Easily Hire, Manage, and Pay Your Employees in India
RecruitGo's Employer of Record service in India enables employers to hire top Indian talent quickly and compliantly — without the cost and delay of setting up a local entity. You focus on growth; we handle PF, ESI, and state-level labor law compliance.
Why Foreign Companies Hire in India
India is the world's most populous country with 1.4 billion people and the fifth-largest economy globally. The country produces over 1.5 million engineering graduates and 5 million+ university graduates annually, creating the world's largest English-speaking talent pool outside the United States. India dominates global services outsourcing, with its IT and BPO sector generating over USD 250 billion in revenue annually.
For foreign companies, India offers salary costs 70-85% lower than the US or UK, deep expertise in technology, data science, and professional services, a mature remote work culture, and an increasingly favorable regulatory environment. Major tech hubs include Bangalore, Hyderabad, Pune, Chennai, and Delhi NCR. India's four new Labour Codes, implemented in November 2025, aim to simplify compliance.
How RecruitGo Helps You Hire in India
Whether you need to hire without a local entity, run payroll, manage benefits, or understand India's complex state-level compliance, RecruitGo has a service for each stage.
Employer of Record (EOR)
Hire employees across India without registering a local company. RecruitGo handles employment contracts, EPF/ESI registration, TDS withholding, gratuity provisioning, and compliance with both central and state labor laws.
Payroll Service
Already have an Indian entity? We process monthly payroll in INR, calculate TDS, remit EPF and ESI, manage professional tax across states, and handle year-end Form 16 filing.
Employee Benefits
Design benefit packages that meet Indian statutory requirements and compete in India's highly competitive tech talent market.
Visa and Employment
Foreign nationals working in India need an Employment Visa. We guide through FRRO registration, PAN card application, and ongoing compliance.
India Employment Snapshot
India operates a dual central-state system, so some rules vary by state.
| Currency | Indian Rupee (INR) |
| Minimum wage | Set by each state. Delhi: ~INR 18,456/mo (unskilled). Ranges INR 8K-21K+ by state/skill |
| Working hours | 48 hrs/week, 8 hrs/day. Flexible schedules allowed under new codes (up to 12 hrs/day in 4-day week) |
| Overtime | 2x ordinary rate. Max 125 hrs per quarter under new OSHW Code |
| Probation | 3-6 months typical (up to 12 for senior roles). Varies by company and state Shops Act |
| Contract types | Permanent (indefinite), fixed-term (full benefit parity since Nov 2025), contract, consultancy |
| Annual leave | 1 day per 20 days worked or per state Shops Act. Typically 15-24 days by state |
| Sick leave | Varies by state. Typically 7-12 days. ESI covers 70% of wages for up to 91 days |
| Maternity leave | 26 weeks fully paid (first 2 children). 12 weeks for 3rd+. 12 weeks adoption/surrogacy |
| EPF | Employer 12% + Employee 12% of basic + DA. Applies to 20+ employee establishments |
| ESI | Employer 3.25% + Employee 0.75% of gross. Applies if wages up to INR 21,000/mo, 10+ employees |
| Gratuity | 15 days wages per year after 5 years (1 year for fixed-term from Nov 2025). Max INR 25 lakh |
| Professional tax | State-level. Max INR 2,500/year. Not all states levy it |
| Income tax (TDS) | Progressive: 0% (up to INR 4L new regime) to 30%. Monthly TDS by employer |
| Termination | 30-90 days notice. 15 days wages/year retrenchment compensation. 300+ need govt approval |
| Public holidays | 3 national + 7-15 state-declared holidays |
| Language | English standard for private sector contracts |
How to Hire in India as a Foreign Company
Three main options depending on timeline, headcount, and state-level complexity tolerance.
| EOR (RecruitGo) | Indian Pvt Ltd | Contractor | |
|---|---|---|---|
| Time to first hire | 3-5 business days | 4-12 weeks (MCA) | Immediate |
| Setup cost | None | INR 50K-2L+ plus compliance | None |
| Compliance | RecruitGo | You | Contractor's responsibility |
| EPF/ESI | Handled by RecruitGo | Your responsibility | N/A |
| State-level compliance | Managed across all states | You manage per-state | N/A |
| Ideal for | 1-50 employees, testing | 50+, permanent operations | True project work |
India's dual compliance system is the key challenge: Central laws (EPF, ESI, gratuity, maternity) apply nationally, but each state has its own Shops and Establishments Act. Hiring across multiple states requires separate registrations. Through EOR, RecruitGo manages all state-level registrations on your behalf.
Contractor misclassification is high risk: India's new Labour Codes define employment broadly. Reclassification triggers backdated EPF (24% of salary), ESI, gratuity, and potentially criminal penalties for EPFO non-compliance.
Key Employment Rules in India
Provident Fund (EPF)
Applies to 20+ employee establishments. Employer and employee each contribute 12% of basic + DA. Employer's 12% split: 8.33% EPS pension (capped INR 15,000 basic) + 3.67% EPF savings. Plus 0.5% EDLI + admin. Late payment: 12% interest + up to 100% damages.
Employee State Insurance (ESI)
Applies to 10+ employee establishments where any employee earns up to INR 21,000/mo gross. Employer 3.25%, employee 0.75%. Covers medical care, sickness (70% for 91 days), maternity, disability, unemployment. "Once covered, always covered."
Four Labour Codes (Nov 21, 2025)
Consolidated 29 laws into 4 codes: Wages, Industrial Relations, Social Security, Occupational Safety. Key changes: basic pay must be 50%+ of total salary, fixed-term employees get gratuity after 1 year, gig workers recognized, 300+ threshold for layoff approval.
Leave and maternity
26 weeks maternity (first 2 children), 12 weeks for subsequent. Employer pays full salary (ESI reimburses if eligible). Adoptive/surrogate mothers: 12 weeks. No central statutory paternity leave for private sector; most offer 5-15 days.
Termination and gratuity
30-90 days notice. Retrenchment: 15 days wages per year. 300+ employees need govt approval. Gratuity: 15 days wages per year after 5 years (1 year for fixed-term from Nov 2025). Max INR 25 lakh. Full settlement within 2 working days.
What It Costs to Employ Someone in India
Total employer cost is typically 118-130% of gross depending on salary level and state. Primary costs: EPF (12%), ESI (3.25% if applicable), gratuity (4.81%), professional tax.
| Component | Monthly (INR) | Rate |
|---|---|---|
| Gross salary | 80,000 | — |
| EPF (employer) | ~4,800 | 12% of basic (50% = INR 40K) |
| ESI (employer) | N/A | Gross exceeds INR 21K threshold |
| Gratuity provision | ~1,923 | 4.81% of basic |
| EDLI + admin | ~350 | ~0.5% + admin |
| Professional tax (KA) | 200 | INR 200/mo (state-specific) |
| Total employer cost | ~87,273 | ~109% (high salary) |
For employees below INR 21K/mo, ESI (3.25%) applies, raising total to ~125-130%. EPF on basic + DA (must be 50%+ of gross under new codes). Most employers also offer group health insurance, meal allowances, and annual bonuses. EOR fee not included.
Common Questions
What companies ask most about hiring in India.
Yes, through an EOR. RecruitGo is a locally registered Indian Pvt Ltd that legally employs workers on your behalf. We handle contracts, EPF/ESI, TDS, gratuity, professional tax, and compliance with central + state laws. Hire across India in 3-5 days without MCA registration.
EPF: 12% each (employer split: 8.33% EPS + 3.67% EPF + 0.5% EDLI). ESI: 3.25% employer + 0.75% employee on gross up to INR 21K/mo. Total statutory employer cost: ~16-17% for ESI-eligible, ~13-14% for higher salary.
Nov 2025: 29 laws → 4 codes. Basic pay must be 50%+ of total salary. Fixed-term employees get gratuity after 1 year. Gig workers recognized. Retrenchment threshold raised to 300+. Unified wage definition. State rules still rolling out.
26 weeks fully paid (first 2 children), 12 weeks for 3rd+. Employer pays, ESI reimburses if eligible. 12 weeks for adoption/surrogacy. Cannot terminate pregnant employees. 50+ employees must provide creche.
Central laws apply nationally, but each state has its own Shops Act governing registration, hours, leave, overtime. Professional tax varies by state. Multi-state remote teams need separate registrations per state. EOR handles all of this.
Documented cause required. 30-90 days notice. Retrenchment: 15 days wages/year. 300+ employees need govt approval. Full settlement within 2 working days. Wrongful termination goes to Labour Court.
Yes. 15 days wages per year after 5 years (1 year for fixed-term from Nov 2025). Max INR 25 lakh. Must provision from start. Tax-free up to INR 20 lakh for employee.
3-5 business days including contract, EPFO/ESIC registration, TDS setup, state Shops Act registration, onboarding. Own Pvt Ltd: 4-12 weeks for MCA + PAN/TAN + bank + EPFO/ESIC + state registrations.
