Archive · 30 Jun 2025
Hiring in India: A Guide for Managing Payroll and Taxes
If you want to hire people in India, there are rules about how you pay them.
You can set up your own company there, or use a company that handles it for you, called an EOR.
You have to pay in Rupees.
Also, you need to take out taxes for things like retirement plans and insurance, and the company has to contribute too.
The rates for taxes depend on how much the person earns, and there are different rules for employees versus independent contractors.
Companies like Remote can help make sure you do everything right.
India is a key destination for international hiring due to its skilled workforce and competitive costs.
Foreign companies can pay employees in India by establishing a local entity, partnering with a global employment partner (EOR), or engaging workers as independent contractors.
Payments to Indian employees must be made in Indian Rupees (INR), with various tax implications.
Employers must make payroll deductions for Employees’ Provident Fund (EPF), Employees’ Pension Scheme (EPS), and Employees’ Deposit Linked Insurance Scheme (EDLI).
Remote's solutions streamline hiring, onboarding, and payment for remote workers in India, whether employees or contractors.
- Who
- Foreign companies looking to hire in India and their employees.
- What
- Information on how to hire and pay employees in India.
- When
- Ongoing, as international companies are increasingly hiring in India.
- Where
- India
- Why
- To provide clarity on the legal and financial aspects of hiring in India.
Employee vs. Contractor
Compliance
Classification of workers
Employee vs. Contractor
In long-term scenarios, it's generally safer to classify the individual as a full-time employee, when the role warrants it.
Compliance
Businesses can pay contractors directly in India, primarily in INR unless the contractor maintains a foreign currency account.
- Payment Currency
- Indian Rupees (INR)
- Tax Regime
- Dual income tax regime (old and new)
- EPF Employer Contribution
- 12% of eligible salary
- ESI Employer Contribution
- 3.25% of gross salary
- EOR
- Employer of Record; handles legal employment on behalf of a foreign company
- TDS Payment Deadline
- 7th of the following month
- EPF/ESI Payment Deadline
- 15th of the following month
