Employer of Record India
Payroll & Tax in India
A beginners guide to understanding payroll and tax in India
Employer of Record India
Download our full India Employment Guide
Find out all about employing in India
How we can help
Our fully-compliant payroll service in India ensures your employees are paid on time, every time
Whatever the territory or region, you need to attract and retain the best talent. But different countries and different cultures mean different employee expectations. India is no exception.
Payroll is key for any business; paying the correct salary to your business’s employees is vital. Using Agility EOR means that your employees in India are paid on time, every time.
Agility EOR offers the following payroll services in India:
- Salaries paid per month, in local currency
- Electronic payslips
- Statutory filing completed by us
- End of year reporting
what to expect
How does Payroll in India work?
Pay your staff once a month
In India, the payroll cycle typically lasts one month, with most employers paying on the 1st of the month.
There is a mandated 13th month salary which is typically paid within eight months of the end of the fiscal year as a percentage of the yearly wage.
Discretionary bonuses
Bonuses are generally defined as discretionary, and therefore not required to be placed in the contract of employment.
National minimum wage
The minimum wage rules in India differ by state and industry. For instance, state governments have set distinct minimum wages for workers in the manufacturing industry and the agricultural sector.
Our approach
It is common in India to pay employees once per month, and Agility EOR make the payment on the last working day of every month. You can also agree whether overtime should be paid (this is not a requirement so long as they receive the national minimum wage rate) or given as time off in lieu.
Tax in India
Indian employers’ costs include:
Employees’ Provident Fund Organization (EPFO)
The social security system in India is administered by the EPFO. The Employees Provident Fund (EPF) is a retirement savings plan to which both employers and workers must contribute.
Employer Contributions
- Employees’ Provident Fund – 3.67%
- Employees’ Pension Scheme – 8.33%
- Employee’s State Insurance (ESI) – 1.75%
- Health and Education Cess – 4%
Employee Contributions
- 12% – Pension
- 1.75% – Health insurance
Personal Income Taxes
Salary Range (INR) | Income Tax Rate |
0 – 250,000 | Exempt |
250,001 – 500,000 | 5% |
500,001 – 750,000 | 10% |
750,000 – 1,000,000 | 15% |
1,000,001 – 1,250,000 | 20% |
1,125,001 – 1,500,000 | 25% |
1,500,001 and above | 30% |
Wondering if expanding
in India is right for you?
Read on or speak to a member of our team now
learn more
We are Employer of Record experts in India
We have extensive experience helping businesses expand their workforce in India. Take a look at our areas of expertise to find out more:
Learn more about how you can attract and retain staff in India with both statutory and enhanced employee benefits
Wondering what it’s like to live and work in India? We’ve got you covered in our extensive guide, including the do’s and don’ts
Enhance your understanding of what’s included with Statutory Leave in India
Unsure about what’s required when employing staff in India? Find out about Indian Work Permits & Visas here
We provide a fully-managed EOR Service in India, including HR, Payroll and Legal Compliance support
Without Agility EOR, our ability to move quickly and scale would be extremely limited. Superb work from A to Z.
Carol Oliveira
Learn more
Frequently Asked Questions
Payrolling the employees is a key part of the service offered by an employer of record company. The EOR will calculate and remit all taxes, social securities and similar payments, on behalf of both employer and employee. The client will be invoiced in advance by the EOR company, for the total cost of the payroll.
Yes. Our clients are free to dictate the structure of the employees’ remuneration including any bonuses or commissions they wish to offer. In some countries, there is a statutory requirement to provide “bonuses”, for example in the form of Christmas or holiday allowances.
Yes. Agility EOR will calculate what pay is due upon termination of an employee, factoring in such things as any untaken leave entitlements.
We find that most of our clients are in the Tech, IT, Finance and Professional Services industries. However, we have acquired the skills, knowledge and experience to help all industries across the globe.
As a private company, we’re not beholden to shareholders or asset-shredding Private Equity targets. We aim to build long-term relationships with our clients. At Agility EOR, our approach is that we never forget that our business is all about people. Our Employer of Record solutions are tailored to each requirement, not a one-size-fits-all tech platform. We do the right thing by our clients and by the laws of each country we operate in. And we believe in openness; if we don’t feel we can offer you the best solution for a specific territory, we’ll say so.
We pride ourselves on our personable-approach so once you enter your new employees details into our dedicated platform, we’ll arrange a call with you to go through the details of the employment contract where together we can review and amend to your requirements. We liaise directly with your employee to build a rapport and obtain the necessary information to hire them compliantly, and set them up ready for their first payroll.
We never stop delivering! Even if you’re employee has been onboarded and is happily working for you and being paid each month, we’re here to partner with you whenever you or your employees need us. Even your ex-employees may need our assistance for tax documents, proof of employment requests etc… Our service never stops!