work permits, and supports foreign hires every step of the way.

About the author
Jemima is a nomadic writer, journalist, and digital marketer with a decade of experience crafting compelling B2B content for a global audience. She is a strong advocate for equal opportunities and is dedicated to shaping the future of work. At Deel, she specializes in thought-leadership content covering global mobility, cross-border compliance, and workplace culture topics.