This guide highlights the best EOR service providers in India. It covers their services, compliance, and costs. We’ll look at why businesses, from small startups to big multinationals, use EORs. 

Hiring in India is now easier due to Employer of Record (EOR) services. An EOR is a third-party organization. It hires employees for you and manages HR tasks. It also makes sure you follow Indian laws and are able to recruit an Indian workforce without a legal entity in India.

We’ll also look at Remunance, one of the top EOR service providers in India, based in Pune. Then, we’ll compare it to other leading EOR service providers in India. Why use Employer of Record services in India, and we’ll also learn key criteria for choosing the best EOR in India.

What is an EOR in India, and How Does It Work?

An Employer of Record acts as the “legal employer” for your staff. It takes care of all employment tasks in the background. This lets you focus on managing your employees’ daily operations.

The EOR arrangement lets foreign or out-of-state firms hire Indian talent. They do not need to set up a local company. The EOR takes care of employment contracts, payroll, taxes, and compliance with regulations.

In India, an EOR is the legal guardian for your employees. It makes sure all Indian employment rules and labor laws are followed.

How EOR Works: You choose the candidates you want to hire in India. Then, the EOR provider employs them for you. The EOR in India will sign the employment contract with the employee (reflecting your agreed terms), add them to its local payroll, and provide all mandatory benefits (such as provident fund, health insurance, gratuity, etc.). 

The employees work for your company as if they were your own, but legally, they are employees of the EOR. This model is fully legal in India. Companies, big and small, use Indian EOR services. They can hire local talent without the hassle of setting up an entity.

Key Responsibilities of an EOR: The EOR provider handles important HR and admin tasks, such as:

• • Onboarding and Contracts: Drafting and executing compliant employment contracts as per Indian law (covering necessary clauses on wages, termination, IP, etc.).
  • Payroll & Tax Management: Process monthly payroll in INR. Deduct income tax (TDS) and social contributions accurately. This includes Provident Fund (PF) and Employee State Insurance (ESI). Then, deposit these amounts with the authorities.
  • Benefits Administration: Sign up employees for needed benefit programs like PF, ESI, and maternity leave. Also, offer additional benefits such as health insurance and allowances. Make sure no statutory benefit is missed.
  • Compliance & Legal: Follow India’s labor laws. This includes both Central and State laws. This covers minimum wage, working hours, leave policies, gratuity payments, and necessary filings.
  • The EOR keeps up with regulatory changes. They manage mandatory contributions and reports, so you stay 100% compliant.
  • HR Support: Handles daily HR tasks. Manage personnel records, track attendance and leave, and answer local HR questions. Many EORs offer self-service portals. Employees can easily access payslips, apply for leave, and update their information.
  • Termination and Offboarding: When offboarding an employee, the EOR takes care of severance calculations, final payslips, and any required government notifications. This ensures compliance with Indian law to reduce risk.

Good EOR service providers in India let you focus on your team’s productivity and goals. They take care of all the “legal employer” duties. You enjoy the perks of hiring in India’s talent-rich market. 

Why Businesses Use EOR Services in India

Using an Employer of Record offers many benefits. Companies can easily tap into India’s market and workforce. Businesses of all sizes, from startups to big firms, pick EOR services in India for several key reasons:

• • Fast Market Entry & Hiring: An EOR can hire employees in days. This means you can start operations in India right away. In contrast, setting up a subsidiary may take months. You can onboard an Indian employee in just 3 days. This is much faster than the usual 3-6 months spent on company registration, tax IDs, and bank accounts. Use a platform like Remunance to simplify the process. 
  • This agility means you avoid delays and can capitalize on opportunities quickly. As one expert notes, using an EOR lets you “expand remote teams quickly, without the long-term commitment of setting up a local subsidiary.”
  • Legal Compliance & Risk Mitigation: India’s labor laws are complex. They include both federal and state-specific rules.
  • Compliance mistakes can lead to penalties or legal disputes. EOR providers focus on Indian labor law. They make sure employment contracts, payroll, taxes, and terminations follow the rules.
  • This significantly reduces legal risks for your business. The EOR takes on the responsibility of being the legal employer. This way, you won’t accidentally break any local laws. A global EOR provider says a strong local EOR will handle “all administrative tasks… according to local laws.” This includes final paychecks, severance, and notifying authorities.”
  • No Local Entity Needed (Cost and Hassle Savings): Starting a company in India can cost a lot and take time. You have legal fees, office rent, and accounting costs. You also need to handle compliance. For companies that only need a small team or are testing the market, these overheads are hard to justify. An EOR eliminates the need for a local entity. You can hire any number of people without setting up a subsidiary.
  • This translates to major cost savings on incorporation and administration. You just pay the EOR’s service fee. In India, this typically costs between USD $199 and $599 per employee each month, based on the services. So, you can skip the ongoing costs of managing a legal entity. This model is much cheaper for startups and SMEs to tap into India’s talent market.
  • Access to India’s Talent Pool: India has a large group of skilled workers in IT, engineering, business services, and more. An EOR makes it easy to tap into this low-cost, high-skill talent market worldwide
  • Businesses can hire top talent from India for remote roles. They don’t need to be physically present in the country. The EOR also helps with recruitment. Many have local HR teams that find candidates quickly, speeding up hiring. In short, companies can easily tap into India’s skilled workforce. They often find competitive salary costs. The EOR takes care of all the hiring details.
  • Faster, Simpler HR Operations: An EOR makes HR management easier for your team in India. Payroll taxes, social contributions, and mandatory benefits can be tricky. But the EOR’s systems manage everything smoothly. They make sure to deduct the right amounts for Provident Fund and ESI. They also file payroll tax returns on time.
  • They also maintain employee records and provide local support. This means your HR team, if you have one, won’t need to become experts in Indian HR. They can count on the EOR’s expertise instead. For HR departments, an EOR is almost like an extension of the team that takes care of all local HR headaches.
  • Understanding Local Norms and Culture: It’s not just about laws. Outsiders often struggle to understand India’s workplace norms. These include holiday schedules, cultural practices, and notice period customs. A good EOR will help you with these details. For example, they can assist with region-specific holidays and typical notice periods. They serve as local advisors. 
  • They help you create a competitive and compliant employment experience. This boosts employee satisfaction and keeps them longer. The EOR aligns your policies with Indian standards. (For example, it ensures you offer 12-15 days of paid vacation and follow festival holidays.)
  • Avoiding Permanent Establishment Risk: A few firms hire Indian talent as independent contractors. This helps them avoid setting up an entity. Using contractors long-term can lead to permanent establishment (PE) risk. This happens if authorities see that you have a de facto presence. EORs remove this risk. 
  • The EOR, a local entity, officially employs the individuals. This means your company’s activities in India stay compliant. So, you avoid unwanted tax presence issues. In effect, an EOR is the safest route to hire full-time staff abroad without tax exposure worries.