Hiring Made Easy in India with Employer of Record Solutions

Hire employees in India with employer of record support and the first person can start in weeks, not months. Without it, a foreign company waits through incorporation, tax registration and payroll set up before paying a single salary. An Employer of Record in India becomes the legal employer, runs payroll, statutory deductions and compliance, and the company directs the daily work. Fees start from $49 per employee per month.

What an Employer of Record Does in India

The employer of record signs the employment contract, registers the employee for statutory schemes and files every return. The client company keeps control of the work: tasks, targets, reporting lines and performance reviews. For a full definition, see what is an Employer of Record.

Task	Employer of record	Client company
Employment contract and offer letter	Issues and holds the contract	Approves role, salary and start date
Payroll, TDS and payslips	Runs monthly and files returns	Confirms hours, bonuses and changes
PF, ESI and other statutory schemes	Registers, deducts and remits	Funds the employer share
Leave policy and benefits	Sets a compliant policy and administers it	Chooses any extra benefits
Daily work and performance	No role	Full control
Exit, notice and final settlement	Handles documents and dues	Decides on the exit

How Hiring Through an Employer of Record Works

1. Define the role. Set the job title, salary, location and whether the post is permanent or fixed term.
2. Sign the service agreement. The client signs one agreement with the employer of record, not a separate agreement for each hire.
3. Choose the candidate. The client finds and selects the person. An employer of record does not recruit; a recruitment partner can handle sourcing if needed.
4. Issue the contract. The employer of record sends a compliant offer letter and completes ID checks and tax and benefit forms.
5. Start payroll. The employee joins, and payroll, deductions and filings run each month from the first pay cycle.
6. Manage changes. Raises, leave, transfers and exits go through the employer of record so records stay correct.

What It Costs and What Sits on Top of the Fee

The service fee starts from $49 per employee per month. Salary and the employer’s statutory contributions are separate costs and belong in the budget from day one.

Cost item	Rate or rule	Who pays
Employer of record service fee	From $49 per employee per month	Client company
Provident Fund (EPF), employer share	12% of wages, with the wage ceiling applying to mandatory coverage; plus 0.5% EDLI and 0.5% admin charges	Client company, through the employer of record
Employee State Insurance (ESIC), employer share	3.25% of gross wages for employees earning up to ₹21,000 a month	Client company, through the employer of record
Employee contributions	12% EPF and 0.75% ESIC, deducted from salary	Employee
Gratuity	Payable after the qualifying service period under the labour codes	Client company

Rates are from published EPFO and ESIC schemes as summarised by CorpReady. Confirm current rates with the employer of record before signing, since schemes change.

Employer of Record or Own Indian Entity

Factor	Employer of record	Own Indian entity
Legal employer	The employer of record	The client’s own company
Set up before first hire	Service agreement only	Incorporation, tax and labour registrations, bank account
Payroll and filings	Handled by the provider	Built and run in house or outsourced
Best for	Market entry, small teams, testing demand	Large, long term operations
Exit	End the service agreement	Wind up the entity and close registrations

Many companies start with an employer of record, then move staff to their own entity once headcount and revenue justify it. A provider that supports that transfer saves a second round of contracts.

Compliance Points for 2026

All four labour codes (Wages, Social Security, Industrial Relations, and Occupational Safety, Health and Working Conditions) took effect on 21 November 2025, though some central and state rules were still pending. Two changes matter most for new hires. Fixed term employees become eligible for gratuity after one year of contract service under the Industrial Relations Code, and employers must complete full and final settlement within two working days of an exit. Source: DLA Piper.

Questions About Hiring Employees in India With an Employer of Record

Is it legal to hire employees in India without a local entity?
Yes. The employer of record is the registered Indian employer, so the foreign company does not need its own entity to employ staff. The employer of record carries the statutory duties as the legal employer.

How fast can the first employee start?
Onboarding is measured in weeks, since no incorporation is needed. The timeline depends on how quickly the candidate is chosen and the documents are returned.

Who controls the employee’s work?
The client company. It sets tasks, hours and goals, while the employer of record handles contracts, payroll and compliance.

Does an employer of record find candidates?
No. It employs the person the client selects. Sourcing is a separate recruitment service.

What if the company opens its own entity later?
Employees can be transferred to the new entity with fresh contracts and records. Planning the transfer date with the provider avoids gaps in PF and tax records.

More answers are in the hiring in India FAQ.