Employer of Record (EOR) India: Hire, Manage, and Pay Talent Seamlessly

Tarmack is your trusted Employer of Record (EOR) and Global PEO in India for recruiting the best Indian talent without establishing a local entity. Having a fully owned legal presence in India and extensive knowledge of the local labour regulations, we make it easy for global companies to recruit, onboard, pay, and manage employees and contractors, all in one, unified platform.

Employer of Record (EOR) Solutions in India

With its dynamic economy and talent pool with increasing potential, India is one of the most appealing markets to every business across the globe. Nevertheless, local labor laws, payroll, and statutory compliance may be difficult and time-consuming to navigate. This is where Tarmack’s EOR India solutions come in.

Companies from different industries are engaging with Tarmack’s EOR and PEO India services to expedite market entry, minimize administrative overheads, and compliance risks. From onboarding talents to payroll and statutory filings, Tarmack, as one of the leading EOR service providers in India, automates every process of employment, letting you concentrate on business expansion and planning. We provide the following EOR solutions:

Global Hiring and Onboarding: Tarmack assists you in recruiting the best Indian talent without establishing an entity, providing compliant offer letters, local employment contracts, and hassle-free onboarding in line with Indian labour laws.
Payroll Management: We, as an EOR company in India, deal with end-to-end payroll of Indian employees, such as TDS deductions, remittances to EPF/ESI, professional tax, salary payments, and monthly statutory payroll filings.
Compliance Assurance: Tarmack guarantees compliance with all the labour regulations of India, like the EPF Act, ESI Act, Shops and Establishments, payment of wages, and other laws, eliminating the chances of fines or violations of the legislation.
Benefits Administration: We provide India-specific statutory and optional benefits, including EPF, ESI, gratuity, leave benefits, medical insurance, and flexible corporate benefits according to the market norms.

Collaborate with Tarmack now to recruit, onboard, and manage talent in India effortlessly!

Benefits of Employer of Record (EOR) in India

Grow your team effortlessly in India with Tarmack! Our EOR solutions manage payroll, benefits, and legal compliance, allowing you to focus on strategic expansion. With our EOR services, you can experience:

Quicker Hiring: Hire your employees in India without having to create a legal entity.
Complete Compliance: Compliance with Indian labour laws, taxes, and employment regulations.
Cost Efficiency Hiring: Reduce overhead expenses like legal establishment, human resources, and payroll administration.
Flexible Workforce Management: Access full-time workers or contractors in India easily.
Streamlined Payroll & Benefits: Takes care of salaries, benefits, and statutory contributions calculation.

Tarmack offers compliant, efficient, and scalable EOR services in India to help you build your workforce. Contact us today.

Employer of Record India Pricing Structure

1. Employee Services

EOR — from $199/employee/month
Full-time hiring without a local entity. Includes compliant payroll, contracts, benefits, HR/legal support, and IP protection.
Recruiting — from 10% of annual salary
Global talent search with shortlisting, interviews, optional background checks, and country-specific hiring guidance.
Payroll — from $15/employee per cycle
Payroll in 150+ countries, payslips, reimbursements, attendance, and compliant payment processing.
Enterprise — custom
For teams of 10+, with tailored pricing, global mobility support, and market advice.

2. Contractor Services

Contractor Recruiting — from 10% of annual salary
Fast global contractor hiring with AI-based matching, interviews, and optional background checks.
Contractor Management — from $39/contractor/month
Local contracts, compliant payouts, expense tracking, automated invoicing, and the option to convert to full-time later.

3. Corporate & Regulatory Services

Company Formation — contact for pricing
Incorporation and documentation support in 150+ countries, with optional payroll or immigration add-ons.
Immigration — from $999 per visa
End-to-end visa and work permit processing with compliance monitoring.
HR Software — from $2/employee/month
Lightweight global HR system for payroll, expenses, attendance, reporting, and ERP integrations.

Employment Norms in India

India, one of the fastest-growing economies globally, is rich in human and natural resources. It is the most populous country and stands seventh in terms of area in the world. Its robust development in economies, infrastructure, and liberal labor laws have allured investors. The country has been a prime target of an array of businesses owing to its large consumption market.

General Information:

The Indian currency is the Indian Rupees (INR).
New Delhi is the capital of India.
Hindi and English are among the 22 official languages of India. Documentation can be in English or Hindi.
As of 2021, the GDP of India was reported to be USD 3176.30 billion.

The labor laws in India are governed by the Indian constitution and the ILO laws. Indian labor laws include employee benefits like social security, minimum wage, payroll, work hours, leaves, etc.

Table of Contents

Select Section

Employment Agreements
Onboarding Process
Visa
Work Permits
Minimum Wage
Payroll Cycle
Annual Bonus
Health Benefits
Working Hours and Overtime
Leaves
Social Security
Personal Income Tax Rates
Payroll Compliance Overview
Top Skills in Demand
Probation
Termination
Severance Pay
Employees vs Contractors
Global PEO
Start Hiring Today
Frequently Asked Questions

Employment Agreements Onboarding Process Visa Work Permits Minimum Wage Payroll Cycle Annual Bonus Health Benefits Working Hours and Overtime Leaves Social Security Personal Income Tax Rates Payroll Compliance Overview Top Skills in Demand Probation Termination Severance Pay Employees vs Contractors Global PEO Start Hiring Today Frequently Asked Questions

Employment Agreements in India

Recruiting talent in India needs highly developed employment contracts that outline the rights, responsibilities, and expectations between an employer and an employee. These contracts are an essential compliance component in Indian labour laws. Both employees and employers should sign an employment contract to avoid conflicts, safeguard business interests, and be clear to both parties.

The intricate labour regulations in India can pose difficulties when foreign companies recruit via an EOR. Ensuring statutory compliance, creating enforceable agreements, handling probation and termination, and safeguarding intellectual property can be a tedious task. Tarmack assists in avoiding these risks, offering fully compliant contracts and making it easier to onboard international employers.

Types of Employment Contracts in India

Here are the types of employment contracts you can hire through an EOR in India:

Permanent Employment Contracts: Employees who work in permanent positions. There are benefits like PF, ESI, gratuity, and paid leaves, which are statutory.
Fixed-Term Contracts: In the case of a project or a short-term task. Well-specified start and finish dates are needed to control compliance and expectations.
Probationary Contracts: In the case of new employees, 3-6 months, where performance is evaluated before being appointed as a permanent employee.
Consultancy or Contractual Agreements: Applicable to highly skilled independent professionals who are employed to provide fixed deliverables. Compliance with minimum wage requirements and tax payments is still mandatory.

Tarmack assists you in choosing the right type of contract for your international hires, crafting legally binding contracts, and handling payroll, benefits, and legal requirements smoothly.

Main Clauses of Employment Contracts

An effective employment contract in India normally includes the following key terms:

Parties to the Agreement: Establishment of employer and employee, with legal names, address, and details of designation.
Term and Nature of Employment: Identifies the nature of the employment (either permanent, probationary, fixed-term, or contractual), the date of commencement, and the end date of fixed-term contracts.
Job Title, Designation & Reporting Structure: Establishes the role of the employee, reporting manager, department, and organizational hierarchy to avoid confusion over responsibilities.
Duties & Responsibilities: An explanation of the job of the employee, high-performance expectations, extra responsibilities, and the overall job requirements at the workplace.
Payroll & Remuneration: Cost-to-company (CTC) breakdown of the employee, including basic salary, allowances, statutory contributions like PF & ESI, bonuses or incentive eligibility, payment cycle and method.
Working Hours & Working Days: Describes working hours and weekly offs, overtime policies, working schedules, and adherence to the Shops and Establishments Act or labour laws.
Leave Entitlements: Details casual leave, sick leave, earned/privilege leave, national & festival holidays, maternity/paternity leave as per Indian law, policies for leave accrual, encashment, and carry-forward.
Probation & Confirmation: Explains probation term, assessment, extension, and confirmation. A 3-6 months probation period is followed by many Indian companies.
Termination & Notice Period: Explains period of notice between the employer and employee, termination of cause (misconduct, violation of policy), no cause termination (redundancy of role, restructuring), and final settlement schedules, full-and-final payments, and relieving format.
Anonymity and Non-Disclosure: Secures confidential business data, trade secrets, customer data, financial data, and business operations.
Intellectual Property (IP) Assignment: Defines that the employer owns any work, inventions, software, designs, or content developed in the course of the employment.
Non-Compete/Non-Solicitation: Part of the contract to deter an employee from leaving and joining a direct competitor or to request clients/employees to leave.
Workplace Policies & Code of Conduct: Commits the employees to internal policies concerning anti-harassment, data protection, use of company equipment, ethics & compliance and remote-work norms, where applicable.

Tarmack, your Employer of Record India, ensures that all employment contracts are prepared, administered, and executed in accordance with local labour laws. We help foreign employers recruit top expatriate talent without creating a local entity, eliminating the risk of lawsuits, and simplifying contract agreements, payroll, statutory payments, and contract termination. Protect your business and workforce. Let Tarmack manage all employment contract clauses in India with complete legal compliance. Get started.

Onboarding Process in India

In India, the process of onboarding employees and contractors should commence with local labor, tax, and statutory requirements. We at Tarmack effectively handle the entire process of onboarding global recruits to your company. The required documents and the onboarding process in India through EOR are as follows.

Critical Documentation & Information

EOR front-load the requirements of onboarding employees or contractors with the following documents:

Identity & Address Verification: Government-issued ID (passport, Aadhar card, driving licence, PAN card, etc.)
Banking & Tax Information: Provident Fund contributions, Bank account details, PAN card, and UAN.
Education & Professional Credentials: Certificates, mark sheets, and past job letters to authenticate the qualifications and experience.
Employment Agreements: Signed offer letter, employment contracts, confidentiality agreements, and other statutory forms mandated by Indian law.
Emergency Contacts & Personal information: Names, phone numbers, and email addresses in case of emergency or administration.

Onboard your remote employees and contractors in India on Tarmack, a global talent management platform. Request demo!

Step-by-Step Onboarding Process

Every EOR has its formal onboarding approach that addresses all areas of compliance and preparedness as follows:

Document Gathering & Verification - Compiling and checking all forms of documents required to provide legal compliance and accuracy.
Employment Contract & Offer Letter Drawn - Drafting employment contracts and offer letters based on the Indian labor regulations.
Statutory Registrations - Registering Provident fund (PF), Employee State Insurance (ESI), and other obligatory benefits for the employees.
Payroll Setup - Connecting bank accounts and processing salaries with respective statutory deductions.
Orientation & Integration - Providing policy documents and orientation training on the company culture.
Pre-boarding & Equipment Preparation - Ready to work on from day one, including IT access, software credentials, and other tools.

As part of employee onboarding, we ensure all mandatory statutory forms are collected and filed to meet Indian labor law requirements:

PF Form 2 (Nomination & Declaration): Captures employee nomination details for Provident Fund benefits.
PF Form 6A: Maintains consolidated records of annual PF contributions.
ESI Form 2 (Family Declaration): Registers employee family details for ESI coverage.
ESI Form 6: Completes employee registration under the ESI scheme.
Gratuity Forms A, B & C: Manages employee nominations and employer notifications related to gratuity benefits.

These forms help ensure full compliance with statutory obligations from day one of employment.

As your Employer of Record India, Tarmack assists you with the end-to-end onboarding process. Contact our legal team for more information!

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Visa in India

India has three main types of Visas:

Short-term visa: Visas that are valid for a 1-year duration are under this category. This type of visa includes a medical visa or project visa.
Long-term visa: The long-term visa is issued for up to 5 years. This type of visa includes purposes like employment, entry, business, and research. It can be extended for 1 year.
Transit visa: Visas extended as a permit to travelers for crossing the country. It is issued for 15 days.

Work Permit - Employment Visa for India

An Employment Visa is necessary when recruiting international talent in India to work legally. The visa is given to foreigners who plan to visit and work in an Indian company or organisation. Tarmack’s Employer of Record services in India enable international talent to seamlessly integrate into Indian companies while guaranteeing complete adherence to local labor laws and regulations.

Who can get an employment visa in India?

Contract consultants who are paid flat compensation by an Indian company (not necessarily a monthly salary).
Independent consultants who are self-employed and offer highly skilled services (engineering, medical, accounting, legal, IT, etc.).
Professionals in sales, tech, business development, or management roles within Indian companies.
Journalists or media managers working with Indian media organisations.

Salary Threshold & Duration

The minimum salary threshold for an employment visa is a remuneration of ₹1,625,000 per annum or its equivalent (approximately US25,000 per year), including cash payments and taxable perquisites. This threshold aims to confirm that the position occupied by a foreign worker is specialized and not easily found in the local job market.

Change of Employer

Change of employer is usually not allowed within the visa period. It is only permissible in exceptional cases of joining registered holding companies, joint ventures, or their subsidiaries, and in the case of managerial, senior executive, or technical expert, at the discretion of the Ministry of Home Affairs (MHA). During the application, the targeted legal entity and work location in India should be stated clearly.

Duration & Extensions

The maximum duration of employment visa is 5 years/period of contract, after which you can extend if your companies allow you to work. For a contract role, it is issued on a one-year basis or the term of the assignment, whichever is shorter. In case of continuation of the assignment, extensions can be requested within India.

Required Documentation

Applicants must submit several required documents for employment visa application including:

A passport valid for at least 6 months.
Employment contract letter or appointment letter.
Educational and professional certificates.
Registered documents of the Indian employer.
Passport-sized photographs
Other documents can be submitted as necessary based on nationality and job.

Employment Visa Process

The employment visa process begins with the Offer of Employment. The Indian employer gives a detailed offer letter or employment contract to the new hires. Once the offer is accepted, the applicant completes the online visa application through the Indian Visa Online Portal. Following this, all supporting documents are submitted at the Indian embassy, supported by biometrics (where necessary).

The authorities then conduct a visa review, evaluate the role, salary, and compliance of the company and grant the visa. After the visa is issued, the employee can travel to India and commence work. In cases where applicable, FRRO Registration is mandatory to grant legal residency when working.

With our employer of record services India, Tarmack will help you with writing employment agreements, offer letters and compliance documents, and application of employment visa. We ensure salary thresholds and FRRO registration are followed, helping you with legal formalities.

As your Employer of Record India, Tarmack helps you secure an employment visa in India through a hassle-free process. Contact us for more details!

Minimum Wage in India

The minimum wage in India is set according to the Minimum Wages Act of 1948. There are no legal provisions for minimum wages for corporates but only for factory workers. The minimum wage varies from state to state.

The national average minimum wage for factory workers is INR178 per day

Payroll Cycle in India

The payroll cycle in India is monthly and given by the end of the month.

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Annual Bonus in India

It is mandatory to give the 13th month's salary in India. It must be given within 8 months of the end of the current financial year.

Health Benefits in India

The health benefits in India include the Employees' State Insurance Scheme (ESIC), Employees' Provident Fund, Gratuity, statutory leaves; and Maternity Leave.

Working Hours and Overtime in India

Work hours: An employee is expected to work about 9 hours per day. The standard work hour in India must not exceed 48 hours per week.
Break: Employees are entitled to an unpaid lunch break of about 30 minutes between working hours.
Overtime: Overtime in India under corporates must not exceed 12 hours per week. The employer must give 200% of the regular wage during overtime.

Leaves in India

The employer has to pay for the following leave

Sick Leave

Employees are entitled to 12 days of paid sick leave in India.

Maternity leave

A pregnant female employee is entitled to 26 weeks of paid maternity leave in India, 8 weeks before and 18 weeks after childbirth.

Parental leave

There is no legal provision for paternal leave in India. It depends on the employer.

Annual leave

Employees are entitled to 12 days of paid annual leave.

Casual leave (CL)

An employee gets a maximum of 3 days of CL per month and 6 CL per year. If unused by the end of the year, the CL lapses automatically.

Public Holidays (for the Calendar year 2024)

India observes both national and state-specific public holidays. The following list includes the national holidays.

New Year's Day - 1st January
Pongal, Makarsankranti - 14th January
Republic Day - 26th January
Holi - 25th March
Good Friday - 29th March
Id-Ul-Fitr - 10th April
Bakrid - 17th June
Muharram - 17th July
Independence Day - 15th August
Gandhi Jayanthi - 2nd October
Dussehra - 12th October
Diwali - 1st November
Day after Diwali - 2nd November
Christmas - 25th December

Public Holidays (for the Calendar year 2025)

India observes both national and state-specific public holidays. The following list includes the national holidays.

New Year's Day - 1st January
Pongal, Makarsankranti - 14th January
Republic Day - 26th January
Holi - 14th March
Good Friday - 18th April
Id-Ul-Fitr - 31st March
Bakrid - 7th June
Muharram - 6th July
Independence Day - 15th August
Gandhi Jayanthi - 2nd October
Dussehra - 1st October
Diwali - 21st October
Day after Diwali - 22nd October
Christmas - 25th December

Social Security in India

The contribution to social security is an essential component of employee benefits and a statutory obligation in India. To provide employee welfare, employers are under a legal obligation to enroll, deduct, and pay contributions towards different social security plans. Tarmack takes care of these contributions with ease and fully complies with local labor laws.

Significant Social Security Contributions

1. Employees’ Provident Fund (EPF) – Mandatory Retirement Benefit

EPF is mandatory for organisations with 20 or more employees. The statutory wage ceiling is ₹15,000/month, but many companies apply EPF to all employees for better retention. International Workers (IWs) must contribute to their full salary with no wage ceiling.

The contribution rates include 12% of the basic wage and DA as the employee's contribution and 12% as the employer's contribution (split as 3.67% for EPF and 8.33% for EPS – capped at a salary of ₹15,000; i.e., a maximum EPS of ₹1,250/month). For IWs, EPS applies only if their home country has a Social Security Agreement (SSA) with India.

International Worker (IW) Rules:

IW is a foreign national working in India or an Indian national contributing to foreign social security. Both employees and employers must contribute 12% each on full salary, no ceiling. The withdrawal is permitted only for retirement (58 years), permanent disability, or return to an SSA country with a Certificate of Coverage (CoC).

SSA benefits include avoidance of double social security contributions, totalisation of service periods, and early withdrawal as per treaty provisions

2. Employees’ State Insurance (ESI) – Health & Medical Protection

ESI is mandatory for establishments with 10 or more employees. It is applicable to employees earning up to ₹21,000/month (₹25,000/month for persons with disabilities).

The contribution rates are 0.75% of gross wages for employees and 3.25% of gross wages for employers. The ESI benefits include full medical care, sickness benefit, maternity benefit, temporary & permanent disability benefit, dependents’ pension, and funeral expenses.

3. Labour Welfare Fund (LWF) – State-Specific Contribution

LWF is applicable only in specific states such as Maharashtra, Karnataka, Delhi, Tamil Nadu, Gujarat, etc. The rules, amounts, and frequency vary by state. For example, in Maharashtra, employees pay ₹12 per 6 months, and employers pay ₹36 per 6 months. Tarmack ensures exact state-wise compliance when you hire us.

Overall, the social security contributions and filing requirements are determined by the location of the employee and the state-specific laws.

Employer Responsibilities

Enrolling all qualified employees with the concerned social security agencies.
Properly deducting employee wages and payment of employer shares.
Keeping accurate records, file returns, and make payments as stipulated.
Ensuring compliance for both local and international workers who work in India.

As your trusted India employer of record partner, Tarmack handles the social security deductions as per local labor regulations and remits payment to the social security authorities.

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Personal Income Tax in India

Employee income in India is taxed as per the slabs applied by the Income Tax Act. All employers are liable to withhold the tax at source when paying the salaries to the employees. This guarantees all payments of salaries in full compliance with the Indian tax laws.

Tax Regimes Applicable to Employees

India now permits the taxation of employees under two tax regimes:

OLD TAX REGIME
Net Taxable Income (₹)	Tax Calculation Formula	Surcharge
Up to ₹2,50,000	Nil	Nil
₹2,50,001 – ₹5,00,000	5% of income above ₹2,50,000	Nil
₹5,00,001 – ₹10,00,000	₹12,500 + 20% of income above ₹5,00,000	Nil
₹10,00,001 – ₹50,00,000	₹1,12,500 + 30% of income above ₹10,00,000	Nil
₹50,00,001 – ₹1,00,00,000	₹1,12,500 + 30% of income above ₹10,00,000	10%
₹1,00,00,001 – ₹2,00,00,000	₹1,12,500 + 30% of income above ₹10,00,000	15%
₹2,00,00,001 – ₹5,00,00,000	₹1,12,500 + 30% of income above ₹10,00,000	25%
Above ₹5,00,00,000	₹1,12,500 + 30% of income above ₹10,00,000	37%

NEW TAX REGIME
Net Taxable Income (₹)	Tax Calculation Formula	Surcharge
Up to ₹3,00,000	Nil	Nil
₹3,00,001 – ₹7,00,000	5% of income above ₹3,00,000	Nil
₹7,00,001 – ₹10,00,000	₹20,000 + 10% of income above ₹7,00,000	Nil
₹10,00,001 – ₹12,00,000	₹50,000 + 15% of income above ₹10,00,000	Nil
₹12,00,001 – ₹15,00,000	₹80,000 + 20% of income above ₹12,00,000	Nil
₹15,00,001 – ₹50,00,000	₹1,40,000 + 30% of income above ₹15,00,000	Nil
₹50,00,001 – ₹1,00,00,000	₹1,40,000 + 30% of income above ₹15,00,000	10%
₹1,00,00,001 – ₹2,00,00,000	₹1,40,000 + 30% of income above ₹15,00,000	15%
Above ₹2,00,00,000	₹1,87,500 + 30% of income above ₹15,00,000	25%

Employer Responsibilities (TDS Compliance)

Employers, including PEO companies in India, have to comply with TDS in the chosen tax regime:

Get Employee Declaration: The employees have to declare their choice of tax regime to the employer at the beginning of the financial year.
Implement the Right TDS Rates: TDS should be deducted on a monthly basis according to the chosen regime.
No Mid-Year changes (To TDS): The regime option remains unchanged to TDS; employees are allowed to change only when filing their ITR.
Provide Payroll Alignment: Payroll systems should include standard deduction, rebate eligibility, applicable exemptions under the old regime, surcharge and cess calculations and PAN/TAN compliance.
Statutory TDS payment: Should be paid by the 7th of next month (except March, which is to be paid by 30 th April). The salary returns (Form 24Q) are to be filed quarterly, i.e., on 31 July, 31 October, 31 January, and 31 May respectively.
Proper Form 16 Generation: Employers should issue the Annual Form 16 with the right details of salary paid and TDS deducted to employees.

Need assistance with multi-country payroll, TDS calculation, and full tax compliance? Tarmack, your Employer of Record India, guarantees proper, accurate, and worry-free payroll functions for your employees.

India Payroll Compliance

Payroll processing in India involves the rigid following of the taxation rules, social security, labor, and banking laws. With our PEO services India, Tarmack will manage accurate, on-time, and compliant payroll, both to the local and international employees. Here are the mandatory requirements for payroll compliance:

1. Government Requirements

Registration Requirements

Permanent Account Number (PAN): A compulsory tax identification number that is required in every corporate filing and on every employee remuneration in India.
Tax Deduction Account Number (TAN): Needed when withholding taxes on employee salaries and vendor payments. A company can have many TAN registrations, or a single TAN for all locations.

Ongoing Compliance Requirements

Tax Compliance: Employers deduct taxes on employees’ salaries at applicable slab rates and remit the same to the Indian Government Treasury. The Indian tax year is 1st April to 31st March of the next year.
Quarterly Withholding Tax Returns (Form 24Q): This is filed electronically every quarter—Q1 (Apr–Jun) - 31 July, Q2 (Jul–Sep) - 31 October, Q3 (Oct–Dec) - 31 January, Q4 (Jan–Mar) - 31 May
Withholding Tax Certificate (Form 16): Issued annually for employees by employers by 15 June and certifies the taxes that have been withheld and deposited.

2. Social Security and Pension Requirements

Registration Requirements

Provident Funds: This is compulsory for organizations that have 20 or more workers, including contractors. For PF nomination and declaration, Form 2 is important.
Pension Registration: This guarantees that the employees' pension contributions are tracked and recorded.

Ongoing Compliance Requirements

Provident & Pension Fund Contributions: Employee and employer contributions (12% of pay) should be deposited monthly, and should be allocated on employee declarations (Form 11). For PF reporting, Form 6A is provided which has consolidated annual contributions statement.
Form IW-1 (International Workers Reporting): Compulsory filing of international workers and Indian workers who are under social security agreements with foreign countries.

3. Employment Obligations

Registration of employee State Insurance (ESI): Compulsory for a company with more than 10 employees earning below the threshold. The returns and contributions should be submitted monthly. Form 2 is important for ESI family declaration and form 6 is for ESI registration.
Profession Tax (PT) Registration: State-specific; registration, deduction, and remittance are based on the location of the employees. Examples:
- Karnataka (Bangalore): 20th of the next month.
- Maharashtra (Mumbai/Pune): End of the next month.
- Kolkata (West Bengal): 21st of the next month.

Businesses are required to adhere to state laws on local remittance schedules.

4. Labor Registrations and Reforms

Shops and Establishments Act: Registration of premises according to state requirements before commencing operations.
Labour Welfare Fund: Employees and employer contributions according to the state regulations.
Other Labor Laws: Maternity Benefit Act, Employee Compensation Act, Payment of Bonus Act, Equal Remuneration Act, Payment of Gratuity Act, Minimum Wages Act, Payment of Wages Act, etc.
New Labour Codes (Undergoing): This includes the Code on Wages, Code on Social Security, Industrial Relations Code, and Occupational Safety Code. These will substitute some of the existing central labor laws upon their implementation.

5. Payroll Requirements

Compensation and Salaries: Salaries are planned according to roles and responsibilities, levels, and monthly payments, and prorated payments for mid-month entrances or exits.
Statutory Deductions: Income tax, provident fund, pension, ESI, professional tax, and labor welfare contributions.
Payslip & Tax Calculation Practices: Monthly payslips include the correct deductions and annualized tax calculations for each employee.

6. Banking Payroll Requirements

Local/ Expatriate Payment Rules: Indian employees are paid in INR; expatriates' payouts in foreign currency have to comply with FEMA.
Foreign Exchange Management Act (FEMA) Compliance: All foreign currency payments should be properly documented and certified.
NEFT Transfers & RBI Oversight: The salaries are transferred through corporate banks using NEFT in accordance with the regulations of the Reserve Bank of India (RBI).

Partner with Tarmack

Tarmack, your reputable Employer of Record in India, takes care of payroll end-to-end and ensures full compliance with the Indian labor laws and statutory requirements. Let us help you run payroll in India efficiently and accurately, so you can work on growing your business.

Get your workforce compliance easily! Partner with Tarmack, your Employer of Record India, to manage all statutory forms and filings in India. Learn more.

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Top Skills in Demand in India

The Indian talent market is expanding at a rate of more than 7% per year due to the digital transformation, automation, and new technologies. No matter what you do, whether scaling or creating a future-ready workforce, the skills listed below are always useful in any industry:

Data Analysis & Interpretation: Data-driven decision-making is becoming an important part of business operations, and thus, analysts are in demand to extract insights and enhance operational performance.
Artificial Intelligence & Machine Learning: All the way to predictive modelling, AI/ML specialists are driving tech, healthcare, finance, and retail innovation.
Cloud Computing & DevOps: As businesses are moving to cloud-native environments, skills in AWS, Azure, GCP, Docker, and Kubernetes are being sought after.
Risk Management & Cybersecurity: Due to high digital threats, organizations require cybersecurity experts who have the skills to protect systems, networks, and sensitive data.
Full-Stack Engineering & Software Development: Java, Python, JavaScript, React, and Node.js expertise remain essential in the development of scalable online products.
Digital Marketing/Performance Advertising: The SEO, SEM, paid media, and analytics skills will be critical in assisting the brands to remain competitive in the saturated online environment.
Product Management: Product leaders who can match customer requirements, enterprise objectives, and engineering potential are now the company's treasures.
Financial Planning and Analysis (FP&A): Companies are in search of experts who can comprehend budgeting, forecasting, and financial modelling to promote profitability.
Supply Chain & Logistics Management: As India transforms into a manufacturing hub of the world, the need for skilled professionals capable of managing procurement, logistics, and optimization of inventory is on the rise.
Talent Strategy & Human Resource Management: Workforce planning, engagement, compliance, and organizational culture require strategic HR professionals to handle them.

Empower Hiring with Tarmack!

Locating the right talent in such high-demand areas of skills can be tricky, particularly when you are venturing into an expansive market. Employer of Record and recruitment services from Tarmack can help you find the best Indian professionals fast, legally, and at a low cost.

Need to hire competent talent in India? Get in touch with us for recruitment and EOR!

Probation in India

There is no fixed duration of probation in India. It can be for up to 6 months and must not exceed 6 months.

Termination in India

The following scenarios can result in the employment relationship being terminated:

Resignation by the employee
Retirement age
Expiration or non-renewal of the job contract;
Employee dismissal for grave wrongdoing (such as theft, fraud, etc.);
Collective dismissal for financial reasons (such as bankruptcy, restructuring, etc.).
The employee must get a notice period of 30 days before the termination. The termination letter must state a valid reason for the termination.

Severance Pay in India

Employees in India are entitled to severance pay based on the reason for termination. Usually, an employee who has worked for 1 year gets 15 days of severance pay.

Employees or Contractors in India

India has various legal, tax, and compliance obligations associated with hiring employees and independent contractors. The wrong classification may lead to fines, restitution, and legal hassles, and this is why foreign corporations need to classify talent properly.

Key Differences Between Employees and Independent Contractors in India

Income Tax Treatment

Employee taxes are deducted every month under Section 192 by the employers.
The contractors pay tax on professional or business income with the TDS deducted in various sections (194J or 194C), depending on the type of service.

Compensation & Benefits

Employees are paid a fixed salary, allowance, paid leave, overtime allowance, bonus, and mandatory statutory contributions.
Contractors generally are paid per project or on an hourly basis with no statutory deductions by the employer except TDS under applicable sections.

Social Security & Statutory Benefits

Employees are provided with statutory benefits, including Provident Fund (PF), Employee State Insurance (ESI), gratuity, paid leaves, and government-stipulated holidays.
Contractors do not have these benefits; they will be handling their own insurance, retirement, and long-term savings.

Duration & Termination

Employees agreement is ongoing, hence the termination and notice periods fall under the labour laws and the company policy.
Contractor agreements are time-limited or project-oriented. The terms of termination prevail on the commercial contract.

Holidays, Leave & Working Conditions

Employees are entitled to paid leave, sick leave, and national holidays, and have to adhere to the company's work leave policies.
Contractors do not get paid holidays and have control over their work hours unless stated in the contract.

Risk of Misclassification

Indian authorities can re-classify a contractor as an employee if:

They operate under employer-like control.
Work hours and responsibilities are fixed and similar to those of the employees.
They receive the employee-like perks and benefits.
They are part of core business activities.

Reclassification may lead to liabilities on outstanding benefits, penalties, and tax arrears.

With Tarmack as your Employer of Record India, you can recruit remote workers and contractors with ease. Hire us, and we will ensure all workers are properly classified and remain in full compliance with Indian laws. Talk to our experts.

Global PEO in India

A Global PEO in India allows global companies to employ employees and contractors in India without establishing a local company. Under Tarmack Global PEO/EOR services, you can source and onboard talent in India within a few days. We will manage the end-to-end employment lifecycle, such as compliant contracts, payroll, taxes, benefits, and continued HR support.

Start Hiring Today

Our competitive pricing ensures you get the best value without hidden fees. With our cost-effective plans, you can manage your workforce in India efficiently while staying well within budget. Contact us today.

Frequently Asked Questions

What is an Employer of Record (EOR) in India?

An Employer of Record is a legal third-party employer of your workforce in India. It helps foreign or multinational business organisations to hire in India without establishing a local legal structure. They handle all statutory, legal, and compliance liabilities, like employment contracts, onboarding, payroll, taxes, social-security contributions, and labour-law compliance.

What is the cost of an employer of record in India?

EOR prices are transparent with Tarmack. For employees in India, the service fee begins at US $199 per employee per month. In the case of contractors, it begins at US $39 per contractor per month. If you are employing multiple employees and contractors, please contact us for a proper cost estimate.