How to hire employees in India through an Employer of Record (EOR) [2026 guide]

Hiring in India? Foreign employers keen on tapping into the country's skilled workforce can start by hiring Indian contractors and sending international payments. But to hire full-time employees, you'll need to set up a legal entity or hire through an EOR.

Registering a legal entity can take months. Once it's set up, you need a working knowledge of Indian employment law, and any misstep can attract legal action from the Income Tax Department, the Ministry of Labour and Employment, and other state regulators.

Alternatively, you can use an Employer of Record (EOR), which handles Indian payroll, tax, and compliance for you. Through Rippling EOR's entities, you can start hiring and working with employees in India quickly and compliantly.

Here's a step-by-step guide to hiring through an EOR in India.

What is an Employer of Record in India?

An Employer of Record (EOR) is an organization that serves as the legal employer of your company's employees. By using an EOR in India, you can expand internationally without setting up an Indian entity. It lets you grow quickly while minimizing compliance risk.

EORs handle the administrative work for you, such as onboarding, benefits, payroll, and termination. They also keep up with India's evolving tax and labor laws, including the rollout of the new Labour Codes (more on that below).

Step by step: How to hire through an Employer of Record in India

Step #1: Decide between an Indian EOR and a legal entity

Should you hire Indian employees through an EOR, or set up your own entity? It depends on your company's resources, size, and plans to scale.

• Legal entity in India. Setting up a legal entity from scratch usually means registering with local authorities, opening a local bank account, and consulting with local experts to make sure you're compliant with tax and employment law. Compliance in India is particularly involved: there are central laws, state laws, and industry-specific rules to navigate.

• Indian EOR. An EOR is a third-party service that operates as the employer on your company's behalf, so you don't need your own entity. EORs handle the legal requirements for Indian payroll, contracts, and benefits, including statutory contributions to EPF and ESI, state-specific leave entitlements, and termination policies.

Want to compare the two side by side? Use our entity vs EOR cost calculator to see which makes sense for your business.

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Not sure which is cheaper for your headcount? Compare entity and EOR costs with our calculator.

Step #2: How to choose the best EOR for your business

Several EORs on the market can help hire, pay, and manage Indian employees. Before you choose a platform, think about the services you need and how much you plan to grow your global hiring footprint.

All-in-one global HR platforms, like Rippling, let you hire, pay, and manage employees and contractors worldwide. It's also a payroll processor, which means it actually runs your payroll, transmits funds, and calculates and files taxes through its own software. You can manage and automate the entire employee journey in one place, across every country you hire in.

Most EOR platforms aren't HRIS (human resource information systems). They were built specifically to hire and pay people internationally. They aggregate local payroll providers in every country and manually transmit your payroll files to them. This approach comes with many limitations.

Get the full checklist in our guide: What is an EOR?

Step #3: How to hire and onboard your Indian employees

Once you've picked an EOR that works in India, you can begin onboarding by collecting the following information from each new hire:

• Name (matching the account where you'll deposit their pay)

• Date of birth and date of hire

• Contact information, including their mailing address in India

• Bank account information

• Amount to be paid in INR (including any bonuses)

• Permanent Account Number (PAN) for tax deduction at source

• Universal Account Number (UAN) for the Employees' Provident Fund (EPF), if they have one from a previous employer

Next, you need to send out an employment agreement that outlines key working conditions. An EOR can localize and distribute employment agreements for you. Every Indian hire will have a legally compliant contract covering probationary periods, working hours, minimum wage, benefits, and termination policies including severance pay and notice periods.

A note on state variation: earned leave entitlements vary by state. Under the Delhi Shops and Establishments Act, employees are entitled to 15 days of earned leave a year. Maharashtra (which covers Mumbai and Pune) provides up to 21 days. A good EOR will generate compliant employment agreements based on the state your hire works in.

Rippling EOR flags non-compliant leave policies and tells you how to fix them. If you want to give your employees more leave to match policies in other countries, you can do that too.

Step #4: Run payroll

For the full picture on global payroll, read our comprehensive guide to running international payroll for employees in India.

Once you've collected a new hire's details and both parties have signed employment agreements, an EOR will pay your Indian employees in Indian rupees and withhold the legally required taxes from salaries. This includes income tax deducted at source (TDS), as well as contributions to social security programs such as:

• Employees' Provident Fund (EPF) and Employees' Pension Scheme (EPS)

• Employees' State Insurance (ESI), which applies to establishments with 10 or more employees and covers workers earning up to ₹21,000 a month

• Professional Tax (where applicable, varies by state)

• Gratuity (under the Payment of Gratuity Act, payable on exit after qualifying service)

Keep in mind many EOR companies are payroll aggregators, which means they pay employees via third-party vendors. This makes for slower processing and headaches when you're managing international employees in the same system.

Rippling EOR, by contrast, simplifies global employment by using native payroll software to send funds and handle taxes. You can pay Indian employees alongside your local workforce, all within a single pay run.

Below is a preview of how Rippling's one-click global payroll system works:

What India's new Labour Codes mean for hiring in 2026

On November 21, 2025, the Indian government brought all four Labour Codes into force, replacing 29 existing central labor laws. The Codes are:

• The Code on Wages, 2019

• The Industrial Relations Code, 2020

• The Code on Social Security, 2020

• The Occupational Safety, Health and Working Conditions Code, 2020

The biggest changes that affect employers hiring in India:

• Mandatory appointment letters for all workers, with specified information.

• Expanded social security coverage, including for gig and platform workers.

• A standardized definition of "wages" set at a minimum 50% of total monthly remuneration. This affects how EPF, gratuity, and other benefits are calculated, and is likely to increase employer costs for employees on heavily allowance-loaded packages.

• Gratuity eligibility for fixed-term employees after just one year of service (down from five for permanent staff).

• Women permitted to work night shifts across all sectors, with consent and required safety provisions.

• Annual free health checkups for workers aged 40 and above in notified sectors.

The Central Rules under all four Codes were notified on May 8, 2026, so the framework is now final at the national level. Those rules confirmed that EPF and ESI contribution rates don't change. State rules are the moving part: labor is a concurrent subject in India, and while some states have notified final rules, most are still finalizing theirs. Until your hire's state does, the existing state rules and transitional notifications continue to apply. A good EOR keeps you compliant on both fronts and updates contracts as state-level rules roll out.

Why Rippling is the right EOR for hiring in India

Most EOR platforms stop at hiring and payroll. Rippling goes further. Because Rippling owns its own entities in India and runs payroll on native software, you're not relying on a chain of third-party vendors to pay your team correctly or stay on top of changing compliance rules.

With Rippling, you can hire, pay, and manage Indian employees alongside your local workforce in one system. Onboarding takes 90 seconds. Payroll runs in minutes. Compliance updates, like the rollout of the new Labour Codes, are built in. And Rippling AI lets your team delegate the tedious parts of running a global workforce, from answering an employee's leave question to checking a pay run before you approve it.

That last part matters more than it sounds. In Rippling's State of HR 2025 report, 58% of HR leaders said they're held back by their technology. Adding a second, disconnected system to hire in one country is how that happens.

If you're ready to start hiring in India without setting up an entity, see Rippling.

Benefits of using Employer of Record services in India

Hiring in India means navigating central tax law, state-level employment rules, and statutory contributions like EPF and ESI. An EOR takes on all of that. The main benefits:

• Lower upfront cost. Setting up a legal entity in India can take months and cost a significant amount before you've hired anyone. An EOR removes that overhead.

• Built-in compliance. Your EOR handles Indian labor law, tax filings, and statutory benefits, including state-by-state variations and the rollout of the Labour Codes.

• Faster hiring. Without an entity to set up, you can onboard talent in days rather than months.

• Less admin. Your HR team can focus on people, not paperwork. The EOR handles contracts, payroll runs, and statutory filings.

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Frequently asked questions about hiring through an EOR in India