Hire Full-Time Employees in India Without Setting Up an Entity
Last updated: October 19, 2026 · Reviewed by the Husys India EOR Payroll & Compliance Team
To employ someone in India legally, you need an Indian employer registered for PF, ESI, professional tax and TDS, and most US companies don't have one. An Employer of Record (EOR) fills that gap: Husys becomes the legal employer in India, and your team directs the work.
"We run our operations around the world with local PEOs. Our largest is in India - Husys."
What is an Employer of Record in India, and how is it different from a contractor or staffing agency?
An Employer of Record in India is a locally registered company that legally employs workers on behalf of a foreign business. It issues the employment contract, runs payroll in rupees, deposits statutory contributions and files returns with Indian authorities. The foreign company keeps full control of the employee's role, work and performance.
An EOR is not a staffing agency: it does not source candidates or supply contract labour. It is also not the same as hiring an independent contractor. An EOR employee is a full-time employee with statutory benefits, which removes the misclassification risk of paying a full-time worker as a contractor. The closest US comparison is a PEO, except that in India the EOR is the sole legal employer, not a co-employer.
How much does India talent cost for your role, and how much will you save?
Pick the role you are hiring for. The calculator shows what that talent typically earns in India in 2026, the total cost of employing them through Husys, and your saving against a US hire. You don't need to know India salaries. Every number can be edited.
–
Your estimated annual saving
–
–
| India cost per hire / month | – |
| Salary + employer PF, ESI, gratuity | – |
| Husys EOR fee (flat) | $99 |
Estimate only. Market ranges are typical 2026 annual CTC. The India figure adds employer PF on top of CTC, so savings are understated, not inflated. Excludes PF admin/EDLI charges, statutory bonus, optional health insurance, equipment, visa and hiring fees. Not tax or legal advice.
Worked example (defaults): Senior Software Engineer, national average. India rate ₹28–50 LPA, midpoint ₹39,00,000. Monthly gross ₹3,25,000; wages (50%) ₹1,62,500; employer PF ₹3,000; ESI ₹0; gratuity provision ₹7,813. Total ₹3,35,813 ÷ 88 = $3,816 + $99 = $3,915 a month, or $46,981 a year. US: $171,980 × 1.30 = $223,574. Saving per hire $176,593 (79%); for 5 hires, $882,967 a year. Full breakdown: The true cost of hiring employees in India.
How does hiring an employee in India through Husys EOR work?
Hiring in India through Husys takes five steps, from candidate selection to the first monthly payroll. You choose the person; Husys handles the legal employment layer.
- Select your candidateSource and interview through your own channels. Share role, salary and start date.
- Approve the contractHusys drafts a state-specific contract with IP assignment and confidentiality built in.
- Employee shares documentsKYC, bank details, experience and relieving letters.
- Onboarded in 8 working hoursCounted from the signed contract and complete documents. PF and ESI registration where applicable.
- Monthly payroll & filingsPayroll, PF, ESI, professional tax and TDS, with one invoice to you.
How fast is onboarding with Husys in practice?
What does Husys handle, and what does your US team handle?
Under an India EOR arrangement, Husys carries the employment and compliance work. Your team keeps the parts that matter to the business: who to hire and what they work on.
Husys handles (the legal employer)
- ✓State-specific employment contract with IP assignment and NDA
- ✓Monthly payroll in INR, payslips and employee self-service portal
- ✓PF, ESI, professional tax, TDS and labour-law filings in all 36 states and UTs
- ✓Leave, holidays and statutory benefits
- ✓Notice, full and final settlement, gratuity and relieving letter at exit
- ✓Tracking labour-code changes, central and state
Your team handles
- Choosing the candidate and approving salary
- Daily work, tools and priorities
- Performance reviews and appraisals
- Deciding on exits and timing
- Paying one monthly invoice in USD
"Employee interactions on the ground are great as if we have our own HR system."
What does the Husys $99 per employee fee cover?
Husys charges a flat $99 per employee per month for EOR in India. There are no setup, onboarding, offboarding, termination, platform or add-on fees. Salary and statutory contributions are passed through at actual cost.
| Cost item | Included in $99 | Billed separately |
|---|---|---|
| Contract, onboarding, offboarding | ✓ Included | — |
| Payroll, payslips, self-service portal | ✓ Included | — |
| PF, ESI, PT, TDS filing work | ✓ Included | — |
| Termination handling | ✓ Included, no fee | — |
| Gross salary | — | At cost |
| Employer PF, ESI, gratuity | — | At cost (statutory) |
| Visa, background checks, recruitment | — | Only if requested |
What your $99 runs every month
How is employing someone in India different from employing in the US?
Employment in India differs from US employment in six ways that affect budget and planning. Each row below is something Husys manages for you.
| Aspect | In the US | In India | Handled by Husys |
|---|---|---|---|
| Employment type | At-will | Contractual; notice of 30–90 days or pay in lieu | Contract terms drafted for you |
| Payroll cycle | Bi-weekly | Monthly | Monthly payroll run |
| Retirement | 401(k), optional | PF: 12% employer + 12% employee, mandatory up to ₹25,000/month wages | PF registration and deposits |
| Health cover | Employer plan | ESI (3.25% employer) where wages are ₹21,000/month or less | ESI where applicable |
| Severance | Discretionary | Gratuity: 15 days' wages per year (5 yrs permanent; 1 yr fixed-term) | Gratuity tracked and paid at exit |
| Salary structure | Single base salary | Basic + DA must be at least 50% of total pay | Salary structured to the 50% rule |
Statutory figures as of October 2026. Sources at the end of the page.
Which Indian states charge professional tax on your employees?
Professional tax (PT) is a state tax on salaries, capped at ₹2,500 per employee per year by Article 276 of the Constitution. The employee's work location decides whether it applies, so two engineers on the same salary can have different deductions. The table covers the main tech hiring hubs for US companies.
| Hiring hub | State | PT on a typical tech salary | Collected | Husys registers & files |
|---|---|---|---|---|
| Bengaluru | Karnataka | ₹200/month above ₹25,000 gross (annual cap ₹2,500) | Monthly | ✓ |
| Hyderabad | Telangana | ₹200/month above ₹20,000 gross | Monthly | ✓ |
| Pune, Mumbai | Maharashtra | ₹200/month, ₹300 in February (₹2,500 a year) | Monthly | ✓ |
| Chennai | Tamil Nadu | Up to ₹1,250 per half-year (Greater Chennai Corporation) | Half-yearly, by local body | ✓ |
| Kolkata | West Bengal | ₹200/month above ₹40,000 gross | Monthly | ✓ |
| Ahmedabad | Gujarat | ₹200/month above ₹12,000 gross | Monthly | ✓ |
| Gurugram, Noida, Delhi | Haryana, Uttar Pradesh, Delhi | No professional tax | — | Not needed |
Rates for FY 2026-27 as of October 2026. Leave and public-holiday rules also vary by state under each state's Shops and Establishments Act; Husys applies the rules for each employee's work location.
What changed for US employers under India's labour codes in 2025–2026?
India's four labour codes replaced 29 central labour laws on November 21, 2025. Central Rules followed on May 8–9, 2026, and states are notifying their own rules on separate timelines. These are the changes that affect US companies employing people in India.
Husys's in-house legal and compliance team tracks central and state notifications and restructures payroll for every client employee. Full analysis: India Labour Codes 2026: What US Companies Must Do.
What does it cost to let an employee go in India?
Letting an employee go in India costs the notice period (served or paid in lieu), full and final settlement within two working days, and gratuity where the employee qualifies. There is no at-will exit, so the terms in the offer letter decide the cost. Husys Data Labs tracks what exits actually cost on its payroll.
What exits actually cost on Husys payroll
Example: a senior engineer on ₹39 LPA earns ₹3,25,000 a month. At 1.5× monthly CTC, a typical exit costs about ₹4,87,500 (≈ $5,540), paid within two working days. Husys adds no termination fee.
Husys Data Labs · exits processed by HusysWhat every India exit includes by law
Exit cost = notice pay in lieu (if not served) + leave encashment + gratuity where eligible, expressed as multiples of monthly CTC. Plan ahead with our exit planning guide.
What costly mistakes do US companies make when hiring in India?
US companies hiring in India tend to make six mistakes. Most stay hidden on the first hire and surface at 5–10 employees, at appraisal or at the first exit, when they are expensive to fix. Termination clauses cause the most compliance issues Husys sees.
Treating exits as at-will
"We can let them go on Friday."
30–90 days' notice, settlement within 2 working days
Risk: disputes and back payFull-time "contractors"
"The contract settles their status."
Full-time, exclusive, managed work counts as employment (check yours)
Risk: back PF/ESI + 12% interestBudgeting on salary only
"The offer number is the cost."
PF, ESI and gratuity are added on top
Risk: 25–30% over budgetOne policy for all of India
"One national policy works."
Tax, leave and holidays vary by state (see state taxes)
Risk: missed filingsLoose offer letters
"We'll sort the details later."
The written offer is binding at appraisal and exit
Risk: appraisal and exit disputesAssuming zero tax risk
"EOR removes all PE risk."
Risk rises if India staff sign deals for you
Risk: Indian corporate taxHow Husys prevents all six
- Notice and exit terms in every contract
- Contractors moved to compliant employment
- All-in cost shown before you hire
- State rules applied in all 36 states and UTs
- Offer terms reviewed before sign-off
- Client activity monitored for PE risk
Which way of hiring in India fits your company?
US companies have six common routes to an India team. Each fits a different stage and priority.
Global EOR platforms
Works well forHiring in many countries through one platform.
Check for IndiaDepth of state-level and statutory support.
India-focused EOR
Works well forTeams hiring mainly or only in India who need compliance depth.
Husys in numbersIn India since 2002 · 5,000+ clients and 50,000+ employees to date · 350+ clients and 4,000+ employees today · ISO 9001 & 27001.
Enterprise global EOR providers
Works well forLarge multinationals with complex procurement.
Check for IndiaPer-employee fees and minimums for small teams.
Low-cost and newer EOR platforms
Works well forPrice-sensitive teams with simple roles.
Check for IndiaWho holds the India registrations; in-house vs. subcontracted compliance.
Hiring contractors directly
Works well forShort, genuinely independent project work.
Check for IndiaMisclassification risk once work becomes full-time.
Your own India entity
Works well forLarge permanent teams or companies selling in India.
Check for India10–16 weeks to first payroll, annual audit, closure costs.
Husys is part of the People2.0 global network.
When should a US company move from EOR to its own India entity?
Most US companies hire in India through an EOR first and decide on an entity later. Tick what is true for you today to see whether "later" has arrived.
How did a Series B SaaS company build a 12-engineer India team without an entity?
A Series B enterprise workflow SaaS company with about 180 employees needed to more than double engineering headcount in two quarters. For a team under 20 people, entity setup would have cost more than it saved and delayed the first hire by three months or more. The company chose Husys as its India EOR.
Every hire received a state-specific contract with IP assignment and confidentiality clauses before day one. Husys managed PF, ESI, TDS and professional tax end to end.
Read the full case studyFrequently asked questions about hiring in India without an entity
Can a US company hire employees in India without an Indian entity?
Yes. A US company can hire full-time employees in India through an Employer of Record (EOR). The EOR is the legal employer in India and runs contracts, payroll, PF, ESI, professional tax and TDS. The US company directs the employee's daily work. No Indian subsidiary, branch or liaison office is needed.
Is using an Employer of Record legal in India?
Yes. EOR is a legal arrangement in India when the EOR is registered as the employer and meets statutory duties: PF and ESI registration and deposits, TDS, professional tax and state labour rules. Check that your EOR holds these registrations in its own name and files them every month.
How long does it take to hire an employee in India through an EOR?
With Husys, an employee is onboarded within 8 working hours of receiving the signed contract and complete documents. Across 1,800 Husys hires, the median was 6.5 to 7 hours from complete documents to onboarded, and 99.6% were onboarded within 8 working hours. Before that point, 60% of delays come from client contract approval and 40% from the employee's documents.
How much does it cost to employ someone in India through an EOR?
Total cost is the employee's gross salary, plus employer statutory costs (employer PF of 12% on wages up to the ₹25,000 ceiling, ESI of 3.25% if wages are ₹21,000 or less, and gratuity provision), plus the EOR fee. Husys charges a flat $99 per employee per month with no setup, onboarding, offboarding, termination or platform fees.
Who owns the intellectual property created by an India EOR employee?
Your company should. Husys employment contracts include IP assignment and confidentiality clauses by default, so work product is assigned to the client. Ask any EOR to show you the IP clause before the first hire, and have your counsel review it against your US agreements.
Can I terminate an employee in India the way I would in the US?
No. India has no at-will employment. Termination follows the employment contract and Indian law: notice or pay in lieu, and full and final settlement, which the labour codes require within two working days. Gratuity applies where eligible. The terms in the offer letter decide the cost of any exit.
What does it cost to let an employee go in India?
Letting an employee go in India costs the notice period, served or paid in lieu, unused leave encashment where state rules require it, and gratuity for eligible employees. Across 100 exits processed by Husys, the median notice period was 45 days and the median exit cost was 1.5 times monthly CTC. Full and final settlement is due within two working days, and Husys charges no termination fee.
When should a US company set up its own entity in India instead of using an EOR?
An entity usually makes sense when you sell to Indian customers, have run an India team for 2–3 years, plan a large permanent team, have local finance, legal and HR capacity, and fully loaded entity costs fall below EOR costs. Until most of these apply, EOR is usually lower risk. Husys provides entity setup guidance and PEO payroll when you reach that point.
Does an EOR create permanent establishment risk for my US company?
An EOR reduces but does not automatically remove permanent establishment (PE) risk. Risk rises if India employees sign contracts or close sales on your behalf. Husys monitors client invoices and the deliverables behind them to help keep activity consistent with the EOR model. Confirm your setup with a tax adviser.
Where can I learn more about hiring in India?
Guides
Related solutions
Case studies
Sources
- India market salaries by role and city premiums: CareerScan, IT Salary Guide India 2026 (May 2026). Junior = fresher (0–1 yr) range. Checked Oct 2026.
- US salaries: U.S. Bureau of Labor Statistics, Occupational Employment and Wage Statistics, May 2025 (medians for mid level; 75th percentile for senior where published; junior estimated at 70% of the median). bls.gov. Checked Oct 2026.
- EPFO, Revision of EPFO Statutory Wage Ceiling FAQs (₹25,000 from Sep 17, 2026). epfindia.gov.in. Checked Oct 2026.
- Ministry of Labour & Employment: labour codes in force Nov 21, 2025; Central Rules notified May 2026. labour.gov.in. Checked Oct 2026.
- ESIC contribution rates and ₹21,000 ceiling. esic.gov.in. Checked Oct 2026.
- Professional tax: state commercial tax departments; Greater Chennai Corporation for Chennai. FY 2026-27 rates, checked Oct 2026.
- Husys: India Labour Codes 2026 (Sep 2026); The True Cost of Hiring Employees in India (Aug 2026); EOR vs Entity India (Jun 2026); Exit Planning in India (Sep 2026).
- Husys case study: Scaling a Core Engineering Team in India Without an Entity (updated Aug 31, 2026).
- Husys Data Labs: aggregated, anonymised Husys payroll and operations data (see methodology above).