Hire and manage employees in India

Hiring in India? Here’s a comprehensive guide for everything you need to consider, including deciding between an entity and an EOR, classifying and onboarding workers, running payroll, and much more.

Avg Time to Hiring

Less than 5 minutes

Payroll Cycle


Time Zone

GMT +05:30 (Mumbai)

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Hire, manage, and pay
employees in India with Rippling

Onboard Indian employees and contractors in 90 seconds

Set up new hires in India with everything they need, from country-specific training to apps like Slack.

Pay your India team in Indian Rupees—in minutes

Pay all of your employees and contractors around the world without waiting on transfers or conversion.

Manage HR, IT, and Finance in one system

Juggling multiple systems for your team? That creates silos and busy work. Rippling does it all—in a single system.

Automate your HR compliance work

Understanding and complying with Indian laws is hard work. Rippling does it for you.

The essential guide to hiring in India

Hiring in India for the first time? We know it can be a daunting process, especially if you’re unfamiliar with Indian employment laws and regulations. But, getting it right is crucial to the success of your global team. 

In this guide, we’ll take you through the most important aspects of the hiring process, with information on Indian labor laws, new hire onboarding, mandatory benefits, and so on.

Employer of Record (EOR) vs. entity

Before anything else, you need to decide how you’re going to hire employees in India. You have two options: either hire through an EOR or set up your own entity.

  • Legal entity in India. Setting up a legal entity from scratch usually requires registration with local authorities, opening a local bank account, and consulting with local experts to ensure compliance with tax and labor laws.
  • Indian EOR. An EOR is a third-party service that operates as an employer on a company’s behalf—meaning you don’t need to set up your own entity. EORs handle all the legal requirements for complying with Indian laws for payroll, contracts, and benefits. EOR services also include calculating and withholding taxes, onboarding and managing employees, and running payroll.

Choosing between an EOR vs. setting up your own entity can be a tough decision. Here are the pros and cons of each approach to global employment: 

Cost and implementation

Less time-consuming to set up.

You can start hiring within days instead of months.

Becomes costlier as your headcount increases.

Takes up to six months to set upand requires registration fees.

More cost-effective once you've hired enough employees in a foreign country.


Quickly set up new hires, often within 1-14 days, depending on the provider.

Supports large-scale expansion in a new market.


Manages all of your compliance work for you, takes on liability, and provides localized employment contracts.

Can't tailor certain policies, and other HR/legal processes, to the needs of your business.

Requires expert knowledge of local laws and tax regulations and internal legal resources, as your company is liable for all legal and compliance infractions.

Can tailor certain policies, and other HR/legal processes, to the needs of your business.

Payroll & Benefits

Quickly pay and insure employees around the world.

Taxes are filed for you.

Must manually keep track of statutory deductions and employee entitlements for every hire.

Let’s say you go the EOR route. You can begin onboarding new hires by collecting their information (including name, date of birth, date of hire, bank account, and contact information) along with their Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).

Learn how Rippling can help you hire and onboard Indian employees in 90 seconds—in our guide.

Classifying Indian workers: employees vs. contractors

A common mistake employers make is misclassifying full-time employees as independent contractors. Misclassification can damage the employment relationship early on—not to mention, get you in hot water with Indian authorities. 

For a smooth onboarding process, it’s important to get employee classification right. Here’s an overview of the key differences between employees and contractors in India:



High level of worker control. Contractors are generally given more autonomy to determine how to complete the work and when to do it.

More direction from the employer. Employees are generally subject to more control and direction from their employer, who will provide guidance on how to perform the work and may set specific hours of work.

Equipment and tools are owned by the worker.

Equipment and tools are typically provided by the company.

Less integrated. Contractors tend to be independent, they’re more likely to work remotely, and they use their own tools and equipment.

Highly integrated. Employees are typically more integrated into the employer's organization, for example, they may work at the employer's premises.

No entitlement to benefits. Contractors are not entitled to the same benefits, leave entitlements, and protections as employees. They’re responsible for paying their own taxes.

Entitled to benefits. Employees are entitled to certain employment benefits and protections, such as minimum wage, overtime pay, and vacation pay. They may also be entitled to benefits like health insurance, retirement plans, and paid sick leave.

Time-bound engagement.  Contractors are typically engaged for a specific project or period of time.

Indefinite engagement. Employees are generally hired for an indefinite period of time.

Risk of loss. Contractors may assume more risk and liability for the work they perform.

No risk of loss. Employees are generally protected from liability for work-related issues.

Non-exclusive services.  Contractors cannot be contractually bound to a single company; they can provide their services to more than one organization.

Exclusive services. Employees can be contractually bound to provide services to just one company.

Subcontracting. Contractors can delegate work to be performed by another person or business.

No subcontracting. Employees are expected to do their work themselves. They can’t delegate responsibilities to subcontractors without company approval.

Need more guidance on how to classify your Indian employees? Check out our classification guide.

Work permits for Indian employees

When you hire employees in India, it’s your responsibility to ensure they’re legally allowed to work. Foreign nationals who aren’t Indian citizens (and don’t have permanent residency) likely need a work permit or visa. 

Not sure where to start? Here are the types of work visas (and who can apply for them) in India: 

  • Employment visa (or E visa): This visa is for skilled foreign nationals who are sponsored to work for an Indian company or multinational corporation with an Indian presence. NGO workers can get an E visa provided their monthly salary is at least INR 10,000. Applicants can try for a single entry visa if they don’t plan to travel or multiple entry visa if they plan to leave the country intermittently.
  • Business visa (or B visa): This is for prospective business owners looking to establish a corporate presence in India. It can also be used for investment purposes, or business leaders traveling to India for meetings.

For more details on visa applications and requirements, read our primer on work permits in India

New hire onboarding checklist

With a new hire that’s legally allowed to work in India, you can continue the onboarding process. Keep in mind: onboarding is not just about filing paperwork. There’s a lot more that goes into it, like training, orientation, scheduling regular check-ins, and so on. 

Here are the most important things to address during each stage of the onboarding process: 

Before their first day

  • Complete a background check. 
  • Send an offer letter (more on that in the next section).
  • Prepare for tax withholdings—you’ll need their Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN). 
  • Enroll them in benefits.
  • Add them to payroll. 
  • Set up their app accounts. 
  • Send a welcome email. 

On Day 1

  • Make sure their workspace is ready. 
  • Give them an agenda. 
  • Schedule a meeting with their onboarding mentor. 
  • Schedule a 1:1 with their manager.
  • Give them an office tour. 
  • Provide them with a list of contacts.

During their first 90 days

  • Schedule general and role-specific training. 
  • Assign work and help them set goals. 
  • Schedule regular check-ins to help them stay on track. 

See our guide on new hire onboarding in India for the full list of onboarding essentials.

What to include in an offer letter in India

An offer letter (or employment contract) is one of the first documents that establishes a business relationship between you and your new employee. Needless to say, it’s crucial to leave a positive impression. Here’s a list of some of the things you’ll want to include in your employment offer letter:

  • Position, job description, and probationary period 
  • Working hours 
  • Compensation (salary and equity) and benefits 
  • Vacation policy 
  • Termination policy 
  • Contact information 
  • Personal data collection 

Get the full checklist in our guide to sending a legally compliant offer letter in India.

NDAs and confidentiality agreements in India

Non-disclosure agreements (NDAs) are enforceable—and necessary if you’re looking to protect your company’s valuable information. In India, an NDA is defined as a legal contract that forbids one or more parties from sharing sensitive information with third-party people or entities. Note: NDAs aren’t guaranteed to be upheld in a court of law if they interfere with a terminated employee’s ability to find future work. More on that in our guide to NDAs in India

Generally speaking, an NDA in India can protect the following kinds of information: 

  • Trade secrets and proprietary information 
  • Financial information (financial statements, budgets, etc.)
  • Customer information (contact info, purchasing history, etc.)
  • Employee information (salary, job duties, etc.)
  • Intellectual property 

Keep in mind, there are different types of NDAs including mutual NDAs, non-mutual NDAs, and multiparty NDAs.

Running background checks on Indian employees

Hiring employees in a new country comes with a lot of unknowns, and that includes the background screening process. Running a background check is arguably one of the most important parts of the onboarding process in India, as resume fraud is widespread. 

While background checks aren’t legally required, employers have the right to request applicant information that is relevant to their role, including criminal history and education verification. Here are the different types of pre-employment screenings an employer can conduct: 

  • Criminal record check 
  • Employment history
  • Reference check 
  • Work authorization 
  • Education history 
  • Credit reports 
  • Social media profiles 

For a complete rundown on employment background checks in India, check out our guide.

Paying employees in India

Now that you’ve decided between an EOR or setting up your own local entity, it’s time to pick a payroll solution—read our full guide to running payroll in India to learn how. 

Next, follow these steps: 

  • Determine your worker’s employment status. 
  • Capture their payroll information, including name, date of birth, date of hire, bank account information, PAN and TAN, and account number for the Employee Provident Fund (EPF). 
  • Pay your employees in INR (this is legally required). 
  • Run payroll. 

You’re responsible for withholding income tax and calculating payroll deductions for your Indian employees, so you should keep these costs of hiring in mind:

Income Range (INR)

Income Tax Rate





900,000-12 million


12 million to 15 million


Above 15 million


Mandatory employee benefits in India

The Ministry of Labour and Employment sets forth the statutory minimums (required benefits) in India. If you fail to adhere to these benefit requirements, you could wind up facing harsh penalties and fines. 

So, it’s best to understand what you’re responsible for offering. Mandatory benefits include:

  • Employees Provident Fund. This is a social security scheme that provides retirement payments to Indian workers. Employers generally contribute 12% of an employee’s salary to the fund, with 8.33% going into a pension scheme.
  • Employee State Insurance Scheme. You must also contribute to India’s Employee State Insurance (ESI) scheme. This covers benefits for medical care, sickness, maternity, disability, and so on. Most companies with 20 or more employees must contribute 4.75% of a worker’s wages to the scheme.
  • Vacation entitlements. Vacation leave policies vary among India’s 28 states. Typically, employees are entitled to around 15 days of time off (or earned leave) per year. 
  • Statutory holidays. Public holidays vary by region in India. There are three national holidays that are observed (regardless of location): Republic Day, Independence Day, and Gandhi Jayanti. Employers usually allocate 10 days of paid holiday leave for employees to use however they’d like. 
  • Sick leave. Employees are entitled to at least 12 days of paid sick leave per year. This can be used for illness (both for the employee and family members) or bereavement purposes.
  • Maternity leave. Pregnant employees who have worked with the same employer for 80 days in the last year are entitled to 26 weeks of paid leave for the first two children, with 12 extra weeks for each subsequent child. They will receive 100% of their salary during this time. 
  • Gratuity. If an employee works at least five years continuously for the same company (with 10 or more employees), they’re eligible for gratuity payments. 

Looking for more information on statutory requirements (and supplementary ones) in India? Check out our comprehensive guide, from paternity leave and health insurance to PTO (paid time off).

Managing remote employees’ computers and apps

For a smooth first day (and beyond), you need to make sure your new employee’s devices and apps are set up—so they don’t waste hours trying to get into Slack or email. With the rise of remote work, however, it’s arguably harder than ever to configure and manage your employees’ devices. 

How do you ship a computer overseas, configure it for that specific worker, and keep it protected from cyberattacks—all from afar? Using Rippling, you can: 

  • Quickly set up and secure employees’ accounts, ensuring everyone has the access and permissions they need to dive into work. 
  • Have a single place to set up, manage, and disable all employee apps—like Google Workspace and Slack.

Learn more about remote employee device management in our primer.

Protecting company IP in India

Protecting one’s original ideas should be top of mind for anyone hiring in India. After all, onboarding a new employee means giving them access to sensitive information that can put your company at risk. 

Luckily, the Indian government has fortified intellectual property (IP) protections in an effort to fight digital piracy and counterfeiting over the last decade. Indian laws recognize seven types of IP rights: 

  • Patents
  • Copyrights (used to protect literary works, artistic works, cinematograph films, and more) 
  • Trademarks
  • Industrial designs
  • Geographical indication of goods (e.g. Darjeeling tea or Basmati rice)
  • Plant varieties 
  • Semiconductor integrated circuits 

Tip: Be sure to clarify IP protections in your employment agreement. 

For more on intellectual property ownership and rights in India, read our beginner’s guide

Complying with India labor laws

With each country having specific labor and employment laws, it can be hard to keep up—especially when you’re building a global team. Indian labor laws are no different; their regulations vary depending on industry, state government, and business size. Keep in mind, failing to comply with Indian regulations can result in steep fines and penalties. 

Here are some of the most important regulations to know when hiring in India: 

  • Working conditions depend on employment type. “Workmen” (or non-managerial employees) are governed by a different set of laws than “non-workmen” (or managerial employees). This means termination requirements and other employee protections will vary. 
  • India doesn’t recognize at-will employment. You need reasonable cause to involuntarily dismiss an employee. Otherwise, you’ll need to provide notice or pay them out. 
  • Indian workers can form trade unions. The Trade Unions Act gives workers the right to register a trade union and use it for collective bargaining. Employers are prohibited from refusing to bargain with a registered trade union. 

Read more about Indian labor law compliance here.

Terminating employees in India

Indian employees enjoy strong protections against unjustified dismissals. Acceptable reasons for termination include: 

  • Termination during the probationary period 
  • Termination for reasonable cause (willful insubordination, theft, fraud, etc.)
  • Collective dismissals 

Otherwise, workmen are entitled to notice or pay in lieu of notice. Non-managerial employees, for instance, can only be let go without cause if given one to three months’ written notice (or equivalent pay through the notice period). 

As the employer, you’re responsible for establishing the terms of dismissal in the employment agreement. Learn more about termination requirements in our full guide.

Disclaimer: Rippling and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.

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