Irish Companies in India 2026: Hiring Costs and Compliance

Can An Irish Company Hire In India Without Setting Up An Entity?

Yes. An Irish company can legally employ a full-time worker in India without incorporating an Indian subsidiary by engaging an Employer of Record.

The EOR holds the Indian legal entity, issues the appointment letter under Indian law, runs payroll, deducts TDS, and remits EPF and ESI. Your company directs the work. Onboarding typically takes days rather than the months an entity requires.

The arithmetic for a Dublin-based buyer in 2026 looks like this. Take a mid-level engineer in Pune on Rs 12,00,000 per year (roughly EUR 12,400 at mid-2026 rates). Employer EPF, on a Basic of Rs 50,000 per month, is capped at Rs 1,800 per month, against the Rs 15,000 statutory wage ceiling. 

ESI does not apply because gross exceeds Rs 21,000. Gratuity provisions at about 4.81% of Basic. Add an EOR fee: Multiplier charges $400 per employee per month, Deel and Remote charge $599, Asanify charges $99. Total landed cost lands near Rs 13.5 lakh plus the platform fee.

Compare that against an Indian subsidiary, which needs incorporation with the Ministry of Corporate Affairs, a resident director, a local bank account, PF and ESI registrations, and state-wise Shops and Establishments registration.

Remunance’s own EOR cost calculator for India runs both figures against your actual salary.

What Does It Actually Cost to Employ Someone in India From Ireland?

Three statutory employer contributions apply in India, plus two smaller items. None of them are optional, and all of them are the EOR’s legal responsibility to remit if you hire through one. The rates below are in force as of July 2026.

Rates verified against the EPFO’s published contribution schedule (epfindia.gov.in) and current ESIC guidance. ESI rates have not moved since 1 July 2019.

Epf: The Rs 15,000 Ceiling That Most Foreign Employers Misread

EPF is calculated on Basic plus Dearness Allowance only. Not on gross. Not on CTC. HRA, conveyance, and special allowance do not enter the base.

Employee contributes 12%. The employer contributes 12%, split between 8.33% to the Employees’ Pension Scheme and 3.67% to the EPF account.

The statutory wage ceiling is Rs 15,000 per month, so the mandatory employer outgoings cap at Rs 1,800 per employee per month. 

Contribution above that ceiling is voluntary. Many Indian employers pay on full Basic anyway as a retention benefit, and that choice must be stated in the appointment letter. 

One live risk for 2026: on 9 January 2026 the Supreme Court directed the Central Government and EPFO to decide within four months whether to raise the ceiling to Rs 21,000 or Rs 25,000. If it moves, your per-head cost moves with it. Budget for it.

ESI: Why It Usually Will Not Apply To Your Hire

ESI covers employees earning gross wages of Rs 21,000 per month or less (Rs 25,000 for persons with disability). 

Employer pays 3.25%, employee pays 0.75%. Because ESI runs on gross rather than basic pay, and because almost any engineer, analyst, or designer an Irish company would hire in India earns well above Rs 21,000 gross, ESI typically does not apply to the profiles Irish buyers are recruiting.

It matters for support, operations, and junior roles. Two mechanics catch payroll teams out. First, if an employee crosses the ceiling mid-period, deductions continue to the end of that contribution period.

The periods run April to September and October to March. Second, employees on a daily average wage of Rs 176 or less are exempt from the employee share, but the employer still pays the full 3.25%.

Gratuity: The Liability That Accrues Silently

Gratuity applies to any establishment with 10 or more employees. 

The formula is (Last drawn Basic + DA) x 15 x completed years of service, divided by 26. 

A permanent employee qualifies after five years of continuous service. The five-year condition is waived on death or permanent disablement. Payment is due within 30 days of its becoming due, and any delay attracts interest.

Up to Rs 20 lakh is exempt from income tax under Section 10(10). Two things changed on 21 November 2025 under the Code on Social Security, 2020. 

Fixed-term employees now qualify for pro-rata gratuity after just one year, down from five. And the 50% wage rule raises the Basic on which gratuity is computed. If you hire in India on fixed-term contracts, your gratuity liability is materially larger than it was in 2024, and it starts accruing in year one.

Worked Example: A Rs 12,00,000 Engineer In Pune

Assumes Basic set at 50% of CTC, which is what the Code on Wages now effectively forces. Figures are indicative and rounded. Run your own via the EOR cost calculator.

What Changed Under India’s Labor Codes, And Does It Affect Irish Employers?

Yes, and the change that costs you money is not the one making headlines. India consolidated 29 central labour laws into four Codes. 

The Ministry of Labour and Employment reports that 1,228 sections were streamlined into 480, and form filings cut from 181 to 73. Here is the timeline as it actually stands.

Sources: KPMG GMS Flash Alert 2026-127, DLA Piper, and the Ministry of Labour and Employment’s Compliance Handbook for Employers Under the Four Labour Codes.

The 50% Wage Rule is the One That Costs You

Under the Code on Wages, “wages” means all remuneration except a defined list of exclusions, and those exclusions cannot collectively exceed 50% of total remuneration. 

If HRA, conveyance, and special allowance together exceed half of CTC, the excess is added back into wages.

This matters because Indian salary structures were engineered for decades to keep Basic low, often 30% to 35% of CTC, precisely to suppress PF, gratuity, and bonus liability. That structure no longer works. 

The practical effect for an Irish employer: your wage base rises, and PF, ESI, gratuity, and bonus all rise with it. Anyone quoting you an India cost model built before November 2025 is quoting stale law. This is the single most common error we see in inbound inquiries from European buyers.

What Else Changed That An Irish Employer Should Know

• • Fixed-term employment is now formally recognized at national level, and fixed-term staff get pro-rata gratuity after one year rather than five.
  • Appointment letters in a prescribed form are mandatory. Handshake hiring is no longer defensible.
  • Standing orders now apply at 300+ employees, up from 100. Prior government permission for retrenchment likewise moves to the 300+ threshold.
  • Overtime is capped at 50 hours per quarter, and annual leave standardizes at 1 day per 20 days worked.
  • A worker re-skilling fund now requires an employer who retrenches a worker to transfer 15 days of that worker’s last drawn wages within 10 days of retrenchment.
  • Gig and platform workers gain statutory recognition, with aggregators contributing 1% to 2% of annual turnover, capped at 5% of amounts paid to those workers.

Entity or EOR: Which is Right For an Irish Company Hiring In India?

The honest answer depends on headcount and time horizon, not on ideology. Here is the comparison.

If you have already decided on the entity route, read setting up an Indian subsidiary and the complete guide to a subsidiary company in India. 

If you want the co-employment middle ground where you already hold an entity, that is International PEO.

If the person is genuinely independent and project-based, an independent contractor arrangement may fit, though misclassification is the single largest compliance risk in the Indian market and the Codes have tightened around it.

What Do EOR Providers Charge For India In 2026?

Published rates, per employee per month, for India hiring. None of these figures include salary or statutory employer contributions, which you pay on top. The market median for the fee component sits near $399.

Two things the pricing pages tend to skip.

First, the fee is not the cost. Total employment cost is salary plus statutory burden plus the fee, and the statutory burden varies from roughly 3% in South Africa to 40% or more in France. India sits at a low level, between 4% and 17% depending on the salary band, which is a large part of why the corridor works. 

Second, watch what is bundled. A $299 quote with $250 per termination, $50 per off-cycle payroll run, and a 2% FX markup can land above a $399 all-in quote.

Our breakdown of employer of record cost walks through the itemization, and how to choose the right EOR covers the diligence questions worth asking before you sign.

What Notice Period Applies When an Irish Company Exits an Indian Hire?

There is no single national notice period in India. This surprises almost every European employer. The obligation comes from three places at once: the employment contract, the applicable state Shops and Establishments Act, and, for employees classified as “workmen”, the Industrial Disputes Act. 

The contract can specify longer than the statutory floor. It cannot specify shorter.

Two practical points. Due process is not optional: even with valid grounds for dismissal, an employer must issue a show-cause notice, hold an inquiry, and issue a reasoned order. 

Skipping the process can void an otherwise lawful termination. And a buyout is standard practice, typically calculated as monthly CTC divided by 26 (or 30, check the contract), multiplied by the days remaining. 

Under the Industrial Relations Code, the retrenchment notice period for establishments with 100 to 299 workers increases from 30 to 60 days once your state notifies its rules.

What Should An Irish Company Budget Per Role In India?

Indeed reports the average software engineer salary in India at Rs 8,84,740 per year, from 17,300 salaries reported and updated on 6 July 2026. 

That average conceals an enormous spread, because Indian compensation bifurcates sharply between IT services firms and product companies. The ranges below are for total CTC in metro cities.

• • Bengaluru carries a 15% to 20% premium over other metros. Pune and Hyderabad trail Bengaluru by 10% to 15% while offering a materially better cost-of-living ratio.
  • Tier-2 cities run 15% to 25% below metro rates at every level.
  • AI, ML, GenAI, LLM, and cloud-native skills command a 30% to 50% premium over generalist profiles. If you are hiring for those, ignore the averages.
  • CTC is not take-home, and it is not your cost. Indian offer letters bundle employer PF, gratuity provision, and variable pay into the headline number.

 For a fuller picture by city, role, and industry, see our guide to the average salary in India.

Why Ireland And India, And Why Now?

The trade relationship is genuine and growing, but context rather than a reason to hire. 

The reason to hire is that a mid-level engineer in Pune costs a fraction of the Dublin equivalent, speaks English natively in a professional setting, and sits in a time zone that overlaps the Irish working day by several hours.

• • The EU and India concluded free trade agreement negotiations on 27 January 2026, described by the Commission as the largest deal either side has concluded. Ireland, as an EU member, is inside that framework.
  • India and Ireland have had a Double Taxation Avoidance Agreement since 26 December 2001.
  • External Affairs Minister S. Jaishankar visited Ireland on 6 and 7 March 2025, the first visit by an Indian EAM to Ireland.
  • Services trade between the two countries runs at roughly four times goods trade, which is precisely the category an Irish software or life sciences firm operates in.
  • Irish companies with an India presence include CRH, Kerry Group, Glanbia, Diageo, ICON, Connolly Red Mills, Globoforce, Keventer, and the Taxback Group.
    

Primary sources:

• The Embassy of India, Dublin bilateral brief,
• The European Commission’s India trade page,
• The Ireland India Business Association cross-border entity register.

Hiring in India from Ireland?

Remunance is an India-specialist Employer of Record operating a direct Indian entity from Pune.

We handle the appointment letter, payroll, EPF, ESI, gratuity, Professional Tax, TDS, and state-wise Shops and Establishments compliance so you can hire one person or thirty without incorporating.

How Long Does Each Route Take?

The binding constraint on the EOR route is almost never the EOR. It is the candidate’s notice period at their current employer, which in the Indian IT industry commonly runs from 60 to 90 days. Factor that into your plan before you promise your board a Q4 start date.

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