Quick answer: An EOR fee is what an employer of record charges for being your team’s legal employer in India, on top of salary and statutory costs. It is either a flat amount per employee per month or a percentage of salary. GST at 18% applies unless the invoice qualifies as an export of services.
- Flat fees stay the same whatever the employee earns.
- Percentage fees rise with every raise, bonus or senior hire.
- Employer PF, gratuity provision and insurance are pass-through costs, separate from the fee.
- An EOR invoice to a foreign client is zero-rated only if all five conditions in s.2(6) of the IGST Act are met.
How do flat and percentage EOR fees compare?
Flat fees reward you for hiring senior people. Percentage fees reward the provider.
Suppose one provider charges a flat USD 99 per employee per month and another charges 10% of gross salary. The 10% figure here is illustrative, not a market rate.
| Monthly gross salary | 10% percentage fee | Flat fee |
|---|---|---|
| ₹50,000 | ₹5,000 | USD 99 |
| ₹1,50,000 | ₹15,000 | USD 99 |
| ₹3,00,000 | ₹30,000 | USD 99 |
Now give the ₹1,50,000 engineer a 10% raise. Under the percentage model, the fee climbs by ₹1,500 a month, or ₹18,000 a year, for the same payroll run, the same filings and the same support. Nothing else changed.
What sits outside the EOR fee?
Everything the law or the employee’s contract requires. These lines make up the total employment cost.
- Gross salary.
- Employer PF at 12% of wages, capped at ₹3,000 a month on the ₹25,000 ceiling.
- EDLI and EPF admin charges, about ₹125 each at the ceiling.
- Gratuity provision, roughly 4.81% of wages.
- ESI at 3.25% for anyone earning up to ₹21,000 a month.
- Health insurance, laptops and any agreed benefits.
Watch for providers that bundle some of these into the fee, or quietly mark them up. Ask for a line-by-line invoice. Our guide to employer of record cost explains each line, and EOR cost vs direct hire compares the whole bill.
How does GST apply to an EOR fee?
At 18%, usually on the whole invoice, not just the fee. Market practice and most advance rulings treat salary recovered by the EOR as part of its taxable supply.
That changes when you are abroad. If you pay in foreign currency and every s.2(6) condition is met, the supply is an export and is zero-rated. The Grant Thornton note on the 2026 IGST change sets out the conditions. Check them with your provider before the first invoice.
The master services agreement should state the fee, the currency, the GST position and when the fee can change. Some providers also take a security deposit against the first invoices.
How does Remunance price its EOR fee?
Remunance charges a flat fee from USD 99 per employee per month, and passes salary, employer PF, gratuity accrual and insurance through at cost. Your fee does not rise when you give a raise. You can model the full monthly bill with our EOR cost calculator for India. For a quote on your actual roles, get an itemised EOR quote.
What else do people ask about EOR pricing?
How much does an EOR cost in India?
Salary plus statutory costs plus the provider’s fee. The fee is either a flat monthly amount or a percentage of salary.
Is GST charged on EOR fees in India?
Yes, at 18%, usually on the full invoice. Exports of services to foreign clients can be zero-rated if the legal conditions are met.
Are there hidden EOR fees?
Sometimes. Set-up fees, exit fees, FX margins and marked-up benefits are the usual suspects, so ask for every one of them in writing before you sign.