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COUNTRY TOPIC GUIDE COST INTENT

EOR Cost in India: 2026 Provider Pricing, EPF Taxes & Gratuity

Comprehensive commercial guide to Employer of Record costs in India. Detailed analysis of EOR platform fees ($199–$599/mo), statutory employer EPF (12%), Gratuity Act accruals (15 days/yr), state Professional Tax, and Indian Pvt Ltd incorporation break-even.

Desk: EOR.one Global Employment Intelligence Desk
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Last Reviewed: 2026-09-14
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Sources: 2 primary citations
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Status: deep research
KEY STATUTORY & RESEARCH BENCHMARKS
Typical Indian EOR Platform Fee $199–$599 / employee / month Flat monthly SaaS fee covering ROC compliance and PAN/TDS payroll
Employer Provident Fund (EPF) 12% of basic wage (3.67% EPF + 8.33% EPS pension) Statutory retirement contribution on basic wage component
Payment of Gratuity Act Accrual 4.81% of basic salary (~15 days/year) Statutory lump-sum retirement benefit for staff completing 5+ continuous years
Total Statutory Employer Burden ~14%–18% of basic salary structure Statutory EPF, ESI (if applicable), Gratuity, and State Professional Tax

1. Indian EOR Cost Economics

India represents the world's largest engineering hub for international technology enterprises. Using an EOR in India eliminates the $5,000–$15,000 cost and 3–4 month setup delay of incorporating a Private Limited (Pvt Ltd) subsidiary with the Registrar of Companies (ROC).

2. Salary Structuring & Statutory Employer Burden

Under Indian labor regulations, total employer contributions are calculated predominantly on Basic Salary rather than total gross CTC (Cost to Company):

  • Employees' Provident Fund (EPF): Employer contributes 12% of basic wage (3.67% to EPF and 8.33% to EPS pension scheme).
  • Payment of Gratuity Act, 1972: Employers must accrue approximately 4.81% of basic salary to fund the statutory 15 days' salary per year of service payable after 5 years.
  • Employees' State Insurance (ESI): 3.25% employer contribution applicable for workers with gross wages up to ₹21,000/month.

Employment Rules & Compliance: For Indian employment contracts, state Shops & Establishments compliance, probation norms, and termination regulations, see our India Hiring & Employment Guide.

Jurisdiction Limitations & Considerations:
  • Compensation in India is structured into Basic Wage (typically 40–50% of gross), House Rent Allowance (HRA), and Special Allowances.
  • State Professional Tax (PT) is capped at ₹2,500 per employee per year.

Research Sources & Citations

Methodology v1.0 →

This guide is corroborated against the following structured sources:

Employees' Provident Fund Organisation (EPFO) — Contribution Slabs ↗ Ministry of Labour and Employment (India) · Social Security Authority · Accessed 2026-10-16 Claim verified: "12% statutory employer contribution towards EPF and EPS pension funds"
Tier 1
Ministry of Labour and Employment (India) — Payment of Gratuity Act, 1972 ↗ Government of India · National Labor Ministry · Accessed 2026-10-16 Claim verified: "Mandatory gratuity entitlement equal to 15 days of basic wages per completed year of tenure"
Tier 1

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