Employer of Record (EOR) in India
An EOR in India allows businesses to enter the market quickly and help maintain compliance with local laws, all while reducing the overhead costs of establishing a local entity. Atlas HXM offers a seamless EOR service that handles all aspects of employment for workers who already have valid authorization to work in India from payroll processing to compliant administration.
Partner with Atlas HXM for a cost-effective, compliant solution to hire and manage your workforce in India.
Quick Overview of EOR in India
Expanding into India doesn't have to mean drowning in paperwork or hefty setup costs. With an Employer of Record (EOR), you can bypass the complexities of local regulations and quickly hire employees, all while maintaining compliance with India's labor laws. From payroll processing and tax compliance to benefits management, an EOR takes care of the legal nitty-gritty like EPF and ESI contributions, so you can focus on growing your business without the need to set up a costly local entity.
The EOR model offers a low-risk, cost-effective alternative to setting up a subsidiary. Establishing a local entity in India can cost anywhere from USD 38,500 to USD 77,000 plus the cost of maintaining human resources (HR), legal assistance, accountants and more. It can also become highly administrative. By partnering with an EOR, you can avoid these setup costs and enter the market faster, avoiding the overhead of a physical office. This is especially beneficial for startups, SMEs, and businesses testing new markets, who need to act quickly and comply with complex local regulations.
How an EOR Works
At Atlas HXM, we provide EOR services that ensure your business remains compliant with India's labor laws while you focus on growing your operations, free from administrative and legal burdens.
Candidate Onboarding
Atlas HXM does not recruit or select candidates, but will check the employment setup for compliance around new hires like validating right-to-work, reviewing contract terms against Indian rules, and configuring payroll and statutory obligations correctly. EOR providers in India, including Atlas HXM, can assist with work permit applications for foreign nationals. Anyone hired via EOR must either already hold valid work authorization or qualify for employment visa sponsorship through the client's requirements.
Employment Contracts
Atlas HXM drafts and administers employment contracts in compliance with Indian labor codes. Clearly outlines Key Employment Terms to reduce risk of future disputes, such as:
Job title and responsibilities
Salary, benefits, and working hours
Leave entitlements and notice periods
Payroll & Benefits Management
Payroll is processed in Indian Rupees (INR), including:
Accurate tax withholdings and EPF/ESI contributions
Statutory benefits
The EOR also helps maintain compliance with mandatory benefits, so employees are protected under India's laws.
Work Permit Compliance
In India, EOR providers can assist with employment visa applications for qualified foreign nationals earning above INR 1,625,000 annually. Atlas HXM manages compliant employment, payroll, EPF, ESI, and statutory obligations in alignment with Ministry of Labour regulations.
Ongoing HR Support
Can provides HR support, including: Leave management and performance tracking and employee relations and regulatory updates throughout the employee's tenure. This allows businesses to focus on core operations, while Atlas HXM handles ongoing compliance.
What to Choose: EOR vs PEO
Work Life in India
India's employment framework is designed to balance operational needs with employee protections. Here's what you need to know:
Employment Types:
Permanent: Ongoing employment with full statutory benefits.
Fixed-Term: Hired for a specific project or defined duration of at least 6 months .
Probation Periods: In India, probation periods are typically 3 to 6 months for permanent employees. These periods allow employers to assess employee suitability before offering permanent employment. Employment can be terminated with 30 days’ notice during probation, and the EOR ensures that all terms are compliant with Indian labor codes.
Working Hours & Overtime: In India, the maximum standard workweek is 48 hours, with a maximum of 8 hours per day and 6 days per week. Employees must receive a break of at least 30 minutes after working continuously for five hours. For eligible employees covered by labor codes, overtime is paid at 2x the basic hourly rate.
Leave Entitlements
Leave Type | Eligibility / Duration | Payment / Notes |
|---|---|---|
Annual Leave | A minimum of 15 business days per year, after 240 days of continuous service | Paid by employer; up to 45 days carry-over in Delhi, India |
Maternity Leave | 26 weeks for the first and second child; 12 weeks for the third child onwards | 100% wages paid by employer |
Paternity Leave | Not regulated in the private sector 15 days (government employees) | Varies by company policy for private sector |
Sick Leave | 12 days in Delhi India, subject to industry and other regulation | As per company policy and state laws |
Public Holidays | Three mandatory holidays on Republic Day (Jan 26), Independence Day (Aug 15) and Mahatma Gandhi’s Birthday (2 Oct); other floating public holidays are to be agreed with the employee | Paid; handled by Atlas HXM |
Vacation Leave | As per company policy / statutory minimum | Paid; unused leave typically paid out upon termination |
Payroll & Benefits: Wages are calculated based on skills and local regulations, with minimum wage varying by state. Atlas HXM manages payroll in INR, EPF/ESI contributions (employer and employee), statutory benefits, bonuses, and group health insurance. Supplemental benefits can include life insurance, flexible benefits, and professional development options.
Atlas HXM can help you manage these aspects and can help ensure that employees are supported and compliant with India's labor laws while businesses can focus on operations without administrative burdens.
What to Choose: Indirect vs Direct EOR
Taxes & Compliance
India operates on a financial year from April 1 to March 31. Employers must submit monthly EPF contributions by the 15th of the following month, ESI returns by the 15th, and provide Form 16 (tax certificate) by May 31. Income tax returns are due by July 31 for individuals and September 30 for companies, with quarterly advance tax payments due on June 15, September 15, December 15, and March 15.
Category | Details |
|---|---|
Employer Payroll Tax | EPF contributions: 3.67%–12% (salary-dependent)
|
Employee Payroll Tax | Residents: progressive income tax 0%–30%
|
Pension System (EPF/NPS) | Mandatory EPF for organizations with 20+ employees
|
GST & EOR Costs: India applies an 18% Goods and Services Tax on EOR services. This GST is typically added to the EOR service charges and can be claimed as input tax credit by eligible businesses.
Atlas HXM handles tax compliance, including progressive income tax calculations, EPF/ESI contributions, year-end filings, and expatriate tax planning, ensuring businesses remain compliant with local laws while minimizing administrative burden.
Termination
Termination must be with just cause, as at-will termination is not recognised in India. Employees must give written notice for termination or payment in lieu of notice, with statutory minimum notice periods ranging from 30 days to 3 months depending on establishment size and employee category, and subject to contract. Severance pay includes retrenchment compensation (15 days' wages per year of service), gratuity (15 days' wages per year for 5+ years service, capped at INR 2,000,000), and leave encashment. Ex-gratia payment is optional. The EOR helps ensure proper handling of terminations, including notice periods, final wages, and required documentation.
Visas & Work Permits
In India, foreign nationals must hold valid work authorization such as an Employment Visa, Business Visa, or other appropriate visa categories depending on their role and purpose.
EOR providers, including Atlas HXM, can assist with employment visa applications for qualified foreign nationals. To be employed through an EOR, foreign employees must earn at least INR 1,625,000 annually (except for specific categories like ethnic cooks, language teachers, and embassy staff). Once authorization is in place, Atlas HXM can employ the individual under the EOR model and then manage payroll, EPF, ESI, benefits, and compliant employment administration.
5 Things to Look for in an EOR Provider
Local expertise and knowledge of labor codes, EPF/ESI contributions, and Ministry of Labour requirements.
Advanced technology for payroll, reporting, and HR system integration.
Experience in your industry and handling employment visa management.
Strong compliance track record and relationships with government agencies and legal advisors.
Global presence to support multi-country expansion, with verified security and compliance standards (ISO 27001/27017/27018, GDPR).
Atlas HXM provides direct EOR services, managing payroll, compliance and benefits efficiently. Our unified platform automates HR, payroll, and compliance tasks, while offering premium employee support, global benefits, and access to 9,000+ learning courses. Recognized by Everest Group PEAK Matrix 2025 and NelsonHall NEAT Assessment 2026, Atlas HXM combines compliance, technology, and global expertise.
FAQs
Can an EOR in India manage employees who already have valid work authorization?
Yes. Once authorization is already in place, Atlas HXM can employ and manage the worker under the EOR model, including payroll, EPF, ESI, benefits and compliant administration.
What is the minimum salary requirement for foreign employees in India?
Foreign nationals on Employment visas must earn at least INR 1,625,000 annually, except for specific categories like ethnic cooks, language teachers, and embassy staff.
What is the typical probation period in India?
Usually 3 to 6 months (extendable by 3 months) and must be specified in the employment contract.
How much notice is required for termination in India?
Notice depends on establishment size: 30 days (50+ employees) to 3 months (300+ employees), unless otherwise stated in contract.
What are the EPF contribution rates for employers in India?
Rates vary by salary: 3.67% (basic salary ≤ INR 15,000), 12% (basic salary > INR 15,000).
Can employees work overtime without limits in India?
Overtime is regulated with specific payment requirements at 2x the basic rate for eligible employees, and requires employee consent.