🇮🇳Complete India hiring guide

Hiring in India through an EOR (2026)

Here's what you need to know before you hire in India: what it really costs an employer, the employment laws that shape the contract, and how an Employer of Record lets you hire compliantly without opening a local entity. Every figure below is sourced and dated.

19.8%Employer cost on top
₹4,628Minimum wage / mo
12 daysPaid annual leave
Days, not monthsTime to hire via EOR
Robbin Schuchmann
Written by:
Co-Founder at EOR Overview
Last updated: July 12, 2026

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India's employer social security cost lands at 16.25% on top of gross salary, and for that you're covering a provident fund, a pension scheme, deposit-linked insurance, and state health insurance for lower-wage workers. That's a real bundle of statutory protections built into every employment relationship, not optional extras. The labour force here is enormous, over 617 million people, so talent access is rarely the problem. The compliance layer is where foreign employers need to pay attention.

Running payroll through an Employer of Record (EOR) in India means monthly pay cycles, a mandatory 13th-month salary, and 12 days of paid annual leave per year as the statutory floor. The minimum wage sits at 4,628 INR per month at the national reference level, though actual rates vary by state and sector, so your EOR needs to track the right floor for each worker's location. With a 48-hour statutory work week and a retirement age of 58, the framework is well-defined once you know where to look.

India at a glance

The statutory facts that drive a hire in India. Each row shows where the figure comes from and how current it is, so you can trust the number and check it yourself.

Pay & working time

Minimum wageper month₹4,628DatedILOSTAT · 2024
Statutory work week48 hours/weekCurrentStatutory working time (national labour law) · 2024
Payroll cyclemonthlyCurrentPerplexity (AI gap-fill) · 2026
13th-month salarymandatoryCurrentPerplexity (AI gap-fill) · 2026

Employer cost & tax

Employer social securityof gross salary19.8%DatedISSA Country Profiles · 2024
Employee social securitywithheld from pay12.8%DatedISSA Country Profiles · 2024
Corporate tax rate25.2%AgingOECD · 2025

Termination

Notice period4.3 weeksCurrentWorld Bank Employing Workers / B-READY · 2019
Severance pay11.4 weeksCurrentWorld Bank Employing Workers / B-READY · 2019

Leave & time off

Paid annual leave12 daysCurrentPerplexity (AI gap-fill) · 2026
Public holidays17 daysCurrentNational government · 2026
Maternity leave26 weeksCurrentPerplexity (AI gap-fill) · 2026
Paternity leave0 weeksCurrentPerplexity (AI gap-fill) · 2026

Labour market

Retirement age58DatedOECD Pensions at a Glance · 2024
Unemployment rate4.2%AgingWorld Bank Open Data · 2025
GDP per capita$2,695DatedWorld Bank Open Data · 2024
Union density19.8%DatedOECD/AIAS ICTWSS · 2017

What it costs to hire in India

Salary is only part of the bill. On top of gross pay you owe employer social security and statutory contributions. Here's what an example salary of $3,000 a year actually costs you as the employer.

Gross annual salary$3,000
Employer contributions≈ 19.8% of gross+ $593
Total employment cost$3,593
Your EOR handles the filings

Illustrative, based on the employer social-security rate above. An EOR adds its own service fee on top of this total and runs the income-tax withholding and statutory filings, which are withheld from the employee's pay, not paid by you.

The 16.25% employer social security figure in India breaks down into four distinct contributions: 12% for the Employees' Provident Fund (EPF), of which 8.33% routes specifically into the EPS pension scheme; 0.5% for Employees' Deposit Linked Insurance (EDLI); 0.5% in EPF administrative charges; and 3.25% for Employees' State Insurance (ESI), which applies only to employees below the wage ceiling. Each piece has its own rules, and the ESI portion can drop out entirely for higher-earning employees, so the effective rate you pay depends on your specific hire's salary level.

Income tax in India

Income taxPaid by employee · progressive
$0 – $400,0000%
$400,001 – $800,0005%
$800,001 – $1,200,00010%
$1,200,001 – $1,600,00015%
$1,600,001 – $2,000,00020%
$2,000,001 – $2,400,00025%
$2,400,001 +30%
Employer contributions
Social security19.8%
Employee contributions
Social security12.8%

Employment-law essentials

The rules an EOR enforces in your contracts, and the ones most likely to trip you up if you tried to hire in India on your own.

Working time
Statutory work week48 hours/week
Pay & 13th salary
Minimum wage₹4,628
Payroll cyclemonthly
13th-month salarymandatory
Leave
Paid annual leave12 days
Public holidays17 days
Maternity leave26 weeks
Paternity leave0 weeks
Termination
Notice period4.3 weeks
Severance pay11.4 weeks

Statutory minimums shown. Collective agreements or contracts can be more generous; an EOR applies whichever is correct for the role.

Things to watch in India

A few things in India's employment rules catch foreign employers off guard, so it's worth having these on your radar before you hire.

  • Mandatory 13th-month salary. This is not discretionary. Budget for it from day one, because it's a legal obligation, not a bonus you can skip in a slow year.
  • ESI wage ceiling matters. The 3.25% Employees' State Insurance contribution only applies to employees below a certain wage ceiling. If your hire earns above it, ESI drops out of the calculation entirely, which changes your cost model depending on who you're hiring.
  • Severance adds up. At 11.4 weeks of pay, severance in India is meaningful. Factor this into your total cost of employment, especially if you're hiring for roles that may be project-based or short-term.
  • Notice periods are real. The statutory notice period averages around 4.3 weeks, so you can't exit an employment relationship quickly. Plan your offboarding timelines accordingly.

EOR vs. opening your own entity in India

Use an EOR when…
You're hiring one to a handful of people in India.
You want someone working in weeks, not months.
You'd rather not own local payroll, tax and compliance.
You're testing the market before committing.
Open your own entity when…
You're scaling to a large local team long-term.
Per-employee EOR fees outweigh the cost of an entity.
You need full control of local employment and IP.

Choosing an EOR for India

Providers with strong India coverage onboard faster and carry less risk. A shortlist to start from:

EOR
Express Global Employment
FromContact for pricing
Read review

Compare all EOR providers in India

See our ranked best EOR providers in India

Local players in India

EOR and global-employment providers headquartered in India:

Common questions about hiring in India

Common questions about hiring in India through an EOR.

Do I need a legal entity to hire someone in India? +
No. An Employer of Record (EOR) already has a legal entity in India and employs the person on your behalf, so you can hire compliantly without opening your own entity. You manage the day-to-day work; the EOR handles the local contract, payroll, taxes and statutory benefits.
How much does it cost to employ someone in India? +
On top of gross salary, employers in India contribute roughly 19.8% in social security and statutory costs. An EOR adds its own service fee on top of that total employment cost.
What is the minimum wage in India? +
The statutory minimum wage in India is ₹4,628. Pay below this is not permitted, and an EOR will hold contracts to at least this floor.
How hard is it to terminate an employee in India? +
Ending employment in India generally requires a notice period of around 4.3 weeks and severance of about 11.4 weeks, subject to the reason for termination and the employee's tenure. An EOR runs the offboarding in line with local law to limit your risk.
How much paid leave do employees get in India? +
Employees in India are entitled to 12 days of paid annual leave, in addition to public holidays. Statutory leave is one of the entitlements your EOR administers automatically.
About the author
Robbin Schuchmann
Co-Founder at EOR Overview
Robbin is the co-founder of EOR Overview, an independent research site for Employer of Record services. He has been in the international hiring space for over a decade.
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