Employer of Record India for Australian Companies — Expand to India Without Legal Entity
The India-Australia relationship entered a new phase in 2022 with the signing of the Economic Cooperation and Trade Agreement (ECTA) — the first major trade deal India signed with a developed economy in over a decade. For Australian companies, this created a compelling case for India expansion across technology, mining services, education, and agriculture. Employer of record India for Australian companies provides a fast, compliant way to place employees in India without establishing an Indian legal entity. TMS handles all employment obligations under Indian law, from payroll in INR to PF filings and state compliance.
Why Australian Companies Are Expanding to India
The ECTA and deepening people-to-people ties have accelerated Indian market interest among Australian businesses:
- The ECTA (signed April 2022) provides preferential tariff access and facilitates services trade including IT, education, and professional services
- Australia’s mining and resources sector sees India as a major buyer of coal, iron ore, and LNG — leading to commercial and technical liaison offices in India
- Australia’s large Indian diaspora — a significant part of Australia’s skilled migration intake — creates natural business bridges between the two economies
- Australian edtech and higher education institutions are expanding India partnerships and need local staff for student recruitment and institutional relations
- Technology companies from Sydney and Melbourne are establishing India development teams to access cost-effective engineering talent
India entity setup takes three to six months and ₹15 to 25 lakh — see DPIIT and MCA. TMS EOR gets Australian companies hiring in India within 7 to 10 days.
What TMS EOR Covers for Australian Companies
TMS acts as the legal employer for your India-based employees. Our EOR service covers:
- Employment contracts in English — State-compliant, covering all mandatory Indian labour law clauses
- Monthly payroll in INR — Salary computation, TDS deduction, payslip generation, and INR net pay disbursement
- Provident Fund — EPF registration, employer and employee contributions, ECR filing, UAN management
- ESIC — Registration, monthly contributions, and returns
- Professional Tax — State-specific deductions and remittances for each employee’s work location
- Gratuity and bonus provisioning — Correct accrual and statutory payment
- HR administration — Offer letters, joining documentation, leave management, F&F settlement
Full compliance scope at Statutory Compliance Services.
5 Steps to Hire in India from Australia
- Requirement brief — Share role, compensation, India city, and start date
- Contract drafting — TMS prepares English-language, Indian-law employment contracts within 48 hours
- Employee onboarding — KYC, PF/ESIC registration, bank verification — 2 to 3 working days
- Payroll go-live — Salary credited, TDS deposited on schedule
- Ongoing HR management — Monthly payroll, filings, dedicated TMS HR pod
Key Compliance Areas for Australian Companies
- India-Australia DTAA — The Double Taxation Avoidance Agreement governs withholding tax on service payments from Australia to India
- FEMA compliance — Cross-border service fee payments from Australia to TMS India follow FEMA remittance guidelines
- PE risk management — EOR structure limits permanent establishment exposure for your Australian entity
- State-specific acts — Shops Act registrations, PT, and LWF managed by TMS for each employee’s state
EOR vs. Entity Setup for Australian Companies
- India entity — ₹15 to 25 lakh, 3 to 6 months, ongoing ROC and audit obligations
- TMS EOR — Monthly per-employee fee, 7-day start, zero entity maintenance costs
When the India team grows large enough to warrant a subsidiary, TMS supports the transition to your own entity. See India company registration.
Australian Industries Expanding to India via EOR
- Technology — Sydney and Melbourne tech firms building Bengaluru and Hyderabad development teams
- Mining and Resources Services — Technical liaison and business development teams near mining equipment hubs in Chennai and Mumbai
- Education — Australian universities and EdTech companies hiring India-based recruitment counsellors and partnership managers
- Financial Services — Back-office, analytics, and fintech teams supporting Australian banking operations from India
- Agriculture and Agribusiness — Indian market entry for Australian agri-exporters needing local business development staff
Why TMS vs. Global EOR Platforms
- India-only focus — Depth over breadth. TMS knows India compliance in detail
- 20+ years of experience — Navigating India’s complex, multi-state labour law environment since 2004
- IST-based team — AEST and IST have a 4.5 to 5.5 hour gap, allowing morning Australia calls to reach TMS before end of India business day
- In-house compliance — No subcontractors. Direct accountability
- Dedicated HR pod — One contact for everything
Frequently Asked Questions
Q1: Does an Australian company need any India presence to use TMS EOR?
No. TMS is the Indian legal entity employing your staff. Your Australian company has no India registration requirement. You pay TMS a service fee from Australia.
Q2: Can TMS hire staff across multiple Indian cities for an Australian tech company?
Yes. TMS manages multi-city India teams under one EOR engagement, handling each state’s specific compliance.
Q3: How are AEST-IST time zone differences handled in TMS’s service model?
TMS operates on IST but assigns a dedicated account manager for each client. Australian clients typically communicate via email and scheduled calls — the 4.5 to 5.5 hour overlap window in Australian mornings is sufficient for most service needs.
Q4: Can the ECTA trade agreement affect how Australian companies structure India operations?
The ECTA primarily facilitates goods and services trade. For employment of Indian staff, Indian labour law applies regardless of the trade agreement. TMS ensures all employment arrangements are compliant with current Indian law.
Q5: What is TMS’s EOR pricing structure for Australian clients?
TMS charges a fixed monthly management fee per employee, quoted in USD or INR. The fee covers payroll processing, all statutory filings, HR administration, and dedicated support. Contact us for a quote based on your headcount and CTC levels.
Hire in India from Australia — Start in One Week
TMS gives Australian companies a proven, fast, and fully compliant path to building India teams without entity complexity.
Contact TMS for an Australia-to-India EOR proposal. See also EOR in India and EOR service overview.
Australian Companies Hiring in India — What to Know
The Australia-India Economic Cooperation and Trade Agreement (ECTA), which entered into force in December 2022, has materially strengthened the bilateral commercial relationship, with Australian companies in mining technology, financial services, agritech, and education increasingly establishing India-based teams for software development, data operations, and back-office functions. India is Australia’s fifth-largest trading partner, and ECTA’s professional services provisions have made it easier for Australian companies to engage Indian professionals. TMS provides Australian companies with a legally compliant, operationally ready India employment infrastructure, eliminating the need to navigate India’s labour law landscape independently.
India Employment Law for Australian Employers
Australian employment concepts governed by the Fair Work Act 2009 — including Modern Award coverage, unfair dismissal thresholds, casual conversion rights, and the National Employment Standards — have no equivalent application to employees based in India. India’s employment framework is a combination of central labour legislation (EPF Act, ESIC Act, Payment of Gratuity Act, Maternity Benefit Act) and state-specific rules under the Shops and Establishments Acts, which govern working hours, leave, and termination conditions for most white-collar employees.
- Shops and Establishments Acts: Most India-based employees of Australian companies fall under state Shops and Establishments Acts; these govern leave entitlements, working hours (typically 48 hours/week maximum), and termination notice requirements.
- Minimum Wages: State governments set minimum wages by sector and skill category; TMS ensures all salaries meet or exceed the applicable state minimum wage notification in the employee’s state of work.
- Leave Entitlements: India statutory leave includes Earned Leave (minimum 15–21 days depending on state), Casual Leave (typically 7 days), and Sick Leave (varies by state). Australian annual leave accrual concepts do not apply.
- Permanent Establishment Risk: Australian companies whose India employees conduct sales, conclude contracts, or maintain a fixed office on the company’s behalf may trigger PE status under the India-Australia DTAA; TMS EOR structure is designed to contain this risk.
- Intellectual Property: Employment contracts under TMS include IP assignment clauses enforceable under the Copyright Act 1957 and Patents Act 1970, ensuring Australian companies retain ownership of work product created by India employees.
Tax & DTAA Considerations for Australia-India Employment
The India-Australia Double Tax Avoidance Agreement (in force since 1991) addresses the taxation of salary income, business profits, and Permanent Establishment for bilateral arrangements. Under Article 15 of the DTAA, salaries paid to a resident of India for employment exercised in India are taxable only in India — Australian companies do not withhold Australian PAYG withholding on India-based employees, and superannuation guarantee contributions do not apply to employees who are not Australian residents earning Australian-sourced income. Australian entities that reimburse an overseas employer (such as TMS) for employee costs may need to report these payments in their Australian tax returns and transfer pricing documentation if the amounts are material. TMS provides monthly cost summaries structured to support Australian transfer pricing compliance where required.
How TMS Manages India EOR for Australian Companies
TMS onboards India employees for Australian companies within 2–3 weeks, providing Australian-facing reporting aligned with AEST business hours for key milestones. For Australian companies exploring India as a new delivery location, TMS offers an initial consultation on employment cost modelling in INR and AUD equivalent before any hiring commitment is made.
- Cost Modelling and Offer Structuring (Week 1): TMS provides a detailed employer cost breakdown — CTC, EPF employer contribution, gratuity accrual, ESIC where applicable, and TMS service fee — denominated in both INR and AUD, allowing the Australian company to make an informed hiring decision.
- Employment Contract and Documentation (Week 1–2): TMS issues an India-law-compliant employment contract, collects statutory documentation (PAN, Aadhaar, cancelled cheque), and initiates EPF and Professional Tax registrations.
- Payroll Commencement (Week 2–3): Salary is structured for India tax efficiency; first payroll is processed with TDS deducted, EPF contributions deposited with EPFO, and payslip issued to the employee. The Australian client receives a parallel cost summary in AUD equivalent.
- Ongoing Management and Annual Compliance (Monthly/Annual): TMS handles monthly statutory filings, annual TDS returns (Form 24Q), Form 16 issuance, and manages leave balances and annual increment processing.
Frequently Asked Questions — Australian Companies Hiring in India
Does ECTA change how we structure employment or payroll for our India team?
ECTA primarily affects tariffs on goods and some professional services market access provisions — it does not alter India’s domestic labour law, statutory contribution requirements, or payroll tax framework. The compliance obligations (EPF, ESIC, TDS, Gratuity) remain the same regardless of ECTA. UK companies hiring now through TMS EOR are not disadvantaged.
How does superannuation work for our India employees — are we obligated to contribute to anything similar?
Australia’s Superannuation Guarantee does not apply to employees who are not Australian residents or earning Australian-sourced income. India has its own mandatory retirement savings scheme — the Employee Provident Fund (EPF) — to which TMS contributes 12% of the employee’s basic salary on behalf of your company as part of the EOR arrangement. TMS includes the employer EPF contribution in the monthly cost summary so your Australian finance team can accurately model the total cost of each India hire.
We already have an Australian-registered company. Do we need an India entity, or can TMS EOR cover all our India hiring indefinitely?
TMS EOR can cover India hiring for as long as the Australian company requires — there is no legal mandate to incorporate an India entity. The decision to incorporate typically depends on headcount scale (India entity becomes cost-efficient above approximately 20–30 employees), the need to hold India assets or enter India contracts directly, or regulatory requirements specific to the sector. TMS can provide a cost comparison between continued EOR and India entity incorporation at any point.
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