Use an employer of record in India and you can put people on the ground there without an Indian company of your own. The EOR signs their contracts and pays them, deals with the contributions, and leaves the work itself to you. None of that is new.<\/p>\n\n\n\n
What changed is the law underneath it. Four Labour Codes switched on across India on 21 November 2025, folding 29 older central labour laws together. Five months later, on 1 April 2026, the Income-tax Act of 1961 gave way to a new one. Many EOR guides online still describe the old rules. Hire in India this year and your contracts, your payroll and your annual paperwork all sit under rules those guides never mention.<\/p>\n\n\n\n
Below: what an EOR in India handles today, what the Codes changed for a foreign employer, what stays on your desk, and when an entity of your own starts to look better. This is general information rather than legal advice. Confirm your specific position with Indian counsel.<\/p>\n\n\n\n
An employer of record in India becomes the legal employer of staff who work for your company, so you can hire without registering an Indian entity. It issues the appointment letter and employment contract, which the Labour Codes now require every worker to receive. It runs monthly payroll and deducts tax at source on salary. It handles registration and contributions for provident fund and employee state insurance where the establishment crosses the thresholds, which is 20 or more employees for EPF and 10 or more for ESI. It also deducts Professional Tax in states that levy it, and issues the annual salary tax certificate, now Form 130, by 15 June. What it does not do is manage the work. The engineer or analyst reports to your team, follows your priorities and is judged by your managers. The EOR carries the employment, you carry the operations, and that split holds for India as of 2026 under the new Codes.<\/p>\n\n\n\n
For how the model works in general, and how it compares with other hiring routes, see our guide to the employer of record model<\/a>.<\/p>\n\n\n\n Since 21 November 2025, four statutes have done the job 29 central labour laws used to do. The Payment of Wages Act, the Industrial Disputes Act, the EPF and ESI Acts and the Payment of Gratuity Act all live inside the new Codes now. For a foreign company hiring through an EOR, three changes matter most. Every worker must now receive an appointment letter. Fixed-term employees became eligible for gratuity after one year of service instead of five, applicable from 21 November 2025. And social security coverage was extended to gig and platform workers, with contributions from the aggregators that engage them. The rollout is not finished. The Ministry of Labour has said that state rules apply where the State Government is the appropriate government, and as of May 2026 many state rules were still awaited. Treat India’s framework as settled at the centre and still moving in the states.<\/p>\n\n\n\n The practical upshot is that an EOR contract drafted before November 2025 may need revising. If you already employ people in India through a provider, ask when their templates were last updated.<\/p>\n\n\n\n The EOR carries the employment. You carry the work.<\/p>\n\n\n\n On the EOR side sit the employment contract, payroll, tax deduction at source, provident fund and ESI where they apply, Professional Tax, statutory registers and the year-end certificate. Salary tax is the fiddly part this year. Pay for March 2026 and earlier belongs to the old Act; anything paid from 1 April 2026 falls under the Income-tax Act 2025. Keeping those two regimes straight through the first transition year is exactly the kind of work that belongs with a provider doing it for many employers.<\/p>\n\n\n\n On your side sit hiring decisions, day-to-day management, performance and the substance of any disciplinary issue. You also carry one question no EOR can take off you: whether your activity in India creates a taxable presence for your company there. That depends on what your Indian staff do, and it is worth reading our explainer on permanent establishment risk<\/a> before you scale a team.<\/p>\n\n\n\n Hiring your first people in India? Book a consultation<\/a> and we will walk through the scope with you before anything is signed.<\/p>\n\n\n\n Yes, in the sense that nothing prohibits it, but Indian law does not define it either.<\/p>\n\n\n\n We searched the Ministry of Labour, the Press Information Bureau, the India Code and the official gazette, and found no statute or regulator guidance that defines or regulates an “employer of record” as such. The model works through ordinary employment law: the EOR is the employer on the contract and carries the employer’s statutory duties. That is a different position from Singapore, where the regulator has published a specific restriction on EORs sponsoring work passes, covered in our guide to what an EOR can and cannot do in Singapore<\/a>.<\/p>\n\n\n\n No specific rule does not mean no risk, though. What is on paper has to match what happens. An arrangement where the EOR is the employer on paper while your company controls everything, including pay and termination, invites the question of who the real employer is. Keep the division of responsibilities written down and followed.<\/p>\n\n\n\n When the team gets large, permanent and central to the business.<\/p>\n\n\n\n An EOR fits a first hire, a small team, a market you are testing, or a team you might wind down. It avoids incorporation and the ongoing corporate filings an Indian subsidiary brings. As the team grows, the balance shifts. A large permanent workforce, a need to sign customer contracts locally, or a plan to build an Indian operation for the long term all point toward your own entity eventually. Many companies start on an EOR and move staff across once the entity exists, which is a normal path rather than a failure of the first choice.<\/p>\n\n\n\n There is no fixed headcount at which the entity wins. It depends on how long you plan to stay, what the team does and how much corporate overhead you are willing to carry. If you are also employing in other Asian markets, our piece on multi-country payroll<\/a> looks at whether to run them through one provider.<\/p>\n\n\n\n We deliver from India alongside Malaysia, the Philippines and Uzbekistan, and the model is the same in each.<\/p>\n\n\n\n We hold the HR side: the employment contract, payroll, statutory compliance and benefits. You keep operational management of the people doing the work. There is no minimum headcount, so a single engineer in Bengaluru is a real engagement rather than an exception. Where it helps, our staff can work from your premises rather than remotely. Pricing follows a four-tier structure based on seniority and function rather than a flat fee per head, and our explainer on what employer of record services cost to run<\/a> sets out how that works. For a neighbouring market run on the same model, see our guide to employer of record in the Philippines<\/a>, and for delivery-side work in India, outsourcing to India<\/a>.<\/p>\n\n\n\n What is an employer of record in India?<\/strong><\/p>\n\n\n\n It is a provider that becomes the legal employer of people who work for you in India, which lets you hire there without an Indian entity. The provider holds the contract, pays salaries, deducts tax and handles the statutory contributions. Your own managers direct the work and judge performance.<\/p>\n\n\n\n Is employer of record legal in India?<\/strong><\/p>\n\n\n\n Nothing in Indian law prohibits it, and no statute defines it. The model rests on ordinary employment law, with the EOR as the contracted employer carrying the employer’s statutory duties. The arrangement should reflect reality, so keep the division of responsibilities between you and the EOR written down and followed.<\/p>\n\n\n\n How did the Labour Codes change hiring in India?<\/strong><\/p>\n\n\n\n They replaced 29 central labour laws with four Codes on 21 November 2025. Since then every worker has to get an appointment letter, and fixed-term staff earn gratuity after one year rather than five. Plenty of state rules were still missing in 2026, so expect more change.<\/p>\n\n\n\n What is Form 130 in India?<\/strong><\/p>\n\n\n\n It is the yearly salary tax certificate an employer hands each employee, and it took over from Form 16 when the Income-tax Act 2025 arrived on 1 April 2026. The deadline is still 15 June after the tax year. An employer of record issues it for the people it employs.<\/p>\n\n\n\n Can I hire just one employee in India through an EOR?<\/strong><\/p>\n\n\n\n Yes. SummitNext sets no minimum headcount, so a single hire in India is a normal engagement. EPF and ESI apply according to the establishment’s headcount thresholds, which the EOR manages. One hire is often how companies start before deciding whether an Indian entity is worth setting up.<\/p>\n\n\n\n When should I set up my own entity in India instead?<\/strong><\/p>\n\n\n\n Consider your own entity when the Indian team becomes large, permanent and central to the business, or when you need to sign customer contracts locally. There is no fixed headcount trigger. Starting on an EOR and moving people across once the entity is ready is common, and it means the first hires never wait.<\/p>\n\n\n\n An employer of record in India still does what it always did: it lets you hire without an entity while you direct the work. What changed is the rulebook, with four Labour Codes from November 2025 and a new Income-tax Act from April 2026. Make sure any EOR you use is working to the new framework, and keep the line between their employment duties and your operational control clear.<\/p>\n\n\n\n Our client results from SummitNext partnerships<\/a> cover how regional teams are structured in practice. Costs vary by role, seniority and country. Speak with our team<\/a> for a costing tailored to your headcount.<\/p>\n\n\n\nWhat Did the Labour Codes Change?<\/h2>\n\n\n\n
What Does the EOR Carry, and What Stays With You?<\/h2>\n\n\n\n
Is an Employer of Record Legal in India?<\/h2>\n\n\n\n
When Does Your Own Entity Make More Sense?<\/h2>\n\n\n\n
How Does SummitNext Handle EOR in India?<\/h2>\n\n\n\n
Frequently Asked Questions<\/h2>\n\n\n\n
The Bottom Line<\/h2>\n\n\n\n