Part of SKAD HR Group — HR for every stage of business  ·  HRTailor.com  ·  HRTailor.AI
Contact Now →
TMS
Employer of Record +
→ EOR in India PEO GCC India Business Expansion EOR US → India EOR UK → India EOR Japan → India EOR Pricing EOR Cost Calculator Hire Without an Entity GCC Setup Playbook Contractor → Employee Conversion
Contract Staffing +
→ 3rd Party Contract Staffing Manpower Outsourcing Temporary Staffing Staff Augmentation IT Staffing Third-Party Payroll Payroll Transfer NATS NAPS MYKPY
HR Services +
→ Full HR Operations Payroll Outsourcing Talent Acquisition HR Consulting & Advisory PoSH Compliance Statutory Compliance
HR Guides +
→ Free HR Guides Library Contract Staffing Guides EOR Guides Payroll Guides Statutory Compliance Guides Government Scheme Guides Talent Acquisition Guides HR & Staffing Glossary Labour Codes Explained Monthly Compliance Update
About +
→ About TMS Locations Jobs / Careers
☎ +91 22 4896 7640 WhatsApp Us

Tag: Statutory Compliance

  • Payroll Outsourcing India 2026: Cost, Compliance & Switch Guide

    Payroll Outsourcing India 2026: Cost, Compliance & Switch Guide

    Payroll outsourcing India 2026 sits at the intersection of the biggest compliance shift in a decade. First, the Income Tax Act 2025 comes into effect from 1 April 2026, replacing Form 24Q with Form 138 for quarterly salary TDS. Second, the four Labour Codes went operational on 21 November 2025, changing wage definition, payment timing, and exit settlement rules. Consequently, every corporate payroll team is re-evaluating its in-house versus outsourced model.

    This guide walks corporate finance and HR leaders through what payroll outsourcing India 2026 actually costs, what compliance surface it must cover, and when a switch from in-house payroll makes commercial sense.

    Payroll outsourcing India 2026 compliance and cost framework — TMS

    What payroll outsourcing India 2026 must cover

    In 2026, a modern payroll outsourcing engagement now covers seven workstreams. Furthermore, the vendor takes end-to-end ownership from data intake to statutory deposit.

    • Payroll processing — monthly calculation, payslip generation, bank file, disbursement.
    • Statutory deductions — TDS under Form 138, PF, ESIC, professional tax, Labour Welfare Fund.
    • Statutory returns — Form 138 quarterly, Form 140 for other payments, PF and ESIC monthly, PT state-specific, LWF half-yearly.
    • Year-end — Form 16 (now Form 130 under the new Act) issuance, investment declaration reconciliation.
    • Full and final settlement — within two working days of exit under Section 17(2) of the Code on Wages.
    • Employee self-service — payslip download, tax declaration, POSH complaint portal.
    • Reporting — MIS to finance, headcount reconciliation, statutory audit support.

    Payroll outsourcing India 2026: the Labour Codes wage rule impact

    Additionally, the Code on Wages introduces a unified wage definition. Basic wage plus dearness allowance plus retaining allowance must be at least 50 percent of total remuneration. Consequently, PF, gratuity, and bonus contributions all rise for employees whose current basic sits below 50 percent of gross.

    For a corporate payroll team, three practical points follow:

    • You need a one-time salary restructure across the workforce; a capable payroll partner runs this as a project with employee consent flows.
    • Employer PF and gratuity accrual rise by 10 to 20 percent for previously low-basic salary structures.
    • The Yearly balance sheet gratuity liability increases; brief the CFO before the next audit cycle.

    Additionally, wages must now be paid by the 7th of the following month for units under 1,000 employees. Furthermore, full and final settlement of wages must happen within two working days of exit, while gratuity retains its 30-day timeline. You can verify Section 17 obligations on the Ministry of Labour and Employment portal.

    Form 138 and the Income Tax Act 2025: what changes on 1 April 2026

    The Income Tax Act 2025 replaces the 1961 Act from 1 April 2026. Salary TDS reporting moves from Form 24Q to Form 138, filed quarterly. Additionally, Form 26Q becomes Form 140, Form 27Q becomes Form 144, and TCS return Form 27EQ becomes Form 143. Form 16 salary certificate becomes Form 130.

    For payroll operations, this means:

    • TDS challan software must upgrade to the new form schemas before the first Q1 return (due 31 July 2026).
    • Similarly, Employee Form 130 (salary certificate) issuance replaces the annual Form 16 process.
    • Section 392 governs salary TDS while Section 393 covers all non-salary TDS, both effective from 1 April 2026.

    Consequently, a payroll outsourcing partner should already have transitioned its filing engine and issued a transition note to every client.

    DPDP Act 2023: the new data layer over payroll outsourcing India 2026

    The Digital Personal Data Protection Act 2023 applies to every employee data flow between your organisation and any payroll processor. Consequently, your payroll partner must collect and process employee data on a lawful basis, share only what is necessary, and log access.

    Additionally, three vendor obligations to demand in your MSA:

    • Named Data Protection Officer or Grievance Officer with 72-hour breach notification.
    • Documented data transfer agreement for any cross-border processing (relevant for MNC parents).
    • Employee data disposal timeline post-exit, aligned with statutory retention windows.

    Cost model for payroll outsourcing India 2026

    Meanwhile, pricing follows two common structures. Firstly, a flat per-employee-per-month fee (PEPM). Secondly, a hybrid of base platform fee plus per-transaction charge for exits, one-time projects, and audits.

    In particular, typical 2026 India market bands sit around:

    • Small mid-market (50 to 500 employees) — ₹150 to ₹350 PEPM.
    • Mid to large enterprise (500 to 5,000 employees) — ₹80 to ₹200 PEPM with tiered discounts.
    • Large enterprise (5,000+ employees) — ₹40 to ₹120 PEPM plus custom SLA fees.
    • Add-ons — full and final settlement (₹500 to ₹2,000 per exit), one-time restructure projects, expat payroll.

    Additionally, GST at 18 percent applies on the service invoice. These are directional bands based on 2026 market surveys.

    When does payroll outsourcing India 2026 beat in-house?

    Run this five-point test. If three or more are true, an outsourcing move usually pays back within 12 months.

    1. Your in-house payroll team is under 3 people for a 500+ workforce (compliance load exceeds capacity).
    2. You operate across 3 or more states with different PT and LWF slabs.
    3. Your leadership expects headcount to grow 30 percent or more over the next 18 months.
    4. You have received a statutory notice or audit query in the last 24 months.
    5. You want to redirect the payroll team’s time to HR analytics, employee experience, or M&A integration work.

    Consequently, the switch is less about cost and more about compliance resilience and management bandwidth. Furthermore, the annual audit trail is materially cleaner with a dedicated processor than with in-house staff juggling other tasks.

    Vendor vetting checklist for payroll outsourcing India 2026

    Also, score potential partners on eight dimensions:

    1. Labour Codes readiness — templates and computations updated for the 50 percent wage rule and Section 17 exit timeline.
    2. Income Tax Act 2025 readiness — Form 138 filing engine live, Form 130 issuance mapped.
    3. DPDP Act compliance — named DPO, breach notification SLA, data transfer agreement template.
    4. State coverage — active PT and LWF filings in every state where you operate.
    5. Employee self-service — mobile-friendly portal, tax declaration flow, payslip archive.
    6. Integration — clean two-way sync with your HRMS (Workday, SAP SuccessFactors, greytHR, Keka).
    7. Turnaround SLAs — payroll close by day 3 of following month, F&F within 2 working days.
    8. Escalation and audit trail — named account manager, quarterly compliance sign-off, immutable log.

    Common mistakes in switching to payroll outsourcing India 2026

    Notably, three mistakes appear again and again in transitions:

    • Underscoping the historic clean-up. Legacy PF mismatches, missing employee KYC, and untagged tax investments show up in the first month. Budget two months of parallel run.
    • Skipping the DPDP employee notice. When you share employee data with a new processor, DPDP requires a fresh notice. A one-line addition to the payslip is not enough.
    • Bundling too many services in year one. Start with core payroll plus statutory. Add expat, ESOP, and analytics in year two once base delivery is stable.

    Frequently asked questions

    Is payroll outsourcing legal and safe in India?

    Yes. In practice, payroll outsourcing is a routine and well-established engagement model. The processor operates as a data processor under DPDP and as your service provider under the Contract Act. Statutory liability for deposits stays with the employer, so oversight is still required.

    Does payroll outsourcing India 2026 mean my payroll team disappears?

    No. Instead, a lean in-house team of one or two people typically stays to own vendor management, employee escalations, and MIS review. The vendor handles processing, filings, and compliance updates.

    How is Form 138 different from Form 24Q?

    Form 138 replaces Form 24Q from 1 April 2026 under the Income Tax Act 2025. The form structure and schema are largely similar for salary TDS reporting, but the section references and filing utility are new. Your vendor should already have transitioned.

    Can a payroll partner handle expat and international assignments?

    Yes, but not every vendor does this well. Ask for case studies on inbound and outbound assignments, tax equalisation, and shadow payroll. Additionally, confirm DPDP handling for cross-border employee data.

    How long does the transition to a new payroll partner take?

    In general, the typical timeline runs 8 to 12 weeks for a 1,000-employee organisation across three states. Furthermore, the first two months should run in parallel with in-house or the outgoing vendor to catch mismatches.

    Bottom line for the corporate finance leader

    Payroll outsourcing India 2026 has moved from “nice to have” to “compliance-critical” for any mid to large employer. The Income Tax Act 2025 transition, Labour Codes wage restructure, and DPDP Act obligations sit on top of the usual PF, ESIC, and PT filings. Consequently, running this in-house at scale is now measurably harder than it was two years ago. A capable outsourcing partner absorbs the change management and lets your team focus on higher-value HR and finance work.

    Need a payroll outsourcing partner with full Labour Codes and Income Tax Act 2025 readiness? Talk to the TMS Payroll Outsourcing team for a costed proposal within 48 hours.

  • Contract Staffing India 2026: IR Code Guide for Employers

    Contract Staffing India 2026: IR Code Guide for Employers

    Contract staffing India 2026 is a different game from what it was in 2024. First, the four Labour Codes went operational on 21 November 2025. Furthermore, the Ministry of Labour published draft Central Rules on 30 December 2025 and has been finalising them through 2026. Consequently, every large employer running contract labour, staff augmentation, or fixed-term hires needs to revisit its playbook.

    This guide walks corporate HR and procurement leaders through what contract staffing India 2026 looks like under the Industrial Relations Code and adjacent codes, where the compliance surface has widened, and how to structure future engagements with lower risk.

    Contract staffing India 2026 compliance and cost framework — TMS

    What changed on 21 November 2025 for contract staffing in India

    The Industrial Relations Code, 2020 replaces the Industrial Disputes Act, the Trade Unions Act, and the Industrial Employment Standing Orders Act. Additionally, the OSH Code subsumes the Contract Labour (Regulation and Abolition) Act. Both directly affect how you hire and manage third-party contract workers.

    Three headline shifts:

    • Retrenchment and layoff approval threshold rose from 100 to 300 workers.
    • Standing orders now apply at 300+ workers, up from 100.
    • Fixed-term employment is formally recognised across every sector, with pro-rated gratuity from day one.

    Consequently, the working model most large employers have relied on (staff augmentation via a licensed contractor) still works, but the terms have tightened. You can verify the current status on the Ministry of Labour and Employment portal.

    Contract staffing India 2026: licensing and thresholds

    Under the OSH Code, contract labour licensing applies to contractors who deploy 50 or more contract workers at a principal employer’s premises (up from the earlier 20-worker CLRA threshold in most states). Under the OSH Code, every establishment employing 10 or more workers must obtain a single registration within 60 days, which then permits engagement of contract labour without a separate CLRA-style registration.

    For a corporate procurement team, three practical points follow:

    • Confirm your staffing partner holds a valid licence under the new OSH Code framework in every state where you deploy workers.
    • Review your principal-employer registration for each site; state notifications are rolling in phases.
    • Migrate old CLRA-era compliance registers to the new OSH Code formats when your state finalises them.

    Wage definition: the single biggest change to contract staffing India 2026

    The Code on Wages introduces a unified wage definition. Basic wage plus dearness allowance plus retaining allowance must be at least 50 percent of total remuneration. Consequently, contract staffing rate cards must be restructured to ensure the contractor’s PF and gratuity accruals reflect the new base.

    Additionally, three cost lines change for any contract staffing arrangement:

    • Employer PF rises for workers whose earlier basic sat well below 50 percent of gross.
    • Gratuity accrual increases on the same base.
    • Bonus computation under the Payment of Bonus provisions of the Code on Wages moves to the new base.

    Expect a 6 to 12 percent all-in cost uplift over 2026-27, depending on the previous CTC structure. Talk to your contractor about the transition timeline; a good partner will absorb one cycle of the restructure and pass through the balance transparently.

    Fixed-term employment vs contract staffing: what to use when

    The IR Code formalises fixed-term employment on a statutory basis. Fixed-term hires get pro-rated gratuity even before completing five years. Furthermore, they must receive the same wages, hours, and benefits as permanent staff. This changes the calculus for project-based engagements.

    Two clean use cases:

    • Contract staffing — best for continuous, high-volume operational roles (customer support, warehouse, IT operations) where you want the contractor to carry employer liability.
    • Fixed-term employment — best for project-specific roles with defined end dates (product launches, migrations, seasonal work) where you want direct control and clear exit.

    Additionally, avoid mislabelling contract staffing as fixed-term to dodge licensing; the label does not survive a labour inspection if the substance is contract labour.

    Section 17 payment timeline and 2-day full and final settlement

    Under Section 17(2) of the Code on Wages, wages must be paid within two working days of an employee’s exit for termination, dismissal, or resignation. Gratuity retains its 30-day timeline. For contract staffing arrangements, this obligation sits with the contractor as the legal employer, but the principal employer should verify it in the SLA.

    Furthermore, wages must be paid by the 7th of the following month for units under 1,000 employees. Ask your staffing partner for their monthly disbursement calendar and reconcile against your PO closures.

    Contract staffing India 2026: POSH, safety, and welfare

    POSH Act obligations apply to every workplace with 10 or more employees, including contract workers at the principal employer’s premises. Consequently:

    1. Your Internal Committee must cover contract workers.
    2. Anti-harassment policies must be shared with contract workers in a language they understand.
    3. Complaint redressal timelines apply the same way regardless of employment type.

    OSH Code welfare obligations also apply to contract workers on your premises. This includes drinking water, sanitation, safety equipment, canteen at eligible headcount, and crèche facility at 50 or more employees (including contract workers) of any gender.

    What to look for in a contract staffing partner in 2026

    Vet potential partners on five dimensions:

    1. Licensing readiness — active OSH Code licences in every state where you plan to deploy.
    2. Wage restructure preparedness — rate cards updated to the 50 percent basic plus DA rule.
    3. Payroll timeliness — track record of month-end closure and 7th-of-month disbursement.
    4. PF and ESIC hygiene — Universal Account Number generation, Pehchan cards issued, monthly challan proof available.
    5. DPDP Act readiness — data protection notice, named Grievance Officer, and a clean data transfer agreement for principal-employer sharing.

    Additionally, ask for a state-by-state rule-tracker that they update monthly. If they cannot produce one, they are not tracking state notifications with any discipline.

    Cost model for contract staffing in 2026

    A typical contract staffing invoice has four cost buckets:

    • Gross wages of the deployed worker (rate card driven).
    • Employer statutory contributions (PF 12 percent of basic plus DA, ESIC 3.25 percent up to ₹21,000 gross, gratuity accrual, LWF where applicable).
    • Contractor’s margin (typically 8 to 15 percent on the total, higher for specialised roles or low volumes).
    • GST at 18 percent on the service invoice.

    Consequently, benchmark quotes on the loaded landed cost per hour or per month, not on the base rate alone. Additionally, ask for line-item transparency so you can spot pass-throughs (uniform, transport, training) that some contractors bundle into margin.

    Frequently asked questions

    Is contract staffing still legal under the new Labour Codes?

    Yes. Contract labour continues to be a lawful engagement model under the OSH Code. However, licensing thresholds have moved and the wage definition has changed, so existing contracts should be reviewed and refreshed.

    Do the new Labour Codes eliminate CLRA?

    Yes. The Contract Labour (Regulation and Abolition) Act, 1970 is subsumed by the OSH Code, 2020. Provisions carry forward with modifications, primarily around licensing thresholds and welfare.

    What is the difference between contract staffing and fixed-term employment?

    Contract staffing routes the employment relationship through a third-party contractor. Fixed-term employment is a direct employment relationship with a defined end date. Fixed-term employees now receive pro-rated gratuity from day one and must get the same benefits as permanent staff.

    Are POSH obligations different for contract workers?

    No. POSH applies uniformly at 10 or more employees on premises, including contract workers. Your Internal Committee must handle complaints from contract workers with the same process and timelines as for direct employees.

    What are the ESIC and PF triggers under the Social Security Code?

    PF applies from 20 employees; ESIC from 10 employees. The PF wage ceiling is ₹15,000 basic plus DA and ESIC covers employees earning up to ₹21,000 gross. Both administered by the contractor for the deployed workers.

    Bottom line for the corporate HR and procurement team

    Contract staffing India 2026 is still viable, still cost-effective, and still the right model for high-volume operational roles. However, the compliance surface has widened. Restructure rate cards for the 50 percent wage rule, refresh contractor licences under the OSH Code, tighten Section 17 payment SLAs, and hold your partner accountable for a monthly state-rule tracker. Do those four things and the model works cleanly through 2026 and beyond.

    Need a contract staffing partner with full Labour Codes readiness across states? Talk to the TMS Contract Staffing team for a costed proposal within 48 hours.

  • Labour Codes EOR India: 2026 Foreign Employer Guide

    Labour Codes EOR India: 2026 Foreign Employer Guide

    Every foreign employer with staff in India is now working out what the labour codes EOR India relationship actually looks like. First, the four Labour Codes went operational on 21 November 2025. Furthermore, the Ministry of Labour published draft Central Rules on 30 December 2025 and has been finalising them through 2026. Consequently, the compliance surface for every India-based hire, direct or through an Employer of Record, has shifted.

    This guide walks foreign employers through what the labour codes EOR India stack must now cover, what your EOR partner should already have done, and where your own contracts and policies need updating. Additionally, it flags the transitions that state rules will still trigger over the next few quarters.

    Labour codes EOR India compliance framework 2026 — TMS Employer of Record

    Labour codes EOR India: what actually changed on 21 November 2025

    The government consolidated 29 older central laws into four codes:

    • Code on Wages, 2019 — wage definition, minimum wages, timely payment, bonus, equal pay.
    • Industrial Relations Code, 2020 — standing orders, retrenchment, layoff, unions, fixed-term employment.
    • Code on Social Security, 2020 — PF, ESIC, gratuity, maternity benefit, gig worker fund.
    • Occupational Safety, Health and Working Conditions Code, 2020 — safety, working hours, leave, welfare.

    Every one of these codes touches an EOR arrangement because your EOR is the legal employer under Indian law. Therefore, when the codes speak of employer obligations, they speak of your EOR partner, with cost pass-through to you.

    Wage structure and payroll: the biggest labour codes EOR India change

    The Code on Wages introduces a unified wage definition. Basic wage plus dearness allowance plus retaining allowance must be at least 50 percent of total remuneration. Consequently, PF, gratuity, and bonus contributions all rise for any employee whose current basic sits below 50 percent of gross.

    For a foreign employer, three practical points follow:

    • Your EOR must restructure salary components for existing employees, ideally at the next appraisal cycle.
    • Employer PF cost may rise by 10 to 20 percent for high-CTC engineers who had a low-basic, high-allowance structure.
    • Full and final settlement of wages must happen within two working days of exit under Section 17(2) of the Code on Wages. Gratuity retains its 30-day timeline.

    Additionally, wages must be paid by the 7th of the following month. Also, written appointment letters are now mandatory for every hire; ask your EOR to backfill these for any legacy employees onboarded via short-form contracts.

    Industrial Relations Code: what foreign employers need to know

    Two provisions matter most for EOR arrangements. Firstly, the retrenchment and layoff approval threshold rose from 100 to 300 workers. Consequently, most foreign employers hiring 10 to 50 India engineers sit well below the approval trigger. However, procedural notice, retrenchment compensation, and due process still apply.

    Secondly, the IR Code formalises fixed-term employment on a statutory basis. Fixed-term hires get pro-rated gratuity even before completing five years. Furthermore, they must receive the same wages, hours, and benefits as permanent staff. This changes the calculus for project-based or contractor-style engagements routed through an EOR.

    Social Security Code and gig workers under the labour codes EOR India setup

    The Code on Social Security merges PF, ESIC, gratuity, and maternity benefit. The trigger points are unchanged: PF at 20 employees, ESIC at 10, both administered by the EOR on its own registrations. Additionally, the PF wage ceiling remains ₹15,000 basic plus DA and ESIC coverage applies up to ₹21,000 gross.

    Two changes matter for foreign employers using contractors or platform workers alongside EOR engineers:

    • Fixed-term contract staff now receive pro-rated gratuity from day one, not from year five.
    • Aggregators (typically platform companies) must contribute 1 to 2 percent of annual turnover to a social security fund for gig and platform workers. This is a new line item for platform-model businesses.

    You can verify current status on the Ministry of Labour and Employment portal.

    OSH Code: hours, leave, and women employees

    The OSH Code caps the working day at 8 hours and the working week at 48 hours. Overtime is allowed up to 125 hours per quarter at double the ordinary rate. Additionally, earned leave now accrues at one day for every 20 days worked, and encashment above 30 days is permitted.

    Women employees can now work in all shifts, including night shifts, with written consent and safety arrangements. Consequently, if your India team runs any 24-hour support or on-call rota, ask your EOR to document the shift policy, transport, and safety measures. Furthermore, the same rules apply to remote-only roles when on-call hours are formal.

    What your EOR partner should already have done

    A capable EOR will have completed the following by mid-2026. Use this as a health check on your current partner.

    1. Rewritten appointment letter templates to reflect the Code on Wages definitions.
    2. Restructured salary components for all managed employees to meet the 50 percent basic plus DA rule.
    3. Updated payroll cut-off so wages land by the 7th of the following month.
    4. Built a two-working-day full and final settlement workflow.
    5. Refreshed leave and overtime policies against the OSH Code.
    6. Documented night shift policy for any women employees working outside standard hours.
    7. Registered on and kept current the establishment code on the Shram Suvidha portal.
    8. Named an Internal Committee under POSH with contact details in every appointment letter.

    Labour codes EOR India state rules: the moving piece

    Labour is a concurrent subject in India, so both central and state rules must sit in place before every provision can be enforced end to end. Some states have moved fast. Others are still drafting. Consequently, a few provisions will apply in Karnataka months before they apply in West Bengal, or vice versa.

    For a foreign employer, this means two things. First, ask your EOR for a state-by-state tracker of where your employees sit and which rules have been notified there. Second, do not treat all-India rollout as uniform in your compliance dashboards. Your EOR should be updating monthly.

    DPDP Act 2023: the compliance layer that sits alongside the labour codes

    The Digital Personal Data Protection Act 2023 is not part of the Labour Codes, but it applies simultaneously to every employee data flow between your India EOR and your home entity. Consequently, your EOR must collect employee data on a lawful basis, share only what is necessary, and log access.

    Furthermore, cross-border transfer of employee data (payroll files, tax records, ID documents) needs a documented data transfer agreement. Ask your EOR for their standard template and the name of their Data Protection Officer or nominated Grievance Officer.

    Cost impact of the labour codes on your EOR bill

    Expect a moderate increase in your all-in India EOR cost through 2026 and 2027, driven mostly by the wage restructure. Directional impact:

    • Employer PF and gratuity accrual rise by 10 to 20 percent for previously low-basic salary structures.
    • Backfilling appointment letters and running fresh state-level registrations may add a one-time EOR fee.
    • ESIC contribution is unchanged unless the wage ceiling revises from ₹21,000 (proposed ₹30,000, not notified as of mid-2026).
    • New leave accrual may raise your accrued liability by 5 to 8 percent on the balance sheet.

    Additionally, factor in a modest EOR service fee increase reflecting their compliance uplift. A good partner will be transparent about the components rather than bundling them.

    Frequently asked questions

    Are the labour codes fully in force in 2026?

    The four Labour Codes went operational on 21 November 2025. However, several provisions rely on state rules that are still being notified in phases through 2026. Your EOR should be tracking state-by-state readiness.

    Does the new wage definition apply to my India engineers hired through an EOR?

    Yes. Your EOR is the legal employer, so the 50 percent basic plus DA rule applies to every employee on its payroll. Consequently, expect your EOR to propose a salary restructure at the next review cycle.

    What is the exit process under the Code on Wages in 2026?

    Wages, including notice pay and unused leave encashment, must be paid within two working days of the last working day under Section 17(2). Gratuity retains its 30-day timeline. Your EOR handles the mechanics; you approve the settlement calculation.

    Do I need to register as an employer in India if I use an EOR?

    No. The EOR is the legal employer of record on its own PAN, PF, and ESIC registrations. Consequently, you do not need to register any Indian entity for hiring purposes. You may still need to register for other reasons, such as invoicing Indian customers.

    What happens if my EOR is not compliant with the new labour codes?

    Legal liability sits with the EOR as the employer of record. However, reputational and continuity risk sits with you. Consequently, always ask for a written note on Labour Codes and state rule readiness, and revisit vendor selection if the answers are vague.

    Bottom line for the foreign employer

    The labour codes EOR India relationship is now the primary compliance surface for every India-based hire in 2026. A capable EOR partner absorbs most of the mechanical work: wage restructure, appointment letter refresh, payroll timing, F&F workflow, and POSH committee. Your role is to hold them to a monthly state-rule tracker and to align your own home-entity contracts with the new expectations.

    Need a Labour Codes readiness review for your India EOR arrangement? Talk to the TMS Employer of Record team for a costed compliance briefing.

Powered by Joinchat