Most companies come to us because the math on an Indian entity stops them cold. Setting one up takes months. Keeping it compliant takes forever, and that second part is where things usually go wrong. Below is what you actually take on when you put someone on a payroll in India, and what we handle so you don’t have to.
Why is this hard to get right
There isn’t one rulebook. Indian labour law is split between the centre and the states, because labour sits on the Constitution’s Concurrent List. So a tax like professional tax exists in Maharashtra but not in some other states, and the rate and the forms change the moment your employee moves cities. Layer on rates and due dates that get revised most years, and you have a system that punishes anyone who treats it as set and forget. Miss a single deposit and you’re looking at interest and penalties, and in the worst cases personal liability for the officers who signed off.
That gap is the whole reason an employer of record exists. We become the legal employer of your India team, which means these obligations land on us, not you. The mechanics are on our employer of record services page if you want the full picture.
The statutory obligations we run for you
Every month, a handful of filings come due. Here’s each one, in plain terms.
Provident Fund (EPF)
Provident fund is India’s main retirement saving scheme, run by the EPFO. Employer and employee each put in twelve percent of wages, every month, and it goes into the employee’s PF account. We register your people, run the contribution, and file the challan.
Employees’ State Insurance (ESI)
ESI covers employees earning up to 21,000 rupees a month. It pays for medical care and gives cash during sickness or maternity, funded by a small slice from both sides at the rates the ESIC sets. We enrol everyone who qualifies and file it monthly.
Professional tax
This one catches newcomers out, because it’s a state tax and not every state charges it. Where it applies, it’s a small monthly deduction from salary, capped per year, paid to the state. We apply whatever is correct for the state your employee actually sits in.
TDS and Form 16
Income tax comes out of salary each month, sized to what the employee is expected to earn across the year. We deposit it, file the quarterly TDS returns, and hand each person a Form 16 after the year ends so they can file their own return without chasing us for figures.
Gratuity
Stay five years with the same employer and you’re owed gratuity when you leave, worked out from your last drawn wages and your length of service. We carry that liability on the books and pay it when someone reaches the mark.
Statutory bonus
Employees inside a set wage band are entitled to an annual bonus under the Payment of Bonus Act. We work it out and pay it where it’s due.
Minimum wages and registrations
Pay has to clear the minimum set for the role and skill level, which central and state governments revise from time to time. The establishment itself also needs the right registrations, including under the relevant Shops and Establishments Act. We hold those, so your team is employed on a proper legal footing from day one.
Maternity leave and workplace protection
Eligible mothers get 26 weeks of paid maternity leave under the Maternity Benefit Act, and we administer it. We also keep a working policy and an internal committee for the prevention of sexual harassment at work, which the law requires once you pass ten employees.
The numbers above are current as we write this, and they don’t sit still. We watch the changes and apply the right figure to your payroll, so tracking them never becomes your job.
India’s four Labour Codes
India is rewriting its labour law more or less from scratch. Four new codes, on wages, industrial relations, social security, and occupational safety, fold dozens of older central laws into one set. The government notified them as effective from 21 November 2025, and the central rules that put real detail behind them followed on 8 May 2026.
That sounds finished. It isn’t. Labour is a shared subject, so each state still has to notify its own rules before every clause actually bites, and that is happening at different speeds across the country. The change we watch hardest is the new, wider definition of wages, because it feeds straight into how PF and gratuity get calculated. We follow the codes and the state notifications, take guidance from the Ministry of Labour, and adjust your payroll as each piece goes live. You don’t have to read any of it.
Because the codes are rolling out in stages, this section needs a fixed review cycle. Re-check the central and state position before each quarterly update and revise the wording to match what is genuinely in force.
Looking after employee data
Compliance isn’t only about money moving on time. As the legal employer we hold a lot of personal data about your team, and we handle it under India’s Digital Personal Data Protection framework. We collect what the job needs, keep it secure, and use it only for the purposes we’ve told employees about.
How we actually stay compliant
Knowing the rules is the easy half. Hitting every deadline, for every employee, month after month, is the part that breaks people. Here’s how we don’t.
- We’re a registered Indian employer, with the statutory registrations you need to put someone on a payroll here lawfully.
- Payroll and compliance sit with our own staff. PF, ESI, TDS, Form 16, all of it in house. Nothing gets farmed out down a chain of local vendors, which is usually where accountability quietly disappears.
- Every contribution and return has a deadline, and we run to a filing calendar built to keep them from slipping.
- We keep the paperwork. Registers, challans, returns, employee records, ready for an inspector or an audit whenever one turns up.
- When a rate or a rule moves, we change the calculation and apply it from the date it took effect, not from whenever we noticed.
- Eligible employees get their statutory benefits, including the group medical cover that has been mandatory since 2020.
What you get out of it
The trade is straightforward. You get a team in India. We carry the risk of employing them. No entity to set up, no registrations to chase across three departments, no late nights reading gazette notifications. If you decide later that you do want your own entity, we can walk you through Indian subsidiary setup too. Curious how the two routes compare on cost? Run the numbers in our EOR cost calculator, or read the wider view in our guide to doing business in India.
The reason we can take this on is the in-house model behind it, which we explain on the Why Remunance page. The people who would run your payroll are on the Team page.
Ask us about your own case
Honestly, it’s easier to just ask. Tell us who you’re hiring and where, and we’ll map out which of these obligations apply and how we’d handle each one. Book a free consultation and we’ll take it from there.