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Hire and manage employees in India

As your Employer of Record (EOR) in India, we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.
Last updated:
July 16, 2025
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Quick facts

India, one of the largest economies in Asia, is known for its rapidly growing technology, manufacturing, and service industries. With a diverse and highly skilled workforce, India offers a favorable environment for both domestic and international businesses. The country has robust labor laws that provide essential protections and regulate employment practices, including contracts, working hours, and benefits.

Employment Contracts

In India, employment contracts can be either permanent or fixed-term:

  • Permanent contracts are ongoing until terminated by either the employer or employee.
  • Fixed-term contracts are used for specific projects or short-term work. These contracts specify the duration of employment, which must be reasonable but has no legal minimum or maximum limit.

Probation Period

There are no specific laws governing probation periods, but the common practice in India is a probationary period lasting 3 to 6 months, during which either party may terminate the contract without providing extensive notice.

Working Hours

Indian labor laws specify a maximum of 9 hours per day or 48 hours per week. Overtime is paid at twice the regular hourly rate for work beyond these limits.

Vacation Days

The entitlement for vacation varies by state but generally includes:

  • 1 day of leave for every 20 days of work for adults, resulting in approximately 15 working days of annual leave.
  • 20 working days of leave for young workers under 18 years of age.

Employees receive their full daily wages during the term of their annual leave.

Sick Leave

Employees are entitled to 7–12 days of paid sick leave annually, depending on state laws. Sick leave also includes bereavement and care for ill family members. Employees are paid 70% of their average daily wages during sick leave, and employers may require a medical certificate for absences longer than 3 days.

Wages and Salary Payment

  • Wages must be paid before the 7th day of the month for establishments with fewer than 1,000 employees and before the 10th day for larger establishments.
  • The minimum wage is not fixed nationally and varies by state and sector, typically ranging between ₹17,500 and ₹23,000 per month.

Public Holidays

India observes three national holidays:

  1. January 26: Republic Day
  2. August 15: Independence Day
  3. October 2: Gandhi Jayanti

In addition, states designate several local and religious holidays based on regional customs.

Employer Taxes

Employers are required to contribute to the following:

  • Provident Fund (PF): 12% of the employee's monthly basic salary, capped at ₹15,000.
  • Employees' State Insurance (ESI): Employers contribute 4.75% of gross wages for establishments with more than 10 employees.

Employee Taxes

Employees are taxed based on their income, with rates ranging from 5% to 30%. Other deductions include:

  • Provident Fund (PF): 12% of basic salary.
  • Employees' State Insurance (ESI): 1.75% of gross wages.

Notice Period

Notice periods vary by job level:

  • 1 week to 1 month for junior-level employees.
  • 1 to 3 months for senior-level employees

Termination must include a written notice specifying the reasons.

Termination and Severance Pay

Indian law mandates gratuity payments instead of severance pay for employees who have completed 4 years and 9 months of continuous service. The gratuity formula is:

  • (15 days x last drawn salary x years of service) / 30.
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Frequently
Asked
Questions

What is International EOR and PEO?

International EOR (Employer of Record) and PEO (Professional Employer Organization) are services that enable businesses to compliantly hire, manage, and pay employees in foreign countries without the need for establishing a legal entity. EOR acts as the legal employer while PEO co-employs workers, handling administrative tasks such as payroll, taxes, and benefits.

Does Acvian handle time record submissions?

Acvian does not handle time record submissions directly. It is the client’s responsibility to track and submit employee work hours. However, Acvian can offer guidance and best practices to ensure efficient time tracking and compliance with local labor laws.

How can employees view their payroll details?

Employees can view their payroll details through the monthly payslips they receive and also via our Acvian platform. These payslips contain information on earnings, deductions, taxes, and net pay, giving employees a clear overview of their monthly payroll. Please note that in some countries, employers are restricted from viewing payslips due to data protection regulations, and only employees can share their payslips. For more details on these regulations, please contact our specialists.

How Acvian handles payroll disputes?

Acvian addresses payroll disputes promptly, working closely with both the client and the employee to investigate and resolve any issues.

Does Acvian require advanced monthly payments of salaries and service?

Yes, Acvian requires advanced monthly payments for salaries and service to ensure timely and accurate payroll processing.

Can Acvian provide consultations regarding a labor and tax legislation?

Yes, Acvian can provide consultations regarding labor and tax legislation. Our team of experts is well-versed in local regulations and can offer guidance to help your business maintain compliance, reduce risk, and navigate the complexities of international employment and taxation laws.

Which benefits does Acvian provide?

Acvian provides a diverse range of benefits, including but not limited to:

  • Health insurance
  • Car leasing
  • Gym allowance
  • Per diem compensation
  • Maternity leave

We can customize and offer many kinds of benefits requested by the client, ensuring that your employees receive the support and perks that align with your company culture and local regulations.

Can Acvian provide private health insurance?

Acvian can provide private health insurance options as part of its comprehensive employee benefits package.

What would the monthly/yearly costs for the employee be?

The monthly/yearly costs for an ‘average’ package vary depending on the specific plan and location. See our estimated price packages here. Acvian’s team can provide detailed cost breakdowns based on your requirements.

Can Acvian help with entity set up?

While Acvian doesn’t directly provide entity set-up services, we can introduce you to local lawyers who specialize in this area to assist you with your needs. See also, when it's better to set the entity or use the EOR.

Offboarding: how it is handled?

Offboarding is managed by Acvian in a structured and compliant manner. We coordinate with your business to ensure all necessary documentation, exit interviews, and final payments are completed. Acvian also ensures adherence to local labor laws and regulations, including providing any required notice periods and managing the termination process.

When does business need it?

Businesses typically need EOR and PEO services when they:

  • Expand into new international markets.
  • Hire remote employees in foreign countries.
  • Seek to streamline global workforce management.
  • Aim to ensure compliance with local labor laws and regulations.
  • Want to reduce the time and cost of establishing legal entities abroad.

Is Acvian compliant with GDPR?

Yes, Acvian is fully compliant with GDPR regulations. We collect and process personal data in accordance with the law, ensuring that data is used only for general, allowed purposes such as marketing and other legitimate business activities.

Where can Acvian supply EOR services?

Acvian can supply EOR services in over 180 countries, encompassing almost all European nations, the United States, and Canada, providing extensive coverage to support your business’s global expansion and workforce management needs. See our coverage here.

How does payroll work under EOR?

Under EOR, Acvian manages the payroll process by:

  • Acting as the legal employer of your foreign workforce.
  • Handling salary calculations, deductions, and disbursements.
  • Ensuring compliance with local tax and labor laws.
  • Managing payroll taxes, social contributions, and benefits.
  • Providing timely and accurate payroll processing for your employees.

Explore the details here.

Can you provide support for expatriate EOR workers?

Yes, Acvian provides comprehensive support for expatriate EOR workers, including:

  • Visa and work permit assistance.
  • Relocation and housing support.
  • Local registration and compliance.
  • Payroll and tax management.
  • Coordination of benefits and insurance coverage.

Explore in details here.

What are the details of expats support?

Expats support from Acvian encompasses a range of services designed to facilitate a smooth transition for employees working abroad. Key aspects include:

  • Assistance with visa and work permit applications, renewals, and compliance.
  • Support for relocation, including housing, schooling, and local registration.
  • Guidance on local tax regulations and filings.
  • Coordination of locally compliant benefits and insurance coverage.
  • Ongoing support for any changes or issues that may arise during the expatriate assignment.

What happens after onboarding?

After onboarding, Acvian maintains an ongoing relationship with your business and employees, ensuring smooth payroll processing, managing tax and regulatory compliance, handling benefits administration, and providing support for any changes or issues that may arise in the employment lifecycle. This allows you to focus on your core business operations while Acvian manages your international workforce.

How many days will it take for our personnel to be onboarded?

The onboarding process typically takes between 2 to 4 weeks, depending on the country and complexity of the employee’s situation. However, Acvian strives to expedite this process, ensuring a smooth and efficient transition for your personnel. See our story of the urgent employment project.

Does Acvian provide in-country support for employee inquiries or assistance requests?

Yes, Acvian provides in-country or regional support for employee inquiries and assistance requests. We have dedicated managers in the countries where we support your employees, ensuring prompt and knowledgeable assistance tailored to local regulations and practices.

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