India

There are four main ways to hire in India. You can use HQ payroll for short-term cases, engage contractors for genuinely independent work, set up a local entity for full control, or partner with an Employer of Record. Each option varies in compliance, cost, and complexity. Many companies choose an EOR to hire employees in India compliantly without managing local registrations or ongoing legal requirements. 

Generally, the process of registering a company in India can take several weeks, depending on the complexity of the company structure, approvals from different authorities, and the completeness of filings.

However, the difficult part comes after the initial setup. Once a company is registered, it must comply with extensive ongoing obligations: registering employees with social security schemes such as the Employees’ Provident Fund (EPF) and Employees’ State Insurance (ESI), providing statutory benefits like gratuity and paid leave, ensuring compliance with state-specific Shops & Establishments laws, deducting and remitting income tax (TDS), and maintaining statutory registers and filings. Employers must also keep up with evolving regulations across India’s states, which can add significant administrative burden.

Contractors work well in India when the relationship is project-based and the person serves multiple clients. If an individual works full-time and exclusively for your company, Indian courts may treat them as an employee regardless of the contract, looking at supervision, integration, and control. For project-based contractor engagements, Boundless’s Agent of Record (AOR) service handles classification, contracts, and payments compliantly in India.

HR compliance in India means your policies, contracts, and practices align with Indian labour laws and state-level regulations. It covers working hours, timely wages, Provident Fund and ESI contributions, statutory benefits like gratuity and maternity leave, and state-specific rules under Shops & Establishments Acts. Getting it right protects employees’ rights, reduces employer risk, and supports smooth business operation.

Employing in India involves statutory contributions on top of gross salary. Key employer costs include Employees’ Provident Fund (12% of basic + DA), Employees’ State Insurance (3.25% of gross wages for those earning up to ₹21,000/month), gratuity accrual of around 4.81%, and smaller EDLI, admin, and Labour Welfare Fund contributions. Totals depend on wage level, employee eligibility, and state-specific rules.

An Employer of Record is the legal employer of the individual in India for government, tax, and employment purposes. It provides a locally compliant contract, runs payroll, files employment taxes, and manages statutory benefits such as up to 26 weeks’ maternity leave and Provident Fund enrolment. You remain responsible for sourcing workers, managing their day-to-day work, and funding payroll each cycle. 

Boundless as the Employer of Record files all pertinent taxes and social security contributions as they relate to the compliant employment of an individual in their home country.

Boundless partners with employment lawyers and advisers in each country we operate in, including India. They ensure employment contracts and onboarding documents comply with local jurisdiction, including state-level requirements. We hold detailed discussions on specific norms such as payroll, social protection, data protection, notice periods, and work-from-home regulations. When a sensitive issue arises, our internal team engages the relevant firm promptly.

The company remains responsible and informs employees of the day-to-day management of the people and teams employed through Boundless, including any disciplinary or performance issues. Boundless ensures compliance with India-specific procedures, practices, and labour laws while employing people and teams on behalf of the company.

Both employers and employees have statutory obligations on top of salary. Employers pay Provident Fund (12% of basic + DA), Employees’ State Insurance (3.25% of gross, for those earning up to ₹21,000/month), EDLI, admin charges, gratuity accrual (~4.81%), and a statutory bonus where applicable. Employees pay 12% EPF, 0.75% ESI if eligible, state professional tax, and income tax on a progressive scale.