India, officially the Republic of India, is the second-most populous country in the world. It covers an area of 3.29 million square kilometers. The country is surrounded by the Bay of Bengal in the east, the Arabian Sea in the west, and the Indian Ocean in the south. India occupies a major portion of the South Asian subcontinent. There are 28 states and eight Union territories in the country. The agricultural sector remains the country’s main employer. However, it is no longer the largest contributor to GDP. Major growth has been in trade, finance, and other services.
For global companies looking to hire in India or hire employees in India, the country offers a vast, skilled, and cost-effective talent pool across technology, finance, operations, and services.
*Please note that the official currency is the currency of remuneration when employed through WorkMotion in India.
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Fast-track your talent onboarding while ensuring 100% compliance with local regulations. using an Employer of Record in India
Calculate net salary post deductions and compare it with the salary in other countries instantly.
Receive process support by an experienced team of experts & pay your talent on time and in their local currency, ideal for companies looking to hire employees or contractors in India
Easily onboard your remote talent in India through our Employer of Record (EOR) solution. Our subsidiaries and network partners make this process fast and 100% compliant.
India, officially the Republic of India, is the second-most populous country in the world. It covers an area of 3.29 million square kilometers. The country is surrounded by the Bay of Bengal in the east, the Arabian Sea in the west, and the Indian Ocean in the south. India occupies a major portion of the South Asian subcontinent. There are 28 states and eight Union territories in the country. The agricultural sector remains the country’s main employer. However, it is no longer the largest contributor to GDP. Major growth has been in trade, finance, and other services.
For global companies looking to hire in India or hire employees in India, the country offers a vast, skilled, and cost-effective talent pool across technology, finance, operations, and services.
*Please note that the official currency is the currency of remuneration when employed through WorkMotion in India.
The national holidays mentioned below are valid for the year 2026 and are critical for hiring in India planning:
Workers are entitled to paid holidays for National and Public holidays (often called “festival holidays”). The total number of paid holidays depends on the specific Shops and Establishments Act governed by the state. Pay on holidays also varies depending on the specific Shops and Establishment Act.
The table below shows the public holidays observed by WorkMotion India.
The holidays mentioned below are valid for the year 2026.
| January 15 | Makara Sankranti (Uttarayana Punyakala) | Movable |
| January 26 | Republic Day | National Holiday |
| March 4 | Holi | Movable |
| April 3 | Good Friday | Movable |
| May 1 | May Day | |
| May 27 | Eid uz Zuha | |
| October 2 | Gandhi Jayanti | National Holiday |
| October 21 | Dussehra (Vijay Dashami) | Movable |
| November 10 | Deepavali | Movable |
| December 25 | Christmas | Public Holiday |
The approximate time for sharing the contract with an employee in India is 2 business days assuming no special requests or changes to our standard employment contract. Any such requests or changes would need to undergo internal and external review, directly leading to a time delay.
This fast turnaround helps companies quickly hire remote talent from India and scale teams without operational friction.
NOTE: This number is subject to change and is only an estimation of the Contract Sharing Time. The estimated Contract Sharing Time begins from the moment that WorkMotion has received all required information from both the client and the employee.
Both the employer and the employee are required to contribute 12% to the Employee’s Provident Fund respectively. Yet, the employer must withhold the contributions for both parties and deposit the contributions (total of 24%) to the Provident Fund by the 15th day of the following month.
NOTE: Contributions to the Provident Fund are paid based on a maximum wage ceiling of Rs.15,000.
Using an Employer of Record India model ensures these benefits are administered accurately while enabling companies to confidently hire remote employees from India at scale.
The full contribution breakdown is as follows:
The normal working hours and days for the employee must be clearly stated and included in the employment contracts. Usually, the Shops and Establishment Acts (SEAs) of different states provide provisions for working hours for the private sector.
Any hours that are worked above the contractually defined normal working hours are considered overtime.
The employer should pay the employee for work on any day in excess of the number of hours constituting a normal working day, at not less than twice the normal wages, for every hour or for part of an hour so worked in excess.
Probation is not mandatory. The common practice is three to six months depending on the seniority of the position.
There are both national-level and state-level regulations. The common practice is to give 30 days’ notice. For senior positions, the notice period is up to 90 days. However, the notice period can be shortened via mutual agreement.
The normal working hours and days for the employee must be clearly stated and included in the employment contracts. Usually, the Shops and Establishment Acts (SEAs) of different states provide provisions for working hours for the private sector.
Any hours that are worked above the contractually defined normal working hours are considered overtime.
The employer should pay the employee for work on any day in excess of the number of hours constituting a normal working day, at not less than twice the normal wages, for every hour or for part of an hour so worked in excess.
Probation is not mandatory. The common practice is three to six months depending on the seniority of the position.
There are both national-level and state-level regulations. The common practice is to give 30 days’ notice. For senior positions, the notice period is up to 90 days. However, the notice period can be shortened via mutual agreement.
Both the employer and the employee are required to contribute 12% to the Employee’s Provident Fund respectively. Yet, the employer must withhold the contributions for both parties and deposit the contributions (total of 24%) to the Provident Fund by the 15th day of the following month.
NOTE: Contributions to the Provident Fund are paid based on a maximum wage ceiling of Rs.15,000.
Using an Employer of Record India model ensures these benefits are administered accurately while enabling companies to confidently hire remote employees from India at scale.
The full contribution breakdown is as follows:
Benefits
Employer Contribution
Maximum Base
WorkMotion operates through its own entity in India, acting as the legal employer on your behalf.
This means your company can hire compliantly without incorporating a subsidiary, managing statutory registrations, or building local HR infrastructure from scratch.
WorkMotion generates an employment contract aligned with Indian labour law, covering:
In addition to these, India’s employment framework draws on multiple central and state-level laws, including the Code on Wages, the Industrial Relations Code, and the Social Security Code.
Contracts are drafted in English and reflect the applicable requirements for the state where your employee is based, since key obligations – particularly under the Shops and Establishments Act – vary by location.
Before your employee’s first day, WorkMotion handles the registrations required to legally employ them.
This includes state-level Shops and Establishments Act registration, which is mandatory for commercial operations in each state where employees work and must be completed within 30 days of commencing operations.
WorkMotion configures payroll in Indian Rupees (INR) and enrols your employee in the mandatory statutory schemes.
This includes Employees’ Provident Fund (EPF) registration with the EPFO — required for organizations with 20 or more employees — and Employee State Insurance (ESI) enrollment for eligible employees.
Employer contributions include:
Professional Tax obligations are also calculated and remitted based on the employee’s state of residence.
WorkMotion administers the statutory benefits your employee is entitled to under Indian law:
Where relevant, WorkMotion can also support supplementary benefits such as group health insurance, which is increasingly expected by mid-level and senior hires in India’s technology and services sectors.
Each month, WorkMotion runs payroll, calculates Tax Deducted at Source (TDS) based on the employee’s applicable income tax slab, and remits all statutory contributions — EPF, ESI, and Professional Tax — to the relevant authorities on time.
Payslips reflect all deductions transparently. Late or inaccurate PF filings carry daily penalties under Indian law.
India’s labour laws are always evolving.
As mentioned, the four consolidated Labour Codes — covering wages, industrial relations, social security, and occupational safety — have received Presidential assent, and state-level implementation rules continue to be notified.
WorkMotion monitors regulatory updates and adjusts employment terms, contribution rates, and statutory entitlements accordingly.
Your contracts and payroll stay current without your team having to track legislative changes across 28 states and eight Union territories.
To get an estimate of how much hiring an employee in India could cost, use our Employment Cost Calculator.
For most companies hiring their first employees in India, the question isn’t whether to hire – it’s how to do it without a six-month detour into incorporation paperwork.
| Factor | WorkMotion EOR | Setting Up an India Entity |
|---|---|---|
| Setup cost | Per-employee monthly fee, no incorporation costs | Incorporation fees plus ongoing audit, compliance, and accounting costs |
| Time to first hire | Days from signed agreement | 45–60 days for incorporation alone, plus additional time for statutory registrations |
| Ongoing legal exposure | Compliance managed by WorkMotion’s own licensed entity | Directly liable for all labour law, tax, and statutory filing obligations |
| Ongoing admin burden | Payroll, TDS, EPF, ESI, and Professional Tax are all handled by WorkMotion | Internal team or local vendor required for monthly filings, annual returns, and statutory audits |
| Exit flexibility | Scale up or down without structural changes | Winding down an Indian entity is a multi-month legal process |
Using an employer of record (EOR) is the right fit when you’re hiring one to several dozen employees in India and want to move fast without long-term structural commitment.
Entity setup makes more sense when you’re planning sustained operations at scale — typically 50 or more employees — and want full direct control over your Indian legal presence.
WorkMotion’s Direct Hiring solution can support that transition when you’re ready.
India has one of the most layered employment frameworks in Asia. Most compliance gaps aren’t caused by bad intent — they’re caused by assuming Indian labour law works like the rules back home.
The Shops and Establishments Act is not a single national law.
Every state has its own version, with different rules on working hours, leave entitlements, overtime, and record-keeping.
A company hiring employees across Bengaluru, Mumbai, and Hyderabad is subject to three separate state acts simultaneously.
Employers often discover this only after a compliance audit. WorkMotion handles state-specific Shops and Establishments registrations for each location where your employees are based, so the right rules apply from day one.
Indian labour law is strict about who qualifies as an independent contractor.
If someone works exclusively for your company, follows your direction, and operates on your schedule, they are likely classified as an employee under Indian employment law — regardless of what the contract says.
Foreign companies that default to contractor arrangements to avoid entity setup often face backdated statutory liabilities, including unpaid EPF and ESI contributions, once the relationship is scrutinised.
WorkMotion’s Contractor Management service includes mandatory misclassification checks before each onboarding, so you know the engagement structure is defensible.
India prohibits at-will termination.
Ending an employment relationship requires documented performance issues, written warnings, and adherence to proper process – or companies face labour court disputes and potential reinstatement orders.
Employers accustomed to more flexible termination regimes are frequently caught off guard.
Gratuity is a statutory payment owed to employees who have completed five or more years of continuous service, as prescribed under the Payment of Gratuity Act, 1972.
WorkMotion builds gratuity accrual into cost projections from the start, so there are no surprises at the end of an employment relationship.
A B2B SaaS company headquartered in Germany or the Netherlands has open roles for senior backend engineers.
Vacancy times in their home market are running at three to four months. India’s technology talent pool — particularly in Bengaluru, Hyderabad, and Pune — offers strong depth in the exact specialisations they need.
A Series B fintech or healthtech company based in London or New York wants to build a 10-person operations or customer success team in India to extend coverage hours and reduce cost-per-hire.
They need a compliant employment structure, not a contractor arrangement that creates classification risk.
WorkMotion’s EOR solution in India provides the legal employment layer — contracts, payroll, EPF, ESI, and TDS — so the company can focus on onboarding and managing the team rather than navigating Indian labour law.
A 50–150-person company from the DACH region is evaluating India as a long-term market.
Before committing to a subsidiary – with its 45–60 day incorporation timeline and ongoing audit and compliance obligations – they want to hire a local sales or business development lead to test the opportunity.
WorkMotion’s EOR service in India lets them make that first hire compliantly, with a clear path to Direct Hiring if and when the market justifies a permanent structure.
India offers one of the world’s deepest talent pools for technology, finance, operations, and services roles. However, hiring compliantly without a local entity requires navigating complex employment laws, multiple statutory contribution schemes, and an evolving regulatory framework.
WorkMotion operates through its own entity in India, handling contracts, payroll in INR, EPF, ESI, TDS, and ongoing compliance monitoring so your company doesn’t have to.
Your first hire can be onboarded in days, not months — with no subsidiary setup, no local payroll vendor, and no compliance gaps.
Ready to hire your first employee in India? Book a Demo Today
WorkMotion operates through its own entity in India, acting as the legal employer on your behalf. This means your employees are hired directly through WorkMotion’s Indian entity — not routed through a third-party intermediary — giving you direct compliance accountability and a single point of responsibility for contracts, payroll, and statutory obligations.
India does not have a single national employment act governing day-to-day working conditions. Each state operates its own version of the Shops and Establishments Act, with different rules on working hours, leave entitlements, and record-keeping — meaning a company with employees in Bengaluru, Mumbai, and Hyderabad is subject to three separate regulatory frameworks simultaneously.
WorkMotion handles state-specific registrations and ensures the correct rules apply for each employee’s location from day one, without your team needing to track obligations across multiple jurisdictions.
As the legal employer, WorkMotion calculates and remits all mandatory statutory contributions on your behalf. These include employer contributions of 12% of basic salary toward the Employees’ Provident Fund (EPF), 3.25% of gross salary toward Employee State Insurance (ESI), gratuity accrual of 4.81% of basic salary (payable after five years of continuous service), and Professional Tax, which varies by state. Tax Deducted at Source (TDS) is also calculated monthly based on each employee’s applicable income tax slab and remitted to the relevant authorities on time.
Both fixed-term and open-ended employment contracts are legally recognized in India, and the appropriate structure depends on the nature of the role and applicable state-level rules.
However, India prohibits at-will termination for open-ended employees — ending an employment relationship requires documented grounds, written warnings, and adherence to proper process, or companies risk labor court disputes and potential reinstatement orders. WorkMotion ensures the contract type and termination provisions are aligned with Indian legal requirements for your specific situation.
Gratuity under the Payment of Gratuity Act, 1972 is only payable to employees who complete five or more years of continuous service, so no gratuity obligation arises if an employee leaves before that threshold. However, WorkMotion builds gratuity accrual into employment cost projections from the start — at 4.81% of basic salary — so your finance team has an accurate picture of the total cost of employment over the expected tenure, with no unexpected liability at the point of offboarding.
When comparing EOR companies in India, the most important factors are whether the provider operates through its own licensed entity (rather than a third-party partner network), how they handle state-specific compliance across multiple locations, and whether their service model includes dedicated support for both your HR team and your employees.
WorkMotion operates through its own entity in India, provides expert-led support with dedicated Customer Success Managers, and holds IEC Gold Compliance Certification — independently audited across 1,000+ checkpoints covering licensing, employment law, payroll, data protection, and more.
Discover how WorkMotion helps you hire anywhere, stay compliant, and manage global teams with ease.
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