EOR Companies in India: Hiring, Payroll, and Compliance Guide
EOR companies in India become the legal employer of staff that a foreign business hires and directs. The EOR signs the employment contract, runs payroll, files PF, ESI, TDS and Professional Tax, and handles exits. The client manages the daily work. The right provider has proven compliance depth, a full cost quote, clear onboarding steps, named support and fair exit terms. Hiring through one takes weeks, not the months an Indian entity needs. A first hire does not require any registration in India.
What an EOR Company in India Handles
The EOR is the employer on paper and the client is the employer in practice. Under an Employer of Record in India arrangement, the EOR company carries these tasks:
- Employment contracts, offer letters and joining formalities
- Monthly payroll, salary payment and payslips
- Statutory filings for PF, ESI, TDS and Professional Tax
- Benefits such as health insurance, gratuity and leave
- Exit handling, including notice, final settlement and records
The client picks the candidate, sets the role and pay, and directs the work. An EOR company is not a recruitment agency. However, some providers offer both services, and the two solve different problems.
Statutory Rates an EOR Company in India Applies
Every EOR company in India applies the same central rates. However, Professional Tax is the state level item. The government sets these rates and can change them, so each provider should confirm current figures at onboarding.
| Item | Rule that applies |
| Provident Fund | Employer pays 12% of PF wages. The wage ceiling is ₹25,000 a month from 17 September 2026. |
| ESIC | Employer pays 3.25% for employees earning up to ₹21,000 a month. |
| Professional Tax | Each state sets its own rate. Karnataka charges ₹200 a month at ₹25,000 and above, with ₹300 in February and ₹2,500 a year. Delhi, Haryana and Uttar Pradesh charge none. |
| Labour codes | In force from 21 November 2025. |
| Gratuity | Employees receive it after 5 years of continuous service. Fixed term employees who joined on or after 21 November 2025 qualify after 1 year. |
Hiring in a specific city? See EOR services in Bengaluru, Mumbai, Delhi NCR, Hyderabad and Pune.
Is an EOR Company Legal in India?
Yes. An EOR arrangement is legal when the provider and the client structure it correctly. The EOR becomes the registered employer under India’s labour laws and the state Shops and Establishments Acts. Then it handles PF registration, ESI enrolment and TDS filing, while the client directs the daily work. In addition, the structure can reduce the permanent establishment risk that unstructured employment creates for foreign companies. How to employ workers in India without a local branch explains the legal set up.
Who Are the Main EOR Companies in India?
They fall into two groups. India focused providers include EOR Services India, Remunance and Gloroots. Global platforms that cover India among many countries include Deel, Remote, Multiplier, Oyster HR, Atlas HXM, Papaya Global and Globalization Partners. The first group suits businesses hiring mainly in India. The second suits businesses running teams across many countries on one platform. Best EOR service providers in India compares the strengths, limits and fit of each. For a second shortlist, see top EOR service providers in India. Also, EOR vendors in India for hiring remote teams covers the vendor side.
How Hiring Through an EOR Company in India Works
- First, the client selects the candidate and agrees the role and pay.
- Next, the EOR issues the offer letter and employment contract.
- Then the candidate submits identity, bank and tax documents.
- After that, the EOR registers the employee for PF and ESI where they apply.
- Afterwards, the EOR sets up payroll with the salary structure and deductions.
- Finally, the first payroll runs, and the employee starts work under the client’s direction.
Onboarding typically takes one to three weeks. For remote staff, hybrid onboarding process for remote employees in India describes a suitable process.
What an EOR Company Files Every Month
Each pay cycle the EOR calculates salary, deducts TDS and pays PF and ESI contributions. It also pays Professional Tax in states that charge it, issues payslips and keeps the statutory records. However, rates and rules differ by state. EOR payroll and tax compliance in India explains the full monthly cycle. Likewise, labour code rules by state covers state differences.
How to Choose an EOR Company in India
Score every provider on the same seven points before signing. The best EOR service providers in India guide compares named providers side by side.
| Criterion | What to ask the provider | Warning sign |
| Compliance depth | Which EPF, ESI, TDS and Professional Tax filings are run for the state of hire, and who holds the registrations? | Vague answers about which states the provider is registered in |
| Total cost | What is the full monthly cost, including statutory contributions, onboarding and exit fees? | A headline fee that leaves out statutory contributions |
| Onboarding steps | Which documents are needed, and what are the steps from signed offer to first payroll? | A headline number with no steps behind it |
| Support | Is there a named account manager, and how fast are payroll issues answered? | A shared inbox and no response time |
| Exit and transfer | How are employees moved to the client’s own Indian entity later? | Fees or friction around transfers |
| References | Can the provider share clients hiring in the same state and role type? | Refusal to share references |
| Payroll visibility | Which payroll reports and records can the client see directly? | No access to payroll data |
Choosing on price alone tends to backfire. For example, a low cost provider without real compliance depth causes late filings and slow onboarding. That disruption costs more than the saving.
EOR Company or Own Indian Entity
| Point | EOR company | Own Indian entity |
| Legal employer | The EOR company | The client’s Indian company |
| Time to first hire | Typically one to three weeks | Several months, including registrations |
| Upfront cost | Monthly service fee, no entity setup cost | Incorporation, registrations, legal and accounting setup |
| Compliance owner | The EOR company | The client |
| Best for | First hires, market tests and small teams | Large permanent teams |
Many companies start with an EOR. Then they move employees to their own entity once headcount justifies it. For the full comparison, read EOR vs setting up a subsidiary in India.
How EOR Companies in India Charge
Providers charge either a flat monthly fee per employee or a percentage of gross pay. A flat fee stays predictable across salary levels. By contrast, a percentage grows with every raise and costs more on senior hires. Therefore, compare the full monthly cost, not the headline fee. EOR Services India starts from $49 per employee per month. EOR pricing models in India explains each model.
Who Uses EOR Companies in India
Startups testing the Indian market, firms hiring a few engineers or specialists, and companies running project teams use an EOR to start without an entity. Similarly, larger firms use one for pilot teams before committing to a subsidiary. For a worked example, see startup hiring in India with an Employer of Record.
When an EOR Company Is Not the Right Fit
A large permanent team in India usually costs less through its own entity over time. Likewise, a business that wants direct control of every employment contract may prefer an entity. Finally, a PEO is an option only for a business that already has its own registered Indian entity. It shares employment duties with that entity. See PEO services in India for that route.
Risks to Plan For
- Because the client depends on the provider’s accuracy, ask for monthly payroll reports.
- Roles can blur between internal HR and the EOR. Therefore, agree who handles what in writing at the start.
- Also, switching providers needs a handover of payroll history and statutory records. Confirm that process before signing.
For more detail, Employer of Record services in India answers fifty more common questions.
Frequently Asked Questions About EOR Companies in India
Is an EOR company legal in India?
Yes. An EOR arrangement is legal when the provider and the client structure it correctly. The EOR becomes the registered employer under India’s labour laws and the state Shops and Establishments Acts, handling PF registration, ESI enrolment and TDS filing, while the client directs the daily work.
How is an EOR company different from a recruitment agency?
A recruitment agency finds and screens candidates. In contrast, an EOR company becomes the legal employer of a candidate the client has already selected, handling payroll, contracts and statutory compliance. Some providers offer both services, but they solve different problems.
How quickly can an EOR company onboard an employee in India?
Most EOR providers complete onboarding within one to three weeks of a candidate accepting an offer. By contrast, setting up an Indian entity takes several months.
Do EOR companies in India charge a flat fee or a percentage of salary?
Both models exist. Some providers charge a flat monthly fee per employee regardless of salary, while others charge a percentage of gross compensation. However, the better option depends on the seniority mix of the roles being hired.
What should disqualify an EOR provider during evaluation?
A vague answer about which states the provider is registered in, an unwillingness to share references, or pricing that leaves statutory contributions out of the headline quote are all warning signs.
Can a company switch EOR providers without disrupting employees?
Yes, though it needs a careful handover of payroll history, statutory records and employment documents. In addition, a reputable provider supports the transition rather than resisting it.
Is an EOR company the same as a PEO?
No. An EOR company is the legal employer of the worker. In contrast, a PEO shares employment duties with the client and needs the client’s own registered Indian entity.