10 Best Employer of Record (EOR) Solutions in India in 2025

Best Employer of Record (EOR) Services in India: A Complete Guide for Businesses

Hiring in India without setting up a local office used to be complicated. But with Employer of Record (EOR) services, that process is now faster, easier, and fully compliant with local laws.

Whether you’re a startup looking to scale or a global business exploring the Indian market, EOR providers can take the weight off your shoulders when it comes to local HR, payroll, and compliance.

This guide walks you through everything you need to know before choosing an EOR service in India.

What is an Employer of Record (EOR)?

An Employer of Record is a third-party organization that legally hires and manages employees on behalf of another company.

While your company oversees the employee’s day-to-day tasks, the EOR takes care of all the behind-the-scenes work, contracts, payroll, taxes, benefits, and compliance with Indian labor laws.

In short, you get the talent, and the EOR handles the paperwork.

Why Companies Use EORs in India

India has a huge, diverse talent pool and a rapidly growing digital economy. But hiring here isn’t as simple as posting a job. Labor laws are complex, there are different state regulations, and payroll systems vary depending on the employee’s location.

Here’s why many businesses prefer going through an EOR:

• No Need to Set Up a Local Entity: You can hire in India without incorporating a business there.
• Fast Onboarding: EORs can onboard new employees within days instead of months.
• Legal Compliance: Indian labor laws change often. EORs stay on top of it so you don’t have to.
• Reduced Operational Burden: Say goodbye to figuring out local tax systems, social contributions, or labor law filings.
• Scalability: Whether you’re hiring one employee or building a full team, EORs offer flexibility to scale up or down.

How Does EOR Work in India?

When a company decides to hire in India without setting up a legal entity, here’s how the Employer of Record (EOR) model steps in and makes it happen, legally, smoothly, and efficiently. Let’s break it down step by step:

1. You Find the Talent You Want to Hire

It starts with your team identifying the right candidate in India. Whether it’s a software developer, marketer, or customer support rep, you handle the hiring process just like you would for any other employee, post the job, interview, make an offer.

But instead of issuing the employment contract yourself, the EOR steps in.

2. The EOR Legally Employs the Person on Your Behalf

The EOR provider becomes the official, legal employer on paper. That means:

• They sign the employment contract with the employee.
• They register the employee with Indian tax authorities and government social security schemes like Provident Fund (PF) and Employee State Insurance (ESI).
• They ensure the offer letter and contract meet all Indian labor law requirements — including terms around notice periods, leave entitlements, bonuses, and gratuity.

From a legal perspective, the EOR is the employer. But functionally, the employee works for you.

3. You Manage the Work — The EOR Manages the Paperwor

The employee reports to your team, works on your tasks, follows your goals, and is fully integrated into your operations, just like a direct hire.

Meanwhile, the EOR handles all the back-end HR and admin work:

• Monthly payroll
• Income tax deductions (TDS)
• Social contributions like PF, ESI
• Statutory bonus calculations
• Leave tracking
• Expense reimbursements
• Payslip generation

Everything runs on autopilot.

4. Monthly Invoicing & Payrol

Every month, the EOR calculates payroll, deducts necessary taxes, and deposits the employee’s net salary into their bank account in India.

You receive a monthly invoice from the EOR, typically covering:

• Gross salary
• Employer contributions (PF, ESI, gratuity, etc.)
• EOR service fee

You pay one invoice, and the EOR takes care of the rest.

5. Compliance is Taken Care Of

India’s labor laws can vary by state and include requirements like:

• Minimum wages
• Maternity and paternity leave
• Gratuity (if the employee stays over 5 years)
• Shops & Establishments Act registration
• Professional Tax (varies by state)

The EOR ensures all these boxes are checked so you’re never caught off guard. They also handle any labor law updates or audits.

6. Offboarding is Handled Smoothly

If the working relationship ends, the EOR takes care of:

• Final settlements (F&F)
• Exit documentation
• Gratuity calculations (if applicable)
• Proper termination process as per Indian labor law

This protects your brand’s reputation and ensures no compliance missteps during exit.

Key Services Offered by EOR Providers in India

Most EOR providers in India offer a full suite of services, including:

• Drafting compliant employment contracts
• Employee onboarding & offboarding
• Payroll processing
• Income tax calculation & deduction (TDS)
• Provident Fund (PF), Employee State Insurance (ESI), and other benefits
• Expense reimbursements
• Labor law compliance and advisory
• Leave & attendance tracking (some offer this via HR platforms)

Some EORs also offer extra HR support like employee engagement tools, insurance add-ons, and visa support for global mobility.

Things to Consider Before Choosing an EOR in India

Not all EOR providers are created equal. Here’s what you should evaluate before signing a contract:

1. Local Expertise: Make sure the provider has a strong legal and HR presence in India, understands both central and state laws, and is familiar with nuances like gratuity rules and professional tax.

2. Pricing Model: EORs either charge a flat monthly fee per employee or a percentage of their monthly gross salary. Ask for a clear breakdown of fees and avoid hidden costs.

3. Speed of Onboarding: A good EOR should be able to onboard new hires within a few days with all documents and compliance in place.

4. Platform Usability: If the EOR uses an HR/payroll dashboard, check how user-friendly it is — for both your admin team and the employee.

5. Customer Support: You’ll want fast and reliable support in case of legal updates, payroll issues, or employee queries. Some EORs even offer dedicated account managers.

6. Data Security: Handling employee data involves compliance with India’s data protection laws. Choose a provider with strong cybersecurity and GDPR-style practices if you’re an international company.

7. Client Reviews & Case Studies: Always look for testimonials or ask for references. It helps to see how the provider has handled companies in similar industries or of similar size.

EOR vs. Setting Up a Local Entity in India

Final Thoughts

If you’re looking to tap into India’s talent market without the complexity of establishing a local office, EOR services are a smart move. They offer speed, flexibility, and compliance in a country where employment law can feel like a maze.

But take your time to choose the right partner. A good EOR should feel like an extension of your HR team, not just a payroll provider.