Hire in India
India PEO &
Employer of Record
Hire & manage teams remotely in India without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
Hire Employees in India
The NNRoad Advantage ☺
Pay as you go
Global account manager
Employer of Record in India
Compliance & Payroll
Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation.
Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).
On-boarding and off-boarding employees following labor law practice.
Complete payroll solution and benefit administration
Employee management – employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.
Mandatory insurance compliance (i.e. pension, labor and health insurance) according to the local labor laws.
Payment management (Invoicing customers/clients and vendor payments).
Work VISA application assistance, if needed.
Local individual income tax reporting.
Payroll & PEO in India
Compliance & Payroll
Registering the necessary company and personnel information for payroll calculation in the payroll software and system
Monthly Payroll Processing
Year-End Adjustment and Annual Declaration
Taxes & Payroll in India
Employee Income Taxes:
India imposes income tax on both residents and non-residents. The rate of tax for residents is progressive, while the rate for non-residents is a flat 30%. The country also taxes overseas income earned by its residents. Residents are taxed on their global income, regardless of where it is earned. Non-residents are only taxed on income that is sourced in The country. Overseas income earned by residents is subject to income tax only if it is brought into the country (‘repatriated’).
There are several deductions and exemptions available under income tax law. These can be used to reduce the amount of tax payable. The main deduction available is for investment in specified assets, such as equity shares, mutual funds and unit-linked insurance plans (ULIPs). Other deductions include those for life insurance premiums, children’s education expenses and charitable donations.
India also has a number of tax treaties with other countries. These treaties specify the income that is taxable and the rate at which it is taxed. The income tax system is administered by the Central Board of Direct Taxes (CBDT). The CBDT is responsible for issuing tax laws, rules and regulations. It also assesses and collects taxes.
Incomes at or bellow 250,000 INR per year are not taxed.
5%: 250,001 – 500,00 INR
20%: 500,001 – 1,000,000 INR
30%: >1,000,000 INR
20% * 500,000 = 100,000
5% * 250,000= 12,500
0% * 250,000 = 0
100,000+12,500+0 = 112,500
Yearly income tax = 112,500 INR
Employer Costs in India
Employer contributions are compulsory for all companies with more than 20 employees. The rates vary depending on the industry, but the maximum contribution is capped at 12% of the employee’s wage. Employer costs also vary depending on the industry, but they are typically lower than in other countries. For example, employer costs for IT and BPO industries are only about 4% of wages. This is because India has a large pool of skilled workers who are willing to work for relatively low wages.
Employer contributions and costs can have a significant impact on the cost of doing business. For companies that are already operating on tight margins, these additional costs can be difficult to absorb. As a result, many companies are looking for ways to reduce their employer costs. One way to do this is to use contract workers or outsourcing companies that can provide employees at a lower cost.
Employers must pay income taxes based on the salary of their employees:
12% – pension (capped at 15,000 INR per month)
4.75% – Health insurance
12% – pension
1.75% – Health insurance
Benefits & Insurance in India
India offers numerous work benefits and insurance options for employees. The country social security system includes the Employees’ State Insurance Corporation (ESIC) which provides various health, maternity, sickness and disability benefits to workers. The country also has a provident fund where part of an employee’s salary is held in trust to ensure they are provided with funds after retirement or when laid off from their job.
India also offers life insurance plans that provide financial protection against death due to any cause, as well as insurance plans covering unpaid medical expenses. The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is a government-backed life insurance scheme available to those aged between 18 and 50 years old with annual premiums starting from Rs 330.
Employees benefit from a pension fund where both the employer and employee deposit 12% of the employee’s monthly wage.
Medical insurance is covered by the employer through a healthcare contribution.
Working Hours in India
Working Hours Per Week:
The average work hours are between 45-50 hours per week. The maximum number of overtime hours one can work is limited to three hours a day and twenty-four hours a week. For work exceeding this limit, employees must receive prior permission from their employer and additional payment for overtime wages according to India’s laws on labor. Employees typically receive 2 times their regular hourly wage rate for overtime pay.
India also has various regulations concerning working conditions that employers must adhere to, such as providing suitable rest breaks during work periods. In order to ensure compliance with these rules, regular inspections by labor department authorities may be conducted. Additionally, all workers are required to have at least one day off each week – usually Sunday – to rest and recuperate. It is important for employers to be aware of the work hours and overtime regulations so that they can ensure their employees are being fairly compensated according to these labor laws.
The working hours per week range between 40-45 hours for full-time employees. Note that maximum legal working hours can vary by industry. Contact us for more detailed information.
Overtime Laws & Regulations
Typically, overtime compensation is calculated as 2 times the normal work rate. Some employees such as managers and IT staff sometimes do not qualify for overtime pay. This discrepancy brings about much legal ambiguity and overtime compensation will vary from case to case and employee.
Termination Laws in India
India has stringent termination laws governing the employer-employee relationship. Employers must adhere to a notice period when terminating an employee, which can range anywhere from 15 days to 3 months, depending on the number of years of service. Employers are also required to provide employees with appropriate compensation upon termination, based on their length of service and salary level.
India’s labor laws prohibit any form of discrimination or retaliation against employees who are terminated for reasons unrelated to performance or misconduct. Employers must observe these regulations strictly and ensure that all termination policies comply with the country’s labor laws. If there is a breach of termination laws, employers may face severe legal consequences. Therefore it is important for employers to seek professional advice before taking any action that may be deemed unlawful.
Employers should also consider alternative dispute resolution options, such as mediation or arbitration, to resolve any potential termination-related issues. Laws provide protection and remedies for both employers and employees in the case of a wrongful termination. As such, it is important to ensure that all termination procedures are strictly followed in order to avoid legal disputes.
In conclusion, India has strict termination laws which must be adhered to at all times by employers who wish to remain compliant with the labor regulations. It is essential for employers in the country to seek professional advice on all aspects of termination before taking any action. Alternative dispute resolution methods should also be taken into consideration when dealing with potentially sensitive matters related to termination.
Severance is only provided in cases of redundancy, when an employee’s job becomes redundant either through technology or cost reductions.
Employment Contract in India
In India, an employment contract is a binding agreement between an employer and employee. It outlines the terms of employment, such as wages or salary, hours of work, job responsibilities and duties, benefits and leave entitlement. An employment contract must be made in writing in order for both parties to clearly understand the terms of employment. The country’s labor laws also require certain information to be included in all contracts of employment. This includes income details and working hours; it must also contain a clear description of any vacation/leave entitlements that are provided by the employer.
Employers must ensure that their employees receive written notification if any changes are made to the terms of their contract during the course of their employment. Furthermore, the labor laws also state that an employee may not be asked to work more than 48 hours a week or 8 hours a day without the proper authorization. India’s labor laws provide protection for both employers and employees by setting out clear rules and guidelines regarding employment contracts. It is important that employers understand the labor laws in order to ensure compliance with them. Additionally, understanding India’s labor laws can help employers create employment contracts that are compliant and beneficial for both parties.
Probation periods in India can range between 3 and 6 months. During this time the employer reserves the right to terminate an employee without providing any notice.
Types of Leaves in India
Employees are entitled to between 15 and 20 paid annual leave days per year.
Full-time employees are entitled to 10 days of paid sick or personal leave per year.
Full-time employees are entitled to 12 t0 26 weeks of paid maternity leave and an extra 6 weeks of paid leave in the case of a miscarriage.
It is common for new fathers to receive 15 days of paternity leave.
Public Holidays in India
India celebrates a number of festivals and public holidays throughout the year. These holidays are based on religions, national days, regional celebrations and certain seasons. The country is home to a wide range of religions including Hinduism, Sikhism, Jainism, Buddhism, Islam and Christianity – each religion observes its own set of holidays and festivals. India also has three national holidays – Republic Day (26 January), Independence Day (15 August) and Gandhi Jayanti (2 October).
Additionally there are several regional holidays which vary from state to state across the country. Some popular regional festivals include Baisakhi in Punjab, Pongal in Tamil Nadu and Bihu in Assam. The four major seasons – summer, monsoon season, winter and spring – are each celebrated with holidays.
India is home to hundreds of regional holidays that vary from region to region. The most important and widespread holiday in India is Diwali on October 24. There are 3 federal public holidays: