Monthly Cost of Employing One Full-Time Software Developer Through an Employer of Record (EOR) Provider in India
Software developer cost in India through an Employer of Record is the salary plus a layer of statutory contributions, accruals and a service fee. In the worked example below, a gross salary of ₹1,25,000 a month becomes about ₹1,31,000 to ₹1,36,000 of employer cost before insurance and the EOR fee, depending on how provident fund is applied. Setting out each layer before an offer goes out keeps the monthly invoice predictable.
Worked Example: One Mid Level Developer
The example is an illustration, not a market quote. It assumes a gross salary of ₹1,25,000 a month, basic pay at 50% of gross (₹62,500), employer contributions paid on top of gross, and a developer outside the ESIC wage limit. The rates come from CorpReady’s summary of EPF and ESIC rules, updated for the ₹25,000 wage ceiling that came into force on 17 September 2026.
| Monthly component | PF on ₹25,000 ceiling | PF on actual basic |
|---|---|---|
| Gross salary | ₹1,25,000 | ₹1,25,000 |
| Employer EPF at 12% | ₹3,000 | ₹7,500 |
| EDLI at 0.5% (ceiling basis) | ₹125 | ₹125 |
| EPF admin at 0.5% (ceiling basis) | ₹125 | ₹125 |
| Gratuity accrual at 4.81% of basic | ₹3,006 | ₹3,006 |
| Employer ESIC | Not applicable (wages above ₹21,000) | Not applicable |
| Employer cost before insurance and fee | ₹1,31,256 | ₹1,35,756 |
| Group health insurance | Per plan chosen | Per plan chosen |
| EOR service fee | From $49 per employee per month | From $49 per employee per month |
How Each Line Works
- Provident fund. The employer pays 12% (3.67% to EPF and 8.33% to EPS), with the employee also paying 12%. The statutory wage ceiling rose from ₹15,000 to ₹25,000 a month on 17 September 2026, so a capped employer pays ₹3,000. Many employers choose to contribute on actual basic, which gives ₹7,500 in this example. The choice is a policy decision and should be fixed in the contract.
- EDLI and admin charges. Both are 0.5% on the ceiling wage, so ₹125 each at the new ceiling. The provider should confirm the exact basis in the quote.
- Gratuity. Fifteen days of wages per completed year works out to about 4.81% of basic. It is accrued monthly as a provision. India’s four labour codes took effect on 21 November 2025, and under them fixed term staff earn gratuity after one year, according to DLA Piper.
- ESIC. The employer rate is 3.25%, but it applies only to wages up to ₹21,000 a month, so it does not reach a typical developer salary.
- Professional tax and TDS. These are deducted from the employee and affect take home pay, not employer cost. Professional tax varies by state and is capped at ₹2,500 a year.
What Moves the Monthly Number
- Gross salary, which depends on city, stack, seniority and the offers in the current market
- The share of gross paid as basic, since PF and gratuity follow basic
- Whether PF is paid on the ceiling or on actual basic
- Health insurance plan, variable pay and joining bonuses
- Equipment, if the EOR supplies it
- The EOR fee model: flat fee, percentage or hybrid
The fee models are compared in EOR pricing models in India, and the wider breakdown of one hire is in the cost of EOR services in India. Current fees are on the pricing page.
EOR Versus Own Entity for One Developer
| Item | Through an EOR | Through an own entity |
|---|---|---|
| Legal employer | The EOR | The company’s Indian subsidiary |
| Payroll and filings | Run by the EOR | Run in house or by a payroll provider |
| Setup | Short | Registration, bank account and labour registrations |
| Monthly cost shape | Salary, contributions and a service fee in one invoice | Salary, contributions, filing costs and fixed overhead |
| Fit | One to a few developers | Larger team with a long plan |
An EOR is the lighter route for a small team. Payroll alone is covered under payroll services in India, and the full employment route under Employer of Record in India.
Checks Before Approving a Quote
- Is PF calculated on the ceiling or on actual basic?
- Is gratuity shown as a monthly accrual or only paid at exit?
- Which insurance plan is included, and who pays for upgrades?
- What is billed once, such as onboarding, and what is billed monthly?
- What are the notice period, exit steps and settlement terms?
- Does the contract assign IP created by the developer to the client?
For the cost across a whole engineering team, see the guide to the cost to hire software engineers in India through an EOR. The hiring steps are in how to hire remote employees in India. Figures here are illustrations and should be confirmed with the provider and a chartered accountant. Wage ceiling source: SCC Online. Source for PF and ESIC rates: CorpReady on EPF and ESIC compliance.
Frequently Asked Questions
What is the monthly cost of a software developer in India through an EOR?
It is the gross salary plus employer contributions, gratuity accrual, insurance and the EOR fee. In the worked example, ₹1,25,000 gross becomes about ₹1,31,000 to ₹1,36,000 before insurance and the fee.
How much is the EOR fee?
EOR Services India charges from $49 per employee per month. The final fee depends on the plan and scope.
Does ESIC apply to a developer?
Generally not. ESIC covers wages up to ₹21,000 a month, and typical developer salaries are above that.
Why does the PF line change between quotes?
Some employers pay PF on the ₹25,000 wage ceiling and others on actual basic. The second option raises the employer cost and the employee’s retirement savings.
Is gratuity a cost during employment?
It is accrued monthly as a provision, at about 4.81% of basic, even though it is paid out only when the employee qualifies. Under the new labour codes, fixed term staff qualify after one year.