Employer of record in India: costs and rules for 2026

What makes hiring in India different

India's four labor codes took effect on November 21, 2025, and most of the rules that move cost changed with them.

• The 50% wages rule. If allowances excluded from "wages" add up to more than half of total pay, the excess is added back. A salary built on a small basic pay no longer shrinks the base for PF, gratuity and bonus.
• Provident fund at the new ceiling. The employer pays 12% of wages up to Rs 25,000 a month: 8.33% to the pension fund (now up to Rs 2,083 a month, from Rs 1,250) and 3.67% to the worker's EPF account, plus 0.5% EDLI insurance. Employers may choose to contribute on full wages, which costs far more.
• Gratuity is a real liability. 15 days of wages per completed year, payable after 5 years, or after 1 year for fixed-term employees, within 30 days of leaving, capped at Rs 20 lakh.
• Low-wage extras. ESIC (3.25% employer) and the statutory bonus of 8.33% to 20% apply only up to Rs 21,000 a month, so most professional hires are out of scope.
• Pay timing is strict. Monthly wages are due by the end of the 7th day of the next month, and all dues within 2 working days of resignation or dismissal.
• Retrenchment costs 15 days' average pay per completed year, plus 15 days' wages paid into the Worker Re-Skilling Fund. Establishments with 50 to 299 workers give one month's notice; 300 or more need three months and government permission.
• Hours: 48 a week, overtime at twice the normal wage. Paid annual leave starts once a worker has 180 days in the year. States add Professional Tax of up to Rs 2,500 a year, withheld from the employee.

We have not yet confirmed India's minimum wage rates, public holiday count or probation rules from an official source. Check the state government where your hire works, or ask the EOR to cite them.

Employment costs and rules in India

What an EOR charges to employ someone in India

Cost of one employee in India, in rupees and dollars

The sample is a senior engineer or manager on INR 316,667 a month. The cash remitted each month is small because PF stops at the ceiling; gratuity is the bigger number, and it is owed at exit rather than paid monthly.

Try a different salary in the international hiring cost calculator, or see how India ranks in the EOR cost index by country.

An Indian subsidiary or an EOR

The statutory costs above are the same either way. What you avoid with your own entity is the EOR fee, INR 682,572.48 ($7,188) a year per person at $599 a month, which is 17.96% of this sample salary. What you take on is EPFO and ESIC registration, state Professional Tax, the labor code registers and appointment letters. The EOR or own entity comparison covers break-even headcount, and permanent establishment risk matters if your Indian staff close sales.

Contractor or employee in India?

Indian candidates increasingly say either works: October 2026 Hacker News job posts from India read "Contractor or EOR both work". The trade-off is cost against risk. A contractor saves the 3.39% and the EOR fee, but a full-time, exclusive role run like a job is hard to defend as contracting, and gratuity after one year applies to fixed-term staff now, so short contracts no longer dodge it. Pay real freelancers through contractor management software, or use a contractor of record if you want the classification risk carried for you.

Choosing an EOR for India

Our scores put Multiplier first (79/100) and Oyster second (64/100) among EORs; the EOR ranking has the rest.

• Multiplier ($459 a month annual, $499 monthly) had the freshest India page we read: updated October 15, 2026, with the Rs 25,000 ceiling and the labor codes.
• Oyster ($699) charges no setup or termination fee; its deposit is at least one month of total service cost under its terms (its pricing page, in the fee table, gives no amount).
• Remote ($599 on its pricing page) shows employer PF at 0.00% on its India explorer page, with income tax tables at 0% as placeholders, and leaves out ESIC, gratuity and bonus. Read our Remote review before relying on its cost tables. Deel's guide could not be checked; our Deel review covers its terms, and the Oyster review covers late-pay complaints.
• Playroll asks one month's salary as deposit: INR 316,667 here.

Ask each provider in writing whether it pays PF on the ceiling or on full wages, how it accrues gratuity, and whether the fee is billed in USD or INR.