- Maharashtra charges Professional Tax of up to ₹2,500 a year, while Delhi, Haryana and Uttar Pradesh levy none on salaries.
- Each state’s Shops and Establishments Act continues alongside the four Labour Codes.
- ESI applies to employees earning up to ₹21,000 a month, now in every district nationwide.
- Every person working in India needs an Indian employer on record, whatever your team structure.
On this page
How is a distributed workforce different from a remote team?
Scale and spread. A remote team can be five people in one city working from home. A distributed workforce has no centre at all.
Some staff may share a coworking space in Pune. Others work from Kochi, Jaipur or Lisbon. Many companies mix this with hybrid work, where some people still come in a few days a week.
The model works well for engineering and support. It works badly when nobody tracks where each person actually sits. Our piece on borderless hiring covers the talent side.
Which Indian rules change with an employee’s location?
State-level rules. National schemes stay the same.
Suppose your India team has three engineers on ₹1,00,000 a month each.
| Location | Professional Tax a year | Labour Welfare Fund deduction |
|---|---|---|
| Pune, Maharashtra | ₹2,500 | Twice a year, 30 June and 31 December |
| Bengaluru, Karnataka | ₹2,500 | Once a year, 31 December |
| Gurugram, Haryana | Nil | Monthly |
Same salary. Three different compliance calendars. Each city also brings its own state Shops and Establishments Act, with its own leave and registration rules.
EPF works the same everywhere: 12% from each side, with the employer’s share capped at ₹3,000 a month. The ₹25,000 ceiling took effect on 17 September 2026, as the Labour Ministry release records.
What is the tax risk in a distributed workforce?
Permanent establishment. It is the one that catches founders out.
If a senior person in India negotiates and concludes contracts for your foreign company, Indian tax officers can treat your company as having a taxable presence here. That is permanent establishment risk, and it grows quietly as senior hires spread out. Our guide on avoiding permanent establishment risk in India shows how to set role boundaries.
Tools help with the paperwork. An HRIS that records each person’s work state lets payroll apply the right PT slab.
How does Remunance keep a distributed India workforce compliant?
Remunance employs your people wherever they live in India and applies each state’s rules on payroll. We have placed 1,200+ employees for clients across 34 Indian cities, so a hire in Indore is as routine as one in Pune. Professional Tax, Labour Welfare Fund, EPF and ESIC are filed under our registrations, not yours. To see the state-by-state cost for your locations, request a multi-city payroll estimate.
What else do people ask about distributed workforces?
What is an example of a distributed workforce?
A software company with engineers in Pune, Bengaluru and Kochi, a product lead in London and no head office is one.
What is the difference between distributed and decentralised teams?
Distributed describes where people work. Decentralised describes who makes decisions. A team can be one without the other.
Do distributed employees in India need a local entity?
They need an Indian employer, not your own entity. An employer of record can be that employer until you set one up.
Planning a hire in India?
Our founding team has run payroll and hiring in India for 22+ years, first as Remunance Systems, which was later acquired by ADP.