Employer of record in India: cost and rules (2026)

Employing someone in India costs the employer about 5.7% on top of gross salary in statutory contributions, plus an EOR fee of $199 to $699 per month at providers that publish prices ("from" prices). Example: a gross salary of INR 100,000 per month costs INR 105,655 per month (about $1,123) before any EOR fee.

Rates checked: 2026-11-13. For a salaried employee above the state insurance (ESI) pay limit, the employer pays provident fund, pension and insurance contributions on pay up to a statutory ceiling, plus a gratuity accrual based on basic pay. No 13th salary is required by law. The estimate assumes basic pay is half of gross.

Estimates only, not tax, legal or accounting advice. Statutory rates, limits and provider prices change; check the linked sources and ask a qualified adviser before you hire.

Employer contributions in India

Employer contribution	Rate	Base and limits	Source
Employees' Pension Scheme share (EPS, 8.33% of the employer's 12%)	8.33%	basic pay (assumed 50% of gross); capped at INR 25,000/month The statutory wage ceiling rose from 15,000 to 25,000 rupees a month from 17 September 2026 (notification S.O. 5109(E)). The employer's pension share is 8.33% of wages up to the ceiling, so the maximum rose from 1,250 to about 2,083 rupees a month. Wages here mean basic pay plus dearness allowance.	PIB press release: EPFO raises wage ceiling from Rs 15,000 to Rs 25,000
Provident fund share (EPF, 3.67% of the employer's 12%)	3.67%	basic pay (assumed 50% of gross); capped at INR 25,000/month Together with the pension share this makes the employer's 12% (8.33% pension + 3.67% provident fund). The calculator uses the common practice of contributing on the statutory ceiling of 25,000 only. An employer may choose to pay 12% on the full basic pay; that is a company policy choice and would cost more. The 3.67/8.33 split is shown in EPFO's FAQ on the wage-ceiling change.	EPFO FAQ on the revised wage ceiling (S.O. 5109(E), 17 Sept 2026), copy hosted by StaffNews; ceiling also in PIB release PRID 2313790 secondary
Deposit Linked Insurance (EDLI), 0.5%	0.5%	basic pay (assumed 50% of gross); capped at INR 25,000/month Employer pays 0.5% of wages, and EDLI wages now follow the 25,000 ceiling. EPFO's FAQ states that the revised ceiling applies to EPF, EPS and EDLI, and its worked examples show EDLI at 0.5% of wages up to the ceiling. The maximum EDLI insurance benefit was not changed.	EPFO FAQ on the revised wage ceiling (S.O. 5109(E)), copy hosted by StaffNews; PIB release PRID 2313829 confirms EDLI coverage secondary
EPF administrative charges, 0.5%	0.5%	basic pay (assumed 50% of gross); capped at INR 25,000/month 0.5% of wages up to the 25,000 ceiling. EPFO's FAQ worked examples show admin charges at 0.5% of wages. The charge has been 0.5% since 1 June 2018, with a minimum of 500 rupees a month per establishment (not per employee). EDLI admin charges have been waived since 1 April 2017.	EPFO FAQ on the revised wage ceiling (S.O. 5109(E)), copy hosted by StaffNews; CAclubindia on the 2018 rate secondary
Employees' State Insurance (ESI), employer share 3.25%	3.25%	gross pay Only if gross pay is at or below INR 21,000 Employer pays 3.25% (employee 0.75%) since 1 July 2019. Covers employees earning up to 21,000 rupees a month (25,000 for persons with disabilities) in covered establishments, normally those with 10 or more employees. No 2026 change to the limit was found. It rarely matters for a typical remote professional but applies to lower-paid hires.	ESIC: contribution rates
Gratuity accrual (15/26 of monthly wage per year of service, about 4.81%)	4.81% (accrual)	basic pay (assumed 50% of gross) Gratuity is 15 days of wages for each year of service on a 26-day month, which is 15/26/12 of monthly wages. It is paid when the employee leaves after 5 years of continuous service; under the Code on Social Security, fixed-term employees qualify after 1 year, pro rata. Employers with 10 or more staff are covered. The statutory payout ceiling is 20 lakh rupees (a government letter of 3 August 2026, as reported in the press, says it is unchanged; the gazette text was not read). This is an accrual: cash is paid only on leaving after qualifying, so a budget estimate overstates the cash cost for short stays.	PIB factsheet: Code on Social Security 2020 (gratuity for fixed-term employees, section 53; wage definition)

Worked example: INR 100,000 gross per month

Item	Base (INR)	Per month (INR)
Employees' Pension Scheme share (EPS, 8.33% of the employer's 12%)	25,000	2,082
Provident fund share (EPF, 3.67% of the employer's 12%)	25,000	918
Deposit Linked Insurance (EDLI), 0.5%	25,000	125
EPF administrative charges, 0.5%	25,000	125
Gratuity accrual (15/26 of monthly wage per year of service, about 4.81%)	50,000	2,405
Gross salary		100,000
Total employer cost (mandatory items)		105,655

Contractor, EOR or own entity in India

Option	Per month	Per month (USD)	Per year	Notes
Contractor	INR 101,788 to 104,610	$1,082 to $1,112	INR 1,221,452 to 1,255,323	No employer contributions. Misclassification risk. Includes contractor-platform fee range.
Employer of record	INR 124,378 to 171,421	$1,322 to $1,822	INR 1,492,538 to 2,057,054	Salary + statutory costs + EOR fee range.
Own legal entity	INR 105,655	$1,123	INR 1,267,860	Salary + statutory costs. Setup, accounting and legal costs are not estimated.

Contractor

Independent contractors are common in India's IT and services sector and pay their own taxes. A contractor is outside provident fund, ESI and gratuity only if the relationship is genuinely independent. If the person works under the company's control, on fixed hours, for a single client, an Indian authority or court may treat them as an employee. A foreign company can also create a permanent-establishment tax risk in India. Cross-border payments may bring Indian tax withholding or GST duties for the contractor. This is general guidance and has no single official source.

Own entity

The usual vehicle is a private limited company incorporated online through the Ministry of Corporate Affairs SPICe+ form (name, director ID, PAN and TAN in one filing). Commercial incorporation sites report at least 2 directors (one resident in India), at least 2 shareholders and no minimum capital, and 100% foreign ownership is allowed in most sectors. Once it hires, the company must register for provident fund and, if applicable, ESI, and file monthly returns. These facts come from commercial sources, not the MCA itself. Source: taxaj.com

Leave, notice, probation and termination

Annual leave: There is no single national figure. Annual, sick and casual leave and public holidays depend on the state Shops and Establishments Act (or the new Codes' rules) where the office is. No official source was gathered, so no number is given.

Notice

Notice for ordinary resignation or dismissal is set by the employment contract and state shops-and-establishments rules; one to three months is common in practice. For retrenchment under the Industrial Relations Code, written notice or pay in lieu applies. Sources disagree on its length, so no number is given. Source: pwc.in

Probation

Probation is not fixed by one national law; it is set in the appointment letter (three to six months is common). The Central Rules of 8 May 2026 make a written appointment letter with prescribed particulars mandatory. Source: kpmg.com

Termination

Retrenchment of a worker normally requires compensation of 15 days' average pay per completed year of service (a part-year above six months counts as a year). Under the new rules the employer must also pay a further 15 days' last wages into the worker re-skilling fund. Larger employers need government permission for retrenchment or closure. Who counts as a 'worker' rather than a manager varies, so take local advice. Source: kpmg.com

What the calculator simplifies

The provident fund base is set at the statutory ceiling of 25,000 rupees (in force since 17 September 2026; 15,000 before). Employers who contribute 12% on full basic pay pay more; this is not included.
Basic pay is assumed to be 50% of gross. Real basic may be higher, which raises gratuity.
The provident fund admin charge has a minimum of 500 rupees a month per establishment, not per employee; this is ignored.
Professional tax (a state tax, at most 2,500 rupees a year) is withheld from the employee's pay and passed on by the employer. It is not an employer cost and is left out.
Labour Welfare Fund contributions are small fixed state amounts and are not included.
Gratuity is shown as a flat accrual although it is paid only after the qualifying service period.
Statutory bonus is not included because it applies only to staff earning up to 21,000 rupees a month.
No employer health insurance or other cover beyond ESI is included. Maternity and other duties for larger employers are not costed.
Employee-side deductions (employee provident fund 12%, ESI 0.75%, income tax) are not employer costs and are excluded.

EOR provider prices

Provider	EOR price (USD)	Contractor price (USD)	Billing and deposit	Source and checked
Skuad	from $199 Starting price	from $19 Contractor management from $19; agent of record from $99	Not published Not published	price page 2026-11-13
RemotePeople	from $499 EOR Global from $499; a cheaper 'Select' plan from $199 has conditions on country and salary	from $29 Contractor management $29 (the page says per payout in one place and per contractor per month in another)	Not published Not published	price page 2026-11-13
Deel	from $599 Starting price	from $49 Contractor plan from $49; contractor of record from $325	Not published Not published	price page 2026-11-13
G-P (Globalization Partners)	from $599 Starting price	from $39 From $39 per contractor, charged only in months with a paid invoice	Not published Not published	price page 2026-11-13
Remote	from $599 Starting price on annual contracts	from $29 Contractor management $29; Plus (with misclassification protection) $99; contractor of record $325	Annual contracts for EOR No setup fee; a refundable reserve may be required in some cases	price page 2026-11-13
Oyster	from $699 List price; annual billing discount exists (amount not published)	from $29 Global contractors $29 per contractor per month, 30-day free trial	Monthly or annual No setup fee; refundable deposit for EOR employees (amount not published)	price page 2026-11-13
Rippling	Price on request (custom quote)	Price on request	Not published Not published	price page 2026-11-13
Multiplier	not verified Not verified: the pricing page could not be read on the check date; third-party sites quote different figures	Not verified	Not verified Not verified	price page unverified 2026-11-13
Papaya Global	not verified Not verified: the pricing page could not be read on the check date; third-party sites quote different figures	Not verified	Not verified Not verified	price page unverified 2026-11-13

Prices are "from" (starting) prices as shown on each provider's own page, usually per employee per month. What you pay can be higher and depends on country, headcount and contract length. "Not verified" means we could not read the provider's price page on the check date; we show no number rather than a guess. Sorted by price, lowest first; providers without a verified price come last.

Affiliate disclosure: some links to providers may be affiliate links. If you sign up through one, we may be paid at no extra cost to you. Tables are sorted by price, not by what a provider pays us. Read the disclosure.

Calculator for India

FAQ

How much does it cost to employ someone in India?

On top of gross salary, statutory employer costs add about 5.7% at a gross salary of INR 100,000 per month. That is a total of INR 105,655 per month before any EOR fee.

How much does an employer of record cost in India?

Providers with a published price list EOR plans from $199 to $699 per month ("from" prices, checked 2026-11-13). This is on top of salary and the statutory employer costs above. Source

What is the notice period in India?

Is there a probation period in India?

What are the rules on ending employment in India?

Can I hire a contractor instead of an employee in India?

Sources

Rates checked: 2026-11-13.