Cost of Employer of Record (EOR) Services in India

By the EOR Services India team. Last updated 12 October 2026. EOR Services India has 18+ years in the business and serves 550+ clients, with a 42,000+ workforce across 3 countries.

A finance manager approves a hire at ₹1,25,000 a month, and the first invoice comes in higher. Employer contributions and gratuity add about ₹6,256 before the EOR fee, which at EOR Services India starts from $49 per employee per month. So add up every line in advance, the fee, the statutory costs and the state rules, and the budget holds.

Most talk about the cost of hiring in India starts and ends with the monthly fee. It is the easiest number to compare. Yet it is also the smallest part of the bill. The rest is salary, employer contributions, gratuity and a few state rules, and every one of them follows a formula that the client can calculate before the hire starts. An Employer of Record (EOR) is the legal employer of a worker hired for another company: it signs the contract, runs payroll and files the statutory returns, while the client directs the daily work.

The Cost at a Glance

Contents

• What hiring in India really costs
• One salary, many cost lines
• Worked example at ₹1,25,000 a month
• Salary level and the math
• Role and cost
• City and cost
• Budgeting a team
• The ₹25,000 EPF ceiling
• Flat, percentage or hybrid fees
• What the fee covers
• What moves the fee
• Statutory rates and due dates
• How fast a hire can start
• EOR, contractor or own entity
• India specialist or global platform
• What this means for a budget
• Questions and answers

What Hiring in India Really Costs

Item	Figure
EOR fee at EOR Services India	From $49 per employee per month for the basic package
Employer statutory cost on ₹1,25,000 gross	About ₹6,256 a month (5.0% of gross)
Total before the EOR fee on ₹1,25,000 gross	₹1,31,256 a month
Time to put an Indian hire on payroll	2 to 3 days
EPF wage ceiling	₹25,000 a month from 17 September 2026

The bill has three buckets. First, salary is the largest, and the employer sets it. Second, the statutory bucket is smaller, and the law sets it. Third, the EOR fee is the one most people see first. As a result, a budget built on the third bucket alone always comes in low, because the other two arrive every month, planned or not.

One Salary, Many Cost Lines

Every employee on Indian payroll comes with the same set of lines. Some sit on top of salary, and the employer pays them. Others, however, come out of the employee’s pay. Tell the two apart, and most of the gap between a quoted salary and the real monthly cost disappears.

Cost line	Basis	Who pays
Gross salary	As agreed in the employment contract	Client, through the EOR
EOR fee	From $49 per employee per month for the basic package; the final fee depends on the requirement	Client
Employer EPF	12% of wages up to the ₹25,000 ceiling (3.67% to EPF and 8.33% to EPS)	Employer, on top of salary
EDLI and PF admin charge	0.5% each, on the same wages	Employer
Employer ESIC	3.25% of wages, for employees earning up to ₹21,000 a month	Employer
Gratuity provision	About 4.81% of basic	Employer
Professional tax	The state sets it, up to ₹2,500 a year	Employee, through payroll
Group insurance	As agreed in the package	Employer

What the Jargon Means

The jargon is simpler than it looks. First, EPF is the retirement fund, and the employer adds 12% of wages next to the employee’s own share. Then, EDLI is a small life insurance cover, and the admin charge pays for running the fund. Also, ESIC is statutory health insurance for lower paid staff. Finally, gratuity is a lump sum that the employer pays on exit after the qualifying period, so the books carry it as a monthly provision and it never lands as a surprise. Rates are from CorpReady. In addition, the EPF wage ceiling of ₹25,000 a month applies from 17 September 2026 (earlier ₹15,000), according to SCC Online. For the effect on employer cost, read PF wage ceiling for employers in India.

Real-World Example: A Mid-Level Engineer at ₹1,25,000 a Month

Take a mid-level software engineer who joins at ₹1,25,000 gross a month. Basic pay is half of that, ₹62,500, and the employer pays EPF on the ₹25,000 ceiling.

Item	Calculation	Monthly amount
Gross salary	As agreed	₹1,25,000
Employer EPF	12% of ₹25,000	₹3,000
EDLI	0.5% of ₹25,000	₹125
PF admin charge	0.5% of ₹25,000	₹125
Employer ESIC	Gross is above ₹21,000, so not applicable	₹0
Gratuity provision	About 4.81% of ₹62,500	₹3,006
Employer statutory total		₹6,256
Total before the EOR fee		₹1,31,256
Total for the year, before the EOR fee	12 months	₹15,75,072

EPF takes ₹3,000, because the calculation uses the ceiling and not the full basic. Gratuity comes next at ₹3,006. ESIC then drops out, since the salary is above ₹21,000. In total, the employer adds ₹6,256 a month on top of salary, or 5.0% of gross. Over a year, this one engineer costs ₹15,75,072 before the EOR fee.

Some employers pay EPF on actual basic instead of the ceiling. In that case, employer EPF is ₹7,500 and the monthly total before the fee becomes ₹1,35,756. Either way, the EOR fee comes on top. For a fee quote on this exact profile, talk to our team.

Does the Salary Level Change the Math?

It does, and the direction surprises many first time employers. First, ESIC stops above ₹21,000. Second, EPF stops rising at the ₹25,000 ceiling. The statutory share of pay therefore shrinks as salary climbs, while gratuity keeps growing with basic.

Gross a month	Basic (50%)	EPF, EDLI and admin	ESIC	Gratuity	Statutory total	Share of gross	Total before the fee
₹18,000	₹9,000	₹1,170	₹585	₹433	₹2,188	12.2%	₹20,188
₹40,000	₹20,000	₹2,600	₹0	₹962	₹3,562	8.9%	₹43,562
₹75,000	₹37,500	₹3,250	₹0	₹1,804	₹5,054	6.7%	₹80,054
₹1,25,000	₹62,500	₹3,250	₹0	₹3,006	₹6,256	5.0%	₹1,31,256
₹2,50,000	₹1,25,000	₹3,250	₹0	₹6,013	₹9,263	3.7%	₹2,59,263

At ₹18,000 a month, for example, statutory cost takes 12.2% of gross, because ESIC applies and EPF runs on actual basic. At ₹2,50,000, by contrast, it takes 3.7%. Also, the figures exclude the EOR fee, professional tax and insurance.

Does the Role Change the Cost?

The statutory rules ignore job titles, so a role changes the bill only through pay. A support executive and a senior manager follow the same formula, yet they land on very different numbers.

Type of role	What changes in the bill
Entry level and support roles, for example at ₹18,000 gross	ESIC applies (₹585 a month) and EPF runs on actual basic; statutory cost is 12.2% of gross
Mid-level engineers, analysts and marketers, for example ₹75,000 to ₹1,25,000	EPF sits at the ceiling and ESIC does not apply; statutory cost is 5.0% to 6.7% of gross
Senior leads and managers, for example ₹2,50,000	EPF still hits its cap, so gratuity becomes the largest line (₹6,013); statutory cost is 3.7% of gross
Roles in regulated industries	More compliance work, which can move the fee
Foreign nationals	The employee needs a visa, which adds about 2 to 3 months before the start date

Bengaluru, Gurugram or Pune: Does the City Change the Bill?

Less than most budgets assume. In fact, EPF, EDLI, ESIC and gratuity follow national rules, so the same salary carries the same employer cost in every city. The difference, however, sits in the state layer: professional tax, registrations and filings.

City	State	Professional tax at ₹1,25,000 gross	Effect
Bengaluru	Karnataka	Levied; ₹200 a month at this salary	State registration and monthly deduction from the employee
Gurugram	Haryana	Not levied	No professional tax registration
Pune	Maharashtra	Levied; ₹200 a month and ₹300 in February (₹2,500 a year)	State registration and monthly deduction from the employee

The employer deducts professional tax from the employee’s pay, so it lowers take home pay and leaves employer cost unchanged. The extra work, though, falls on payroll: a team in Bengaluru and Pune carries two state registrations, and a team that adds Gurugram adds none for this tax. Source for the slabs: Kredily. For registration rules in three states, read professional tax in Karnataka, Maharashtra and Telangana.

Five Hires or Fifty: Budgeting a Team

One hire is a test case. A team shows the pattern, because every cost line multiplies with headcount. The table therefore uses the ₹1,25,000 example and the starting fee of $49 per employee per month. The final fee, however, depends on the client’s requirements.

Employees	Gross salary a month	Employer statutory a month	Employer statutory a year	Fee at the starting rate a month	Fee at the starting rate a year
1	₹1,25,000	₹6,256	₹75,072	$49	$588
5	₹6,25,000	₹31,280	₹3,75,360	$245	$2,940
10	₹12,50,000	₹62,560	₹7,50,720	$490	$5,880
25	₹31,25,000	₹1,56,400	₹18,76,800	$1,225	$14,700
50	₹62,50,000	₹3,12,800	₹37,53,600	$2,450	$29,400
100	₹1,25,00,000	₹6,25,600	₹75,07,200	$4,900	$58,800

For example, ten engineers at this salary carry ₹62,560 a month in employer statutory cost, or ₹7,50,720 a year, before any fee. That number explains why a team budget based on fees alone drifts so far from the invoice.

The ₹25,000 EPF Ceiling: A ₹1,300 Monthly Jump

One rule change broke every budget that finance teams drew up before September 2026. From 17 September 2026 the ceiling for mandatory EPF coverage rose from ₹15,000 to ₹25,000 a month. As a result, for an employee who earns above the ceiling, employer cost moves like this.

Item	Ceiling ₹15,000	Ceiling ₹25,000	Change a month
Employer EPF at 12%	₹1,800	₹3,000	₹1,200
EDLI at 0.5%	₹75	₹125	₹50
PF admin charge at 0.5%	₹75	₹125	₹50
Total	₹1,950	₹3,250	₹1,300

Over a year, that adds ₹15,600 for each employee who earns above the ceiling, and across ten such employees it adds ₹1,56,000. The calculation uses the ceiling as the wage base. If the employer pays EPF on actual basic, however, the cost is higher.

Flat, Percentage or Hybrid: Picking a Fee Model

EOR pricing in India comes in three models, and the right one depends on what the team earns.

Model	How the fee works	Suits
Flat fee	A fixed amount per employee per month, whatever the salary	Higher or variable salaries
Percentage of salary	A share of each employee’s pay, so the fee rises with salary	Lower paid roles and small teams
Hybrid	A smaller flat fee plus a percentage on part of the pay	Mixed teams with a wide salary range

In contrast, a percentage fee follows every raise. For example, at 5%, an employee on ₹80,000 costs ₹4,000 a month in fees, and an employee on ₹2,50,000 costs ₹12,500. A flat fee, by contrast, stays the same for both, so senior hiring tends to favour it. Meanwhile, the basic package at EOR Services India starts from $49 per employee per month, and current rates are on the pricing page.

What Does the Fee Cover, and What Comes on Top?

In short, the fee pays for the employment work: the contract, payroll, filings and the exit process. Money that leaves for the employee, the government or an insurer comes on top, at cost.

Item	How it is treated
Employment contract and onboarding	Part of the EOR service
Monthly payroll and payslips	Part of the EOR service
TDS and statutory filings	Part of the EOR service
PF and ESIC filing	Part of the EOR service; the contributions themselves come on top of salary
Salary and employer contributions	On top of the fee
Gratuity	On top of the fee
Group health insurance	On top of the fee
Exit and final settlement	Final settlement dues come on top of the fee

The basic package is the starting point, and the final fee depends on the client’s requirements. In addition, group insurance comes on top, and visa support for foreign nationals depends on the case.

What Moves the Fee Up or Down?

No two teams get the same quote, because the work behind the fee differs from team to team.

Factor	Effect on the fee
Headcount	The size of the team sets the fee
Number of states	Each state adds professional tax and labour rule checks
Industry	Regulated sectors need more compliance work
Benefits	Insurance and retirement plans add to total cost
Service scope	Visa support for foreign nationals depends on the requirement

Statutory Rates and Due Dates in One Place

Item	Rate or rule	Due date
Employer EPF	12% of wages (3.67% EPF and 8.33% EPS), wage ceiling ₹25,000	15th of the next month
EDLI and PF admin	0.5% each	15th of the next month
ESIC	3.25% employer and 0.75% employee, wages up to ₹21,000	15th of the next month
Salary TDS	As per the employee’s tax slab	7th of the next month
TDS returns	Quarterly filing	31 Jul, 31 Oct, 31 Jan and 31 May
Form 16	Issued to the employee	15 June
Gratuity	Provision of about 4.81% of basic	On exit, after the qualifying period

Sources: CorpReady for rates and PF and ESIC dates, TaxAJ for TDS and Form 16 dates. Under the four labour codes, in force since 21 November 2025, final settlement is due within two working days of an exit and fixed term employees qualify for gratuity after one year (DLA Piper). The Employees’ Provident Fund Organisation, the Employees’ State Insurance Corporation and the Ministry of Labour and Employment publish official notices and contribution rules. For more on ESIC, read ESI contribution in India.

How Fast Can a Hire Start?

Every week a role stays empty is a week of work that does not get done.

Type of hire	Typical time to payroll
Indian hire	2 to 3 days
Foreign national who needs a visa	Roughly 2 to 3 months, depending on the employee’s country

An Indian hire can start within days, because no entity needs to be registered first. The Employer of Record in India page describes the steps and documents, and the what is an Employer of Record guide explains the model.

EOR, Contractor or Own Entity: Where the Money Goes

There are three ways to put a person to work in India, and each spends money in a different place. A contractor looks cheapest at the start. An own entity, however, looks cheapest at scale. Meanwhile, an EOR sits between them for teams that want employees without the setup.

Factor	Contractor	Employer of Record	Own Indian entity
Legal status of the worker	Independent contractor	Employee of the EOR	Employee of the company
Statutory benefits	None by default	The EOR handles EPF, ESIC, gratuity and leave	The company handles it
Cost shape	Contract fee	Monthly fee plus employment cost	Incorporation, then accounting, HR and audit costs
Compliance load	Misclassification risk sits with the client	The EOR handles employment filings	The company’s own team carries it
Exit	End of contract	The EOR handles notice and settlement	The company handles it

A Professional Employer Organisation (PEO) works differently, because it needs the client’s own registered Indian entity. See PEO services in India. In practice, small and early teams usually find an EOR cheaper than an entity, while large teams that plan for many years can justify one. The full comparison is in EOR vs setting up your own subsidiary in India.

India Specialist or Global Platform: What Changes in the Bill

Two providers can quote the same fee and deliver the work through different structures. The difference shows up when something needs fixing: a payroll correction, a contract change or a statutory notice.

Area	India specialist	Global platform working through a local partner
Legal employer	The provider’s own registered Indian entity	A local partner entity
Payroll and compliance	One organisation	Shared between the platform and the partner
Who answers HR and payroll questions	One team	Questions can pass through two organisations
Fit	Teams hiring in India	Teams hiring in many countries under one contract

A team hiring across ten countries may value one contract for all of them. A team building its main engineering base in India, on the other hand, usually values one organisation that owns the whole chain. The full comparison is in direct EOR vs partner led EOR in India.

What This Means for a Hiring Budget

In short, the cost of hiring employees in India comes down to three parts. Salary is the biggest bucket, employer statutory cost adds roughly 4% to 12% on top of it depending on pay, and the EOR fee starts from $49 per employee per month. A budget that carries all three, with the new ₹25,000 EPF ceiling, will match the first invoice instead of surprising the finance team three months later.

So the next step is a quote based on the real numbers: how many hires, which states and what roles.

Employer of Record in India Cost: FAQ’s

Fees and Total Cost

How much does an Employer of Record cost in India?
At EOR Services India the fee starts from $49 per employee per month for the basic package, and the final fee depends on the client’s requirements. In addition, the client pays salary, employer PF and ESIC contributions, gratuity and insurance on top. For an employee on ₹1,25,000 a month, for example, employer statutory costs add about ₹6,256 before the fee.

Is the EOR fee the full cost of an employee?
No. The fee covers the EOR service. The full cost, however, adds salary, employer EPF, EDLI and PF admin charges, ESIC where it applies, gratuity, professional tax and any group insurance.

How is the cost of one employee in India calculated?
Start with gross salary. Then add employer EPF at 12% of wages up to the ₹25,000 ceiling, EDLI and admin charges at 0.5% each, ESIC at 3.25% for wages up to ₹21,000, a gratuity provision of about 4.81% of basic, and the EOR fee. The employer deducts professional tax from the employee’s pay, so it affects take home pay and not employer cost.

City, Fee Model and Extras

Does the city change the cost of an EOR hire in India?
Not the statutory contributions. Instead, EPF, EDLI, ESIC and gratuity follow national rules, so the same salary carries the same employer cost in Bengaluru, Gurugram or Pune. The city, though, changes the state registrations, professional tax and take home pay.

Is a flat fee or a percentage fee better?
A flat fee suits higher or variable salaries because the fee stays fixed. A percentage fee rises with pay, so it costs more as salaries grow. Meanwhile, a hybrid pairs a smaller flat fee with a percentage on part of the pay.

What is paid on top of the EOR fee?
The client pays salary, employer PF and ESIC contributions, gratuity, group insurance and final settlement dues on top of the fee.

Contributions and the Final Fee

Who pays PF and ESIC?
Both are shared. First, the employer pays its part on top of salary while the EOR deducts the employee’s part from pay. It then files and remits both by the 15th of the following month.

Does the EPF wage ceiling change the cost?
Yes. The ceiling rose from ₹15,000 to ₹25,000 a month from 17 September 2026. As a result, employer EPF at the ceiling is now up to ₹3,000 a month, against ₹1,800 earlier, and higher if the employer pays EPF on actual basic.

What decides the final EOR fee?
The requirement. Headcount, the number of states, the roles, the industry and the service scope all shape the quote, which is why each team gets its own fee.

Setup, Timing and Rules

Is an EOR cheaper than setting up an Indian entity?
For small or uncertain headcount, usually yes, because there is no incorporation and no accounting or HR team to run. Large teams that plan for many years, however, can justify an entity.

What is the difference between an India specialist and a global EOR platform?
An India specialist employs through its own registered Indian entity, so the legal employer, the payroll team and the HR contact sit in one organisation. A global platform, by contrast, often works through a local partner in India, which adds a second organisation to the chain.

How long does it take to put an employee on payroll?
Indian hires take 2 to 3 days. Foreign nationals who need a visa, however, take roughly 2 to 3 months, depending on the employee’s country.

Can an employee move to the client’s own entity later?
Yes. The employee can either stay on the EOR’s payroll or move to the client’s entity through a planned process once the client has registered its own company in India.

Does the cost change when labour codes change?
Yes. The four labour codes have been in force since 21 November 2025. Final settlement is due within two working days of an exit, and fixed term employees qualify for gratuity after one year, so exit and gratuity costs belong in the budget from day one.