India EOR Pricing Explained (2026): Fees, Statutory Costs and What to Ask
Short answer: the cost of an Employer of Record (EOR) in India has three parts. You pay the employee’s salary, the employer’s statutory contributions such as Provident Fund, and the EOR provider’s service fee. Only the third part is the provider’s price. The first two are set by the salary you offer and by Indian law.
Most companies that ask about EOR pricing want one number per employee per month. That number exists, but it is only useful once you know what sits around it. This guide breaks the total into its parts, shows a worked example, and lists the questions buyers ask most often before they sign. For how EOR compares with setting up your own entity, see Employer of Record in India: costs, timeline and when to use one.
What you pay for with an India EOR
An Employer of Record legally employs your team member in India on your behalf. The EOR issues the employment contract, runs payroll, deducts tax, pays statutory contributions and handles exits. You direct the day-to-day work. Your monthly invoice usually has three layers:
- Gross salary. The amount you agree with the employee, paid in Indian rupees.
- Employer statutory costs. Contributions the law requires the employer to pay on top of salary, such as Provident Fund and, for lower salaries, ESI.
- The EOR service fee. The provider’s charge for being the legal employer and running compliance.
Some providers also add one-time charges (setup, onboarding, exit) and currency or bank charges. Ask for all of them in writing before you compare quotes.
The three common fee models
| Fee model | How it works | Works well when | Watch out for |
|---|---|---|---|
| Fixed fee per employee | A flat amount per employee per month, usually quoted in USD | Salaries are mid to high, and you want a predictable invoice | Salary caps or surcharges for higher earners |
| Percentage of salary | A percentage of each employee’s monthly gross salary or CTC | Salaries are low, so a percentage works out cheaper than a flat fee | The fee grows every time you give a raise |
| Tiered by headcount | A fixed fee that drops as your team grows | You plan to scale from a few hires to a team | Check whether the lower rate applies to everyone or only to employees above each threshold |
Whatever the headline rate, compare the total monthly cost, not the fee alone.
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Employer statutory costs in India (October 2026)
These costs apply whichever EOR you use, because they come from Indian law. The main items for a typical office employee are below.
| Item | Employer cost | Applies when | Official source |
|---|---|---|---|
| Employees’ Provident Fund (EPF) | 12% of basic wages (8.33% goes to the pension scheme, 3.67% to the employee’s PF account) | Mandatory coverage up to a wage ceiling of Rs 25,000 per month, in effect from 17 September 2026 | PIB release, Ministry of Labour and Employment, 17 Sep 2026 |
| Employees’ State Insurance (ESI) | 3.25% of wages (the employee pays 0.75%) | Employees earning up to Rs 21,000 per month (Rs 25,000 for persons with disability) | esic.gov.in |
| Gratuity | Many employers set aside about 4.81% of basic wages each month (15 days’ wages for each year, spread over 12 months) | Paid on exit once the employee meets the qualifying service under the Code on Social Security, 2020 | Code on Social Security, 2020 |
| Professional Tax and Labour Welfare Fund | Small fixed amounts that vary by state | Depends on the state where the employee works | State government notifications |
Two practical points. First, most professional salaries in India are above the ESI wage limit, so ESI often does not apply to the roles foreign companies hire. Second, under the new labour codes, if excluded allowances make up more than half of total pay, the excess is counted as “wages” for contributions. Building a salary with a very small basic no longer lowers statutory costs the way it once did. For more on the PF change, see how the Rs 25,000 PF ceiling changes your employer cost.
A worked example
Here is an illustrative calculation for one software engineer with a gross salary of Rs 90,000 per month, assuming basic wages are 50% of gross (Rs 45,000).
| Line | Monthly amount |
|---|---|
| Gross salary | Rs 90,000 |
| Employer EPF: 12% of Rs 25,000 (the wage ceiling) | Rs 3,000 |
| ESI | Not applicable (salary above Rs 21,000) |
| Gratuity provision: about 4.81% of Rs 45,000 | about Rs 2,165 |
| Salary plus employer statutory costs | about Rs 95,165 |
| EOR service fee | Added on top, in the provider’s currency |
If the employer chooses to contribute PF on the full basic rather than the ceiling, the PF line rises to Rs 5,400. Professional Tax and Labour Welfare Fund amounts depend on the state and are left out here. Treat this as an illustration, not a quote.
One-time and exit costs to ask about
- Setup fee. Some providers charge to open your account or onboard each employee; others include it.
- Offboarding. Ask whether full and final settlement, relieving letters and the last payroll run are included.
- Minimum term. Some contracts require a minimum number of months per employee.
- Deposit. Some providers ask for one or two months of total cost in advance.
- Salary changes. Check whether a raise or bonus changes the fee.
Currency, invoicing and bank charges
Employees in India are paid in rupees. Your invoice can usually be raised in USD, EUR, GBP or AED and paid by international wire. Ask how the exchange rate is set, whether any buffer or markup is added, and who bears intermediary bank charges. These small items can move the real cost by a few percent each month.
Questions to ask any EOR provider before you sign
These come straight from the questions companies ask most often when they enquire about EOR in India:
- What is the fee per employee per month for my headcount, in writing?
- Does the fee change with salary? Is there a salary cap?
- Are there setup, onboarding or offboarding charges, or a minimum term?
- Which statutory items are included: PF, ESI, Professional Tax, TDS, gratuity, Labour Welfare Fund?
- Who is the legal employer: your own Indian company or a partner?
- How many working days from signed agreement to the employee’s first day?
- Can you invoice in my currency, and what exchange and bank charges apply?
- Can I see a sample monthly invoice?
- Can you also recruit the person, and what does that cost?
- Can you share references from companies in my country?
Frequently asked questions
Is EOR cheaper than setting up a company in India?
For a small team, usually yes. A company in India brings registration, accounting, audit and payroll set-up costs before the first hire. EOR replaces those with a monthly fee per employee. Many companies move to their own entity once the team is large enough.
Does the EOR fee include the employee’s salary?
No. The fee is the provider’s charge. Salary and employer statutory contributions are billed separately at actual cost.
Do I have to pay ESI for my employee in India?
Only if the employee’s wages are up to Rs 21,000 per month (Rs 25,000 for persons with disability). Most professional roles earn more than this.
What is the EPF wage ceiling in 2026?
Rs 25,000 per month, in effect from 17 September 2026. The employer contributes 12% of basic wages, with mandatory contributions calculated up to this ceiling.
Can I pay my employee in India in US dollars?
The employee is paid in rupees through Indian payroll. Your company pays the EOR’s invoice in your own currency.
Getting a clear quote
Team Management Services (TMS) employs staff in India on its own Indian entity for companies abroad. The fee depends on your team size and salary levels. Salary and statutory costs are billed at actuals. Request a written quote for your team, or use the EOR cost calculator to estimate the total cost first.
Get a clear India EOR quote
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