🇮🇳 Hire in India: cost, rules and best EOR options
The largest English-speaking engineering, data and IT services pool in the world, with deep experience across SaaS and support operations. Time zone overlaps with Europe and, partially, the US West Coast.
- Employer on-costs: 5–10% of gross salary (on a $60,000 salary, about $63,000–$66,000 total)
- EOR onboarding: Days to ~2 weeks (provider claims; specific figure unverified); own entity: Roughly 1-3 months for a private limited company (estimate, not verified)
- Probation: Not set by statute; commonly 3-6 months by contract.
- Currency: Indian rupee (INR)
- Data confidence: medium, verified 2026-10-05
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What it costs to employ someone in India
Employer on-costs run roughly 5–10% on top of gross salary. Recomputed 5 Oct 2026, as % of gross monthly pay (CTC excluding employer statutory items). Employer items: EPF 12% + EPS 8.33% (together the 12% employer PF) + EDLI 0.5% + EPF admin 0.5% on PF wages, plus gratuity accrual of 15/26 x basic = 4.81% of basic (Ministry of Labour notification of 1 Jul 2026 via SCC Online for 12% / 8.33% / 0.5%; admin 0.5% and gratuity formula from secondary sources). Typical structure with basic = 50% of pay (the Code on Wages minimum): PF 12% x 50% = 6.0% + EDLI/admin 1% x 50% = 0.5% + gratuity 4.81% x 50% = 2.4% = about 8.9%, rounded to 10 at the top of the range. Low end: PF wages capped at the mandatory-coverage ceiling (INR 15,000, raised to INR 25,000 on 17 Sep 2026 per Cabinet): at INR 100,000/month, 12% x 25,000 = 3,000 + 125 + 125 = 3,250 (3.3%) + gratuity 2.4% = about 5.7%; at INR 150,000 about 4.6%, so low = 5. Roles where basic is close to 100% of pay (or lower-paid staff with ESIC 3.25% on top) can reach 15-20%. Previous 8-20% range mixed 'percent of basic' with 'percent of pay'. Modelled estimate, not a published figure.
| Contribution | Rate | Notes |
|---|---|---|
| Employees' Provident Fund (EPF) and Pension (EPS) | 12% of PF wages | Ministry of Labour notifications of 1 Jul 2026: EPF 12% (effective 21 Nov 2025), EPS 8.33% (effective 29 Jun 2026). EPS 8.33% has been calculated on wages up to INR 15,000 (PwC). On 16-17 Sep 2026 the Cabinet raised the mandatory-coverage wage ceiling from INR 15,000 to INR 25,000 (effective 17 Sep 2026); whether the EPS cap moves with it is unconfirmed. PF wages must be at least 50% of total remuneration under the Code on Wages definition. |
| Employees' State Insurance (ESIC) | 3.25% of gross wages | Applies to employees earning up to INR 21,000/month in covered establishments (10+ workers in most states); employee pays 0.75%. 3.25% / 0.75% and the INR 21,000 threshold from secondary sources; a rise of the threshold to INR 30,000 was reported as under consideration. |
| Gratuity | 15 days' wages per year of service (about 4.81% of basic) | Under the Code on Social Security, fixed-term employees become eligible pro rata after 1 year; permanent employees after 5 years. |
| EDLI insurance and EPF administration charge | 0.5% (EDLI) + 0.5% (EPF admin) | EDLI 0.5% of wages confirmed in the 1 Jul 2026 Ministry notification (effective 29 Jun 2026). The 0.5% EPF administration charge is from secondary payroll guides (not an official page); wage base for EDLI/admin follows the PF wage ceiling. |
Employee contributes 12% PF (and 0.75% ESIC if covered); employer deducts income tax at source (TDS under Section 192) and professional tax in some states.
Mandatory benefits
- Provident fund
- Gratuity
- ESIC medical cover for lower-paid employees
- Statutory bonus for eligible low-paid staff (8.33%-20%)
- Maternity benefit 26 weeks
- Paid leave and holidays under state Shops & Establishments Acts
Employment rules at a glance
| Payroll | monthly (wages must be paid by the 7th of the following month under the Code on Wages for most establishments) |
|---|---|
| Probation | Not set by statute; commonly 3-6 months by contract. |
| Notice & severance | Notice is contractual (commonly 30-90 days). Retrenchment under the Industrial Relations Code is reported to require one month's notice and compensation of 15 days' average pay per completed year of service (not checked against the Code text); gratuity is separate. Fixed-term employees are entitled to gratuity pro rata after one year. |
| Working time | Typically 8-9 hours per day and 48 hours per week; overtime at twice the normal wage under the labour codes. Shops & Establishments Acts of each state govern office hours. |
| Paid leave | Set by state Shops and Establishments Acts and company policy, so it varies; typically 12-24 days of earned/casual/sick leave plus 8-15 public holidays (exact figures state-specific and not confirmed). The labour codes provide earned leave at 1 day per 20 days worked. |
| Minimum wage | Not verified |
Termination
IR Code requires government permission for layoffs/retrenchment/closure in establishments with 300+ workers (raised from 100). Termination of 'workmen' needs process; tech and office roles are mostly under state Shops & Establishments Acts and contract. Final settlement to be paid within two working days of termination under the Code on Wages. Rules vary by state; the Code on Wages (Central) Rules, 2026 were notified on 8 May 2026 (SCC Online); Industrial Relations and Social Security central rules and state rules should be rechecked.
Employee or contractor in India?
Contractors and freelancers are very common (consultancy agreements, invoicing under GST). Misclassification risk is moderate: Indian courts look at control and integration, and the labour codes tighten contract labour rules. Cross-border contractors can create permanent establishment or tax risks for the foreign company if directed from abroad.
Compare contractor vs employee cost →
Hiring through an EOR in India
A foreign firm needs an Indian entity (private limited, LLP, or branch/liaison office with RBI/FEMA compliance) to employ staff directly; EOR avoids this. Providers typically advertise days to a few weeks.
Typical onboarding: EOR Days to ~2 weeks (provider claims; specific figure unverified); own entity Roughly 1-3 months for a private limited company (estimate, not verified). IST (UTC+5:30), no DST; 9.5-10.5 hours ahead of US Eastern.
Providers worth shortlisting
| Provider | Best for | EOR pricing | Coverage | |
|---|---|---|---|---|
| Deel | Companies that want one platform for contractors, EOR and a US PEO, with transparent per-seat list prices. | $599 per EOR employee per month (public list price, checked 2026-10-05) | 150+ countries (vendor claim, per Deel's own and third-party descriptions) | Visit Deel |
| Remote | Teams that want a published price for each product (EOR, global payroll, contractors, contractor of record, US PEO) and an affiliate program with 12-month revenue share. | $699 per employee/month (public list price, checked 2026-10-05) | 90+ countries for EOR (vendor pricing page claim) | Visit Remote |
| Rippling | Companies already running (or willing to adopt) a unified HR, IT and finance platform who want global hiring as an add-on module. | — | Visit Rippling | |
| Oyster | Distributed teams that want published EOR and contractor prices and a long-running affiliate program with tiered revenue share. | $699 per employee/month (public list price, checked 2026-10-05); annual discounts available; refundable deposit required | 120+ countries EOR; contractors in 180+ countries (vendor claim) | Visit Oyster |
| Papaya Global | Mid-size and larger companies that need multi-country payroll orchestration and workforce payments, and will go through a sales process. | 160+ countries (vendor claim as repeated on FlexOffers listing and third-party pages) | Visit Papaya Global | |
| Multiplier | Cost-conscious teams that want EOR priced below $500 per employee with an annual discount. | Third-party summary of Multiplier's pricing: EOR from $459/employee/month on annual contracts and $499 on monthly contracts (not confirmed; multiplier pricing page returned 403 to our fetch) | — | Visit Multiplier |
| Remofirst | Small teams that want the lowest published EOR starting price and a free contractor tier. | Starting at $199 per person/month (public list price, checked 2026-10-05); 'no hidden fees, setup fees, or minimum contract terms' per vendor page | 185+ countries for EOR (vendor claim) | Visit Remofirst |
| Pebl (formerly Velocity Global) | Companies that want an EOR with a tiered reseller/partner program and are comfortable with a recently rebranded vendor. | Third-party reports a flat $399 per employee/month (not confirmed on vendor page; hellopebl.com/pricing returned 404) | 185+ countries (third-party report) | Visit Pebl (formerly Velocity Global) |
Paying and covering your team in India
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FAQ
What does the employer pay into provident fund?
12% of PF wages (the 12% includes 8.33% to the Pension Scheme), plus 0.5% EDLI and a 0.5% administration charge, per the Ministry of Labour's 2026 scheme notifications. The mandatory-coverage wage ceiling was raised from INR 15,000 to INR 25,000 on 17 Sep 2026.
Is gratuity mandatory?
Yes. 15 days' wages per year of service, typically after 5 years; under the Code on Social Security, fixed-term employees qualify pro rata after 1 year.
What changed with the labour codes?
Four labour codes took effect on 21 November 2025; the 50% wage rule requires basic wages to be at least half of total pay, increasing PF and gratuity costs.
Do I need an entity to hire in India?
To employ people directly, yes. EOR providers allow hiring without one.