Hire in India

Employer of Record(EOR) in India

India Workforce Unlocked: How Employer of Record Makes Hiring Easy

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At a Glance

Capital City
New Delhi
ChaadHR entity
English, Hindi, and 22 Regional Languages


Hire employees
$599.00 / month
Hire contractors
$49.00 / month


India’s developing economy has led to the country’s success in the global market. They are projected to be one of the world’s most significant economic powers due to their successful partnerships and investments. Since the 2000s, their upward economic trajectory has lifted more than 90 million citizens from poverty and has provided jobs for the working population.

Major economic hubs:

New Delhi, Mumbai, Calcutta, Chennai

Skills in demand :

AI, Networking Development,  Algorithm Designer, Cloud Computing, UI Designer, Coding And Software Skills

Public and Provincial Holidays

Employee Leaves


Resident Tax Information

All resident and non-resident employees' income will be subject to income tax.

Income tax rates applicable to employees' compensation in India are progressive in nature. For this reason, executives in India are taxed at the highest rate.

The Indian Finance Minister introduced a new tax regime in the Union Budget, 2020. With the introduction of the new income tax regime, individuals and Hindu Undivided Families (HUF) can pay lower income taxes without claiming deductions.

The following is the income tax slab rates are notified in the new tax regime vs old tax regime:

Although the new tax regime slab rates do not differentiate individuals based on age  group, under the old tax regime, the basic income threshold is an exemption for  

  • Senior citizens with an income between the ages 60 to 80 years  
  • Senior citizens above 80 years with salaries between ₹ 3 lakh and ₹ 5 lakh

Social Security

The Indian social security is divided by the government into 7 areas that include:

  1. Healthcare and Insurance
  2. Life and Disability Insurance
  3. Food Security
  4. Old age and Retirement Benefits
  5. Maternity and Childcare Benefits
  6. Unemployment Insurance06 Rural job guarantee

To distribute state welfare measures in India, the Indian government uses the unique identity number (Aadhar) that every Indian possesses.

The most extensive employment-related social security programs backed by The Code On

Social Security, 2020 are

  • National Pension System (NPS) and Employees' Provident Fund Organisation (EPFO) for retirement pension
  • Provident fund
  • Life and disability insurance
  • Employees' State Insurance for unemployment and healthcare benefits, and sick pay

The National Food Security Act, 2013, which assures food security to all Indians, is funded through general taxation.

These are gratuity, healthcare, retirement, disability, childcare, and provident insurance programs governed mainly by The Code On Social Security, 2020, which are mandatory for all Indian and foreign employees working in India.

Statutory Benefits

The statutory benefits in India include retirement, healthcare, disability, childcare, gratuity,  and provident insurance programs governed mainly by The Code On Social Security, 2020,  most of which are mandatory for all Indian and foreign employees working in India.  

Each of the compulsory employee benefits is discussed in detail below:

Employee State Insurance

Employees' State Insurance (ESI) is a health insurance fund and social security for Indian  employees. As per the ESI Act 1948, the Employees' State Insurance Corporation (ESIC)  administers and manages the fund.  

It is mandatory for employers to enroll their employees and contribute toward the ESIC fund. Employers must ensure the following contributions for all employees earning ₹21,000 (US$280) or less per month:

3.25% ( Employer’s Contribution )+0.75% ( Employee’s Contribution ) = 4% (Total Share)

All employees registered under ESIC are entitled to

  • Medical treatment for themselves and their dependents
  • Unemployment benefit
  • Sick pay  
  • Maternity benefit

In case of employment-related death or disability, ESIC provides for disablement benefits  and a family pension, respectively

National Health Insurances

National Health Insurance is a health insurance fund with coverage that includes 3 days of  pre-hospitalization and 15 days of post-hospitalization expenses. The national health  insurance also covers 1,400 procedures and related costs, including OT expenses. The  central government monitors the national health insurance under 'Ayushman Bharat  Yojana.

An e-card under the National Health Insurance provides Rs. 5 lakh ($6860) of insurance  coverage per family per year.

Maternity Benefits

All women employees are entitled to fully paid maternity leave of 26 weeks, as laid out  under the Social Security Code, 2020.

Employees requesting maternity benefits can avail of this benefit for  

  • A maximum period of 8 weeks before the expected delivery date
  • 18 weeks after childbirth

Pension and Retirement Benefits

There are currently two organizations that the Government of India regulates as a part of  pension and retirement benefits for employees that include:

The National Pension Scheme

To qualify for a pension under the National Pension Scheme (NPS),

  • The individual must have been in service for at least ten years
  • The individual must be at least 58 years old to qualify for pension
  • The monthly retired pension an employee receives is 50% x (last salary)

Fringe Benefits

Fringe benefits in India are considered as part of an employees' salary:  

  • For payroll purposes
  • The basis for calculating employees' labor rights

Fringe benefits commonly provided to employees in India are

  • Culture vouchers
  • Reimbursement of expenses
  • Housing
  • Private life, health, and dental insurance
  • Office equipment such as laptops/ desktops
  • Superannuation contribution
  • Vehicle used for work
  • Meal or food vouchers  
  • Private pension plans
  • Employees' education costs

Fringe benefits in India that are considered a part of an employee's salary include:

Subsidized transportation in all metropolitan cities

  • Subsidized cafeterias
  • Flexible Benefits: work from home, hybrid working models, office setup at home, flexible work timing, etc.
  • Company credit cards: Corporate credit cards are commonly offered to senior management in India, especially employees who travel extensively on business

Although it is common practice in India to grant some of the benefits listed above to  executives, it is also provided to employees under several other departments such as  marketing and sales. This is because it is a requirement that employees are provided the benefits to performing their job efficiently while complying with the ‘special tax treatment’.  

Fringe benefits are taxed as a part of the employee’s compensation in the form of income tax. The tax varies depending on the income tax brackets the employee falls under

Exempt Benefits

The exempt benefits in India (both old and new regimes) are as follows:

  • Deductions under 80C
  • Standard Deduction (Medical & Travel Allowance)
  • HRA deduction as per section 10(13A)
  • Agriculture Income

Long-term Incentives

When hiring an executive, employers should ask if the executive is classified as an  employee under Indian laws.  

The response will determine the payroll costs and whether the executive will be entitled to  mandatory labor rights.  

The mandatory long-term incentives listed in the above chart include market practice benefits such as

Private Insurance Plans

There has been an increase in employers providing private insurance plans that include

  • Group Medical Insurance  
  • Dental Insurance Group  
  • Personal Accident Insurance
  • Group Term Life Insurance

Business Travel Accident

Group Business Travel Accident policies an employer can provide can include  

  • Accidental insurance
  • Travel inconvenience benefits during business trips
  • Medical insurance  
  • Personal liability benefits
  • Death benefits

A Certificate of Insurance is commonly issued to any employee traveling for each work trip, although the duration of such trip should not exceed 180 days. These policies are a must, especially for an employee traveling internationally to obtain a visa from some embassies.

Employee Income Protection Plans

Prudent introduced a short-term disability or employee income protection plan in the Indian market in October 2021. This plan provides an aggregate limit of 3 months’ pay per employee who faces the loss of pay due to defined medical contingencies leading to hospitalization.  

For leaves opted due to a spouse’s illness, the monthly payment is restricted to 50% of the eligible amount. A minimum group size of 1,000 lives is required to offer this plan.  

Long-term benefits such as employee stock options are offered to executives or startups.  

Their compensations may be too massive to be delivered in cash or as a motivating benefit to align with its objective.  

Therefore, it is common for employees in India who hold strategic management positions (such as members of the executive officers, board of directors, general managers, or high level managers) and non-employed statutory officers to be offered participation in an employee stock option plan.  

Thus they are provided in the form of stocks and equity in India, which include the following:

  • Employee Stock Option Scheme (ESOS)
  • Employee Stock Purchase Plan (ESPP)
  • Restricted Stock Units (RSU)
  • Stock Appreciation Rights (SARs)
  • Phantom Stocks

Termination/Severance in India

Termination Process

In India, the termination process may vary from one employer to another and mostly follows the terms indicated in the employment contract.

Notice Period

The notice period for employees under probation is up to 30 days. For regular employees, notice period will be up to 3 months.

Severance Pay

Severance Pay in India varies ​​based on duration of employment, performance and salary.

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Autopilot Global Payroll
Streamline payments in more than 70 currencies and manage your worldwide payroll in one location. Put it on autopliot mode and never worry about it again.
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Competitive pricing. We offer different payment plan for SMBs and enenterprises. Get discounts when you hire more.
Speedup Global Expansion
No more sourcing and vetting local vendors for weeks. No more email back and force every payroll periods. We take care of everything in hours.
Third-party Integrations
Have your favorite HR system or accounting software? No problem, we support varies thrid-party intergrations.
Local Expert
We have local experts on the ground, offering in-country support. Your employee are in good hands.
Compliance Ready
We take all responsibility for ensuring that you comply with local regulations when you hire employees through Chaad.
manage your global team

We handle the complexity, so you don't need to.

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Pay your employees in 70+ currencies and take advantage of the best currency rates available. Send global payments with a single click and keep track of your transfers in real time.

150+ countries EOR system

Employer of Record

With our Employer of Record(EOR) network you don't need to set up entities to hire full-time talent abroad. We help you hire in 150+ countries and ensure 100% compliance with local laws.

EOR in 150+ countires
Handle taxes, social contributions
compliance ready System

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We take care of all the details to make sure you comply with local laws, including those related to taxes, social security, the minimum salary, termination regulations, and more.

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Trusted by global businesses and leaders

“ChaadHR is like a global-hiring specialist sitting by our side, and makes hiring globally as smooth as hiring on our local sites. We hire people, present requirements, and ChaadHR covers everything else.”

Yuki Akiyama
HR Director, Bimgoo

“Hiring compliance is always a complicated issue during global hiring. ChaadHR optimized this problem transparently and thoroughly. We no need to worry furthermore, and our employees and contractors also feel comfortable and give us positive feedback about ChaadHR."

Andrew Ellison
Hiring Manager, Wimton Logistics

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