Employer of Record (EOR) in India
An Employer of Record (EOR) in India is a third-party entity that helps companies legally hire, manage, and pay Indian talent without the need to establish a local entity. It acts as their legal employer and manages the complexities of compliance with the labor laws, onboarding, HR, payroll, and benefits.
Global Squirrels is an Employer of Record company in India that can fulfill your resource requirements quickly and cost-effectively. We offer a SaaS platform that handles both staffing and payrolling (EOR/AOR). It manages everything from sourcing candidates based on your job and sharing curated profiles in 2-5 business days to scheduling interviews, onboarding your chosen candidates, and managing their HR, payroll, and benefits compliantly.
As we assume employer obligations and liabilities, Global Squirrels ensures compliance with the labor and employment laws in India, keeping your businesses protected from any risks. In addition to this, our staffing and EOR/AOR platform also provides tools to help you manage your remote workforce, such as timesheet and leave management, pay increase, termination, and SquirrelTracker (tracks their time, productivity, and activities).
Global Squirrels also operates as a Professional Employer Organization (PEO) in India, assisting companies that are looking to hire talent here.
Trusted by growing businesses & enterprises
Recognized for excellence across leading review platforms
This platform worked out well for us. Instead of working with agencies we were able to hire resources from Philippines on a long term basis. We are currently paying payroll cost and monthly license fee per employee. The value we seen with this company is they were able to source us curated profiles based on our job needed and pricing is great compared to other EOR platforms.
How it works?
1. No foreign entity needed
With a legal entity like our EOR, you can skip the time-consuming and expensive process of establishing an entity to hire in India.
2. Quick access to top talent
Get curated profiles in 2-5 business days after you post a job on the platform. We handle sourcing and vetting to match candidates with your requirements.
3. Compliance management
Our platform will ensure that the offer letters/contracts, payroll, and benefits provided comply with Indian labor laws and regulations.
4. HR-administration
We will handle the intricacies of all HR-admin tasks, such as payroll/payments, benefits administration, and tax withholding.
5. Manage admin and legal
You gain full control over your hired staff, including tasks and productivity, while our EOR will handle the legal and administrative aspects of their employment.
6. Benefits administration
Our EOR provides benefits provisions, such as health insurance, leaves, retirement benefits, allowances, and other entitlements as per the law.
Global Squirrels is one of the best EOR service providers in India. Hire top talent without employer obligations!
Benefits
- Up to 80% savings: Hire skilled and experienced professionals in India while saving up to 80% with our platform.
- Hire without the hassle: Our portal sources top talent, vets them, schedules interviews, onboards your chosen candidates, and manages their HR-admin, payroll, and benefits.
- Zero risk to your company: Eliminates the chances of non-compliance with the labor laws and regulations, keeping your employees and the business protected from any risk.
- Tools to manage remote staff: Global Squirrels’ platform also offers tools to help you manage the productivity and performance of your remote talent in India.
Interested in working with our Employer of Record services in India?
Table of Contents
Worker classification in India:
From employees to contractors
Global Squirrels is a staffing and payrolling platform that can help you hire talent based on your job and onboard your self-sourced candidates in India compliantly and hassle-free. Our Purple Plan will handle onboarding, offer letter generation/negotiation, payroll/payments, legal compliance, and benefit administration for staff already sourced by you. The Orange Plan sources and recruits talent based on your job requirement as well as manages their AOR/EOR. The Blue Plan offers similar features and allows your hired staff to work from one of our dedicated offices in India. This plan is suitable for companies that prefer better management and security.
Expand into India, hassle-free. Global Squirrels manages your payments and compliance for all workers (employees & contractors).
In India, worker classification is important for determining the legal rights, entitlements, and the nature of the employment relationship. The classification focuses on determining whether a worker is employed as a permanent employee, contractor, temporary worker, or freelancer. Understanding these will help businesses to comply with the labor laws, while also defining the scope of worker benefits. Additionally, utilizing Employer of Record services in India can assist businesses in managing these classifications efficiently, thus ensuring compliance with local regulations while handling payroll, benefits, and legal responsibilities seamlessly.
Permanent employees
Permanent employees are individuals who are hired on a long-term basis with an ongoing employment contract. The benefits for these employees include:
- Minimum wage: It depends on the industry and region and is guaranteed by the Minimum Wages Act
- Provident Fund: Contributions to retirement funds and bulk payment after a certain number of years of service
- Leave entitlements: Paid sick leave, maternity leave, and annual leave as per the law
Contract workers
Contract workers are usually hired for a certain project or period. This is often done via an EOR in India. The benefits include:
- Payment for services rendered: The employee is paid on contract terms
- Project-based incentives: Usually include bonuses or completion rewards
Temporary workers
Temporary workers are employed for short-term assignments or peak seasons. They are usually hired via an EOR company in India. The benefits for temporary workers are:
- Hourly/daily wage: Compensation for work hours or project completion
- Flexible work hours: Short-term flexibility but minimal job security
Freelancer
Freelancers and consultants are self-employed professionals who will work on certain projects. The benefits of freelancing include:
- High pay per project: The payment is made based on the scope of work
- Flexibility: Control over work schedule and client selection
Employment agreements in India
Global Squirrels takes care of drafting contracts/agreements as per local laws in India.
An employment agreement is a legally enforceable document that outlines the terms and conditions, guidelines, and responsibilities of both the employer and the worker. This aids in regulating the formal relationship between the two, who are service providers and recipients.
Types of employment contracts
In India, there are four different kinds of employment contracts. Employees and businesses alike can decide which is best for them and take appropriate action. Additionally, an employer of record in India will help businesses in complying with the same.
Permanent employment contract
- The most fundamental and often utilized contract between employers and employees.
- Given to employees who work either full-time or part-time.
- These employment contracts don’t have a set expiration date because they end whenever the employee or the business decides to change their minds.
Fixed-term agreement
- Independent employers are the primary users of a fixed-duration agreement.
- This kind of employment contract includes terms and conditions with a specified end date.
- The fixed-duration agreement thoroughly outlines the beginning and ending dates of the job, working hours, details of the salary and bonuses, guidelines for rendering their services, and responsibilities.
- Independent contractors are granted privileges under these kinds of employment contracts when they are employed by the business.
Casual employment contract
- The casual employment contract combines permanent and fixed-term agreements.
- This contract will include a specified date for the work or agreement termination.
- Similar to the permanent contract, there are fixed working hours for the employees who join under it.
Zero-hour worker contract
- This type of contract does not specify the fixed working hours for any employees.
- Flexibility and time management are considered for these types of employment contracts.
- The employees are not bound to work solely for a specified employer, as they can choose to provide their services to other employers, too, while working for the previous one.
- This type of employment contract is chosen by many for the benefit of fluidity in working environments.
Important components of the employment contracts in India
The employment laws in India lay down a few obligations and terms of employment that both employees and employers alike are required to follow. Some of them include:
Job title and responsibilities | This is the most important section of a contract and must be clearly defined to prevent misunderstandings. Employers must highlight the employee’s title, job duties, and reporting structure. |
Working hours | A typical working week should not exceed 8 hours per day and 40 hours per week. Also, if the job is term-based, mention the start and end dates. It must specify the clauses for breaks and overtime, including the required rate of pay for any hours worked beyond the standard limits. |
Overtime | The overtime pay should be 200% of the basic pay. It will apply to employees working beyond 9 hours a day and 48 hours a week. According to the law, the maximum overtime allowed in India is 1 to 3 hours a day. |
Probation period | Often, it lasts 3 to 6 months and might extend up to 1 year based on a company’s policy. The contract must specify the criterion on which the performance of the employee shall be evaluated. Based on this, a decision will be made whether to confirm the services, extend the probation period, or terminate due to unsatisfactory performance. Most contracts include a shorter notice period during the probationary period, which can range from one week to 30 days. |
Anti-discrimination laws | Employees are protected against discrimination based on gender, caste, religion, and disability. The contract must highlight that the employer is committed to adhering to the Equal Remuneration Act of 1976 and the Indian Constitution (Articles 15 and 16), ensuring equal pay for equal work. |
Health and Safety Act | The contract should specify that the employer is committed to abiding by the Occupational Safety, Health, and Working Conditions Code of 2020 (OSH Code) and ensuring workplace safety by protecting workers from hazards. It must clearly outline the clauses regarding the responsibilities of both the employer and the employee in relation to occupational health and safety. |
Notice period | In India, the notice period typically ranges from a month to 90 days for confirmed employees, depending on their role. Employers must also specify the clauses related to the consequences of not serving the notice period, buyout option, etc. It also sets out grounds for instant termination, eg, fraud, theft, etc. |
Intellectual Property (IP) | It should be clearly stated that all the IP produced by the employee during the course of employment is owned by the employer. The employee is responsible for keeping the IPs confidential and must not engage in their disclosure or unauthorized use even after the employment period. |
Dispute Resolution | Highlight the Arbitration and Conciliation Act, 1996, by outlining a mandatory process for mediation, conciliation, or arbitration, such that the employer has a certain degree of control over how disputes may be resolved. Adding this clause will also ensure that the contract complies with the legal requirements in India. |
Post-Employment (Post-Termination) | The main components in this clause typically detail confidentiality obligations, return of company property, notice period, termination and severance pay, and full and final settlement (FnF). Ensure that all clauses are written clearly, reasonably, and comply with the Indian Contract Act, 1872. |
Payroll in India
Global Squirrels, your Employer of Record (EOR), handles payroll, taxes, and full compliance for your hired employees, contractors, and freelancers.
Payroll calculation in India involves determining the total salary an employee will earn and ensuring compliance with multiple labor laws and tax regulations. The process includes calculating the gross salary, applying the deductions, and determining the net salary. EOR services in India can simplify this process by managing payroll and ensuring compliance with all regulations, helping businesses avoid legal risks and streamline operations.
Payroll contributions | Amount or % |
Provident Fund (PF): This contribution covers Employee’s Provident Fund (EPF) and Employee’s Pension Scheme (EPS). EPF is for claims related to unemployment and EPS is for pension after retirement. | 12% of the employee’s basic salary is capped at USD 20.27 (approx) per month. |
Employee’s State Insurance (ESI) | 3.25% of employee’s monthly gross pay if the monthly salary is < USD 236.5 0% for employees with a salary over USD 236.5 |
Employer health insurance contribution | 50% of the total health insurance cost for the employee and his/her dependents. Varies from USD 2.7 to USD 20.27 per month |
Gratuity: Accrued and will be paid to employees after 5 years of continuous employment. Paid only after they leave the company. | 15 days of gross pay for every year. Approximately 4.1% of an employee’s gross salary. |
Approx payroll cost to hire in India | 15% per hire |
Indian payroll is governed by multiple statutory and legal requirements, which include:
- The Payment of Wages Act, 1936: This will regulate the timely payment of wages.
- The Minimum Wages Act, 1948: Ensures that employees are paid at least the minimum wage defined by the government.
- The Payment of Gratuity Act, 1972: Provides a bulk benefit to employees upon retirement or resignation after a certain period of service.
Businesses should adhere to local rules and regulations, and partnering with an Employer of Record company in India can simplify this process, thus ensuring compliance and eliminating any related issues.
Social Security Contributions (EPF/EPS)
Indian social security is primarily governed by the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 (PF Act).
- Applicability: Mandatorily applies to establishments employing 20 or more individuals, or those that register voluntarily.
- Contribution Rates: Employees (including foreign nationals) must contribute 12% of their salary to the Provident Fund. The employer must make a matching 12% contribution, totaling 24%.
- Pension Fund Allocation: Out of the employer’s 12% share, 8.33% of the salary (capped at USD 169 per month for Indian employees) is allocated to the Employees’ Pension Scheme (EPS). Contributions must be deposited by the 15th day of the following month.
- International Workers (IW): Both Indian and foreign cross-border workers qualify as ‘international workers’.
- Exemption: An IW from a country with a Social Security Agreement (SSA) with India is exempt from Indian social security if they are contributing to their home country’s social security program and are considered a ‘detached worker’ under the SSA’s terms.
Employee benefits in India
When you work with Global Squirrels, we will provide your hired talent in India with all the legally-mandated benefits, including health insurance, leaves, social security, gratuity, and more. Our platform will assume employer obligations, ensuring your company is protected from any legal disputes, lawsuits, and penalties.
As your Employer of Record in India, Global Squirrels will provide your hired staff with the benefits mandated by law.
In India, employee benefits are governed by a combination of statutory requirements and voluntary offerings from employers. These benefits are designed to ensure the well-being, financial security, and overall work-life balance of employees. Some of the key employee benefits available in India are:
Employee Provident Fund
The Employee Provident Fund (EPF) is a mandatory retirement saving scheme that benefits both employees and employers.
- Employee contribution: 12% of basic salary + dearness allowance
- Employer contribution: 12% of basic salary + dearness allowance. Out of this, 3.76% is credited to the employee’s EPF account, and 8.33% is directed towards the EPS.
Employee Pension Scheme
The Employee Pension Scheme (EPS) is a part of EPF and provides pension benefits to employees after disability, retirement, or death.
- Employee contribution: The employee will not contribute to the EPS separately. It is a part of 12% made by the employer
- Employer contribution: 8.33% of the basic salary. This amount is sent directly to the EPS fund.
- It is mandatory for an employee who has an EPF account and whose salary (basic + dearness) at the time of joining was below USD 169.
Employee State Insurance
The Employee State Insurance is a self-financing health insurance scheme for employees working in certain sectors and earning a salary of up to USD 236.5 every month (or USD 281.5 for disabled employees)
- Employee contribution: 0.75% of gross salary
- Employer contribution: 3.25% of gross salary
- If a company has an establishment with 10 or more employees, it is mandatory for the employer to provide them with ESI benefits.
Gratuity
Gratuity is a lump sum paid to employees who complete 5 years of continuous service with the employer.
- Calculation: 15 days of salary for every year of service, based on the last drawn salary
- Benefits: A retirement benefit that rewards long-term service
Maternity leave
Female employees are entitled to maternity leave as per the Maternity Benefit Act, 1961.
- Duration: 26 weeks (for employees with less than two children) or 12 weeks (for employees with more than two children)
- Benefits: Paid maternity leave for childbirth, including time off for prenatal and postnatal care.
Health insurance
Employers will provide health insurance coverage for employees and their families. This may be extended to spouses, children, and even parents.
- Coverage: This will include medical expenses, hospitalization, daycare treatments, etc.
- Benefits: Financial support during medical emergencies and routine health check-ups.
Leave policy in India
Global Squirrels’ EOR platform has built-in tools to help you manage and track employees’ leaves. Everything from leave balance, leave application, and approval to public holidays can be easily tracked on our platform.
Leave policies in India are governed by multiple labor laws and regulations, which might vary depending on the type of employment, state-specific laws, and industry. The goal of these policies is to provide employees with adequate time off for personal, health, and emergency needs while also ensuring business continuity. An employer of record service in India will handle the compliance related to the leaves. The types of paid leave are given below:
Annual leave
Annual leaves are commonly referred to as Privilege Leave (PL) or Earned Leave (EL), and are provided to employees for personal reasons such as vacations or family obligations.
- Eligibility: Most employees are eligible for earned leave after completing a year of service.
- Employees who work under the Factories Act, 1948, are entitled to 1 day of leave for every 20 days worked.
- Accrual: Earned leave is normally accrued at a rate of 15–30 days annually.
Sick leave
Sick leave is provided to employees when they are unable to work because of illness or medical conditions.
- Eligibility: Sick leave is given in accordance with business regulations. A lot of businesses offer 12 to 15 days of sick leave every year.
- Carry Forward: Depending on business policy, unused sick leave is frequently carried over to the following year.
Maternity leave
Maternity leave is a benefit available to female employees who are expecting a child.
- Eligibility: Under the Maternity Benefit Act, 1961, women are entitled to 26 weeks of paid leave for the birth of their child.
- Conditions: The employee should have worked for at least 80 days in the 12 months preceding the date of delivery.
Paternity leave
Paternity leave is granted to male employees to take care of their newborn child.
- Eligibility: While not legally mandated for all organizations, multiple private companies will provide 7-15 days of paid paternity leave.
- Conditions: Some companies will offer paternity leave only for the first child, while others will extend it for multiple children.
Leave without Pay
Employees might have to take Leave without Pay in situations where they have exhausted their paid leave balance or require extended time for personal reasons.
- Eligibility: LWP is usually granted when employees request more leave than what they have been given. It is typically approved on a personal basis.
- Consequences: The period of leave without pay may impact an employee’s salary and benefits, as they won’t receive compensation during that period.
Bereavement leave
Multiple companies offer bereavement leave to employees who have lost a family member or loved one.
- Eligibility: The amount of leave varies, usually ranging from 3 to 7 days.
- Conditions: It is usually offered with full pay and may be granted for the death of immediate family members like parents, spouse, or children.
Employment laws in India
As an EOR, Global Squirrels assumes the legal liability of complying with the labor laws and regulations in India, eliminating the hassle for you to navigate the complex and evolving legal landscape.
Any foreign employer hiring talent from India must comply with the numerous laws and regulations established by the Indian Government. Many companies struggle to navigate these. This is where you can leverage the expertise of an Employer of Record in India and ensure compliance with the laws, such as:
- The Payment of Wages Act, 1936: Ensures that a worker’s compensation is paid on time, as mentioned in the company’s offer letter/agreement, and prevents exploitation and unauthorized and unethical deductions from their pay.
- The Trade Unions Act of 1926: Enables labor unions to be legally formed and registered for both workers and employers, and provides the framework governing them, including immunity from civil suits and prosecutions arising from trade disputes.
- The Minimum Wages Act of 1948: Empowers the Government to standardize minimum wage rates for workers. The law also mandates them to regularly review and revise these wage rates.
- The Payment of Bonus Act, 1935: The Act mandates the payment of an annual minimum bonus (8.33%) and a maximum bonus (20%) to employees of certain establishments employing 20 or more staff.
- The Employees Compensation (Amendment) Act, 2017: Mandates employers to inform their employees of their rights to compensation for injury by accident.
- The Maternity Benefit (Amendment) Act, 2017: Increases the maternity leave period for women to 26 weeks for the first two children. For two or more children, the law provides 12 weeks of maternity leave.
- The Employees State Insurance Act, 1948: Offers medical and cash benefits under the Employees’ State Insurance (ESI) Corporation and Fund, with contributions from both employers and employees.
- The Industrial Disputes Act, 1947: Provides a pathway to investigate and settle industrial disputes arising between employees and employers, aiming to promote peace at the workplace.
- The Contract Labour Act, 1970: Regulates better working conditions and amenities for contract workers, including employment and termination, while ensuring the primary employer is responsible for statutory compliance.
- The Payment of Gratuity Act, 1972: Grants a one-time lump sum benefit to employees who have continuously worked for at least 4 years and 8 months at an establishment. Employers are liable to pay the benefit upon the termination of employment due to retirement, resignation, or death.
Personal income tax in India
As your Employer of Record in India, Global Squirrels will manage all the aspects of statutory and payroll obligations, including the deduction and remittance of personal income taxes as per the Indian tax laws.
Taxation of individuals in India is subject to their residential status in the current tax year. They are as follows:
- Resident and ordinarily resident (ROR): subject to tax in India on their worldwide income, wherever received.
- Resident but not ordinarily resident (RNOR): subject to tax in India on the income that accrues/arises or is deemed to accrue/arise in India, or is received or deemed to be received in India.
Alternate personal tax regime (APTR)
The table below constitutes the revised tax rates under the ATPR, effective from 1st April, 2025:
Taxable income (USD) | Tax on column 1 (USD) | Tax on excess (%) | |
Over (Column 1) | Not over | ||
0 | 4507 | 225 | 0 |
4508 | 9015 | 676 | 5 |
9016 | 13522 | 1352 | 10 |
13523 | 18030 | 1803 | 15 |
18031 | 22538 | 2253 | 20 |
Source: PWC
Surcharge
If the total income of an individual exceeds USD 56,347 in a tax year, a surcharge shall be levied as per Indian labor laws.
Taxable income (USD) | Surcharge (%) |
Up to 56,347 | 0 |
56,348 to 112,689 | 10 |
112,689 to 225,382 | 15 |
225,383 to 563,454 | 25 |
Requirements to run payroll in India
Foreign companies hiring talent in India must comply with mandatory registration requirements for PAN and TAN, according to the Income Tax Act, 1961. Employers must also comply with withholding tax (TDS) according to the prescribed slab rates and deposit them to the Government Treasury as per the due dates. The laws also specify that employers are required to provide employees with the TDS certificate (Form 16) and social security benefits, including the provident fund and pension schemes.
Let’s deep dive into the various mandatory payroll requirements in India:
Government requirements
Registration requirements
- Permanent Account Number (PAN): It is a corporate income taxpayer identification number and is mandatory for a company to register for it as per the Income Tax Act, 1961. This unique number is also required to be quoted at the time of filing income tax and undertaking other varieties of transactions in India.
- Tax Deduction Account Number (TAN): Companies must register for the TAN, which is required when collecting or withholding taxes from employees or vendors in India. Multiple TAN registrations will be needed when a company has establishments in more than one location.
Ongoing compliance requirements
- Tax compliance: As per the Income Tax Act 1961, employers are required to withhold taxes on certain payments and deposit them into the Indian Government Treasury. Taxes must be withheld from employees’ salaries at the prescribed tax slab rates at the time the salary is paid or credited to the employees’ account, whichever is earlier. A tax year in India is the period that begins on 1 April of the current year and ends on 31 March of the following year. The Central Government and State Government of India have the power to decide and levy tax slab rates, which are typically subject to annual amendment. In accordance with these tax slabs, the employer must proportionally withhold taxes every time payment is made to employees. If the salary is paid from April to February, the withheld taxes must be deposited into the Government Treasury within seven days from the end of the month in which the salary was paid/credited. Similarly, withheld taxes for salaries paid in March must be deposited by 30 April.
- Quarterly withholding tax returns (Form 24Q): Companies withholding taxes from their employees must file them quarterly by submitting the Form 24Q. The timelines are as follows:
- Quarter ending June: by 31 July
- Quarter ending September: by 31 October
- Quarter ending December: by 31 January
- Quarter ending March: by 31 May
- Issuance of withholding tax certificate (Form 16): By 15 June every year, every company must issue a tax certificate called Form 16 to its employees. This includes details and the amount of tax withheld from their payments over a tax year. Employers can download Form 16 from the Government Tax Office website called TRACES and issue it to their workers only after verifying the details. An EOR in India has expertise in handling employment-related taxes and can manage all aspects, including calculating and withholding, remitting, and filing and reporting taxes. EORs can take over your employer obligations and help your business significantly reduce the risks related to non-compliance with the tax laws in India.
Social security and pension requirements
- Registration requirements
- Provident fund registration and pension registration: According to the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, if a company has 20 or more staff (including contractors), it is mandatory to register for Provident Fund and Pension Fund. These are the two most common social security and retirement schemes for employees, and involve different rules for contributions from both employers and employees. These requirements continuously undergo amendments by the Government, and this is where an Employer of Record in India can help your company stay compliant with the latest laws.
- Ongoing compliance requirements
- Provident and pension funds: Provident fund and pension schemes are two major social security benefits mandated by the Government of India. According to the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, employers having 20 or more employees in an establishment must register for these benefits. The law states that both employers and employees are required to contribute 12% of the pay/salary towards the Provident Fund scheme. However, the employer’s contribution is divided between the provident fund and the pension fund.
- Form IW-1: According to the Employee Provident Fund Organization (EPFO), employers are required to submit Form IW-1, which includes a statement detailing the information of international workers (IW). According to the law, IW is defined as:
- Indian citizen working abroad: An Indian employee who is working in a country that has a Social Security Agreement (SSA) with India and is eligible for that country’s social security benefits under the SSA.
- Foreign national working in India: A non-Indian employee working in an establishment in India, provided they meet one of these conditions:
- They have a Certificate of Coverage (CoC) from a country with which India has an SSA.
- They are contributing to a social security program in their home country, which has a specific bilateral economic agreement (containing a social security clause) with India that was effective before October 1, 2008.
Employment obligations
- Employee State Insurance registration (ESI): Every company with 10 or more workers must register for this mandatory state-specific insurance. Centralized registration can be done where the headcount is high. The company may also be exempted from registration, at the discretion of the ESI officer, if the location does not have a Government hospital. All covered employees must be issued an ESI card that covers their hospitalization.
- Profession Tax (PT) registration: Required by the state-specific law for carrying on business in that location. Once registered, the company must deduct the applicable professional tax every month and remit it to the tax authorities. Below are remittance and filing details for some of the key Indian cities:
- Bangalore: 20th of the following month
- Hyderabad: 10th of the following month
- Mumbai or Pune: end of the following month
- Kolkata: 21st of the following month
- Chennai: half-yearly — 30 September and 31 March
- Delhi: not applicable
- Shops and Establishment Act and Labour Welfare Fund: This registration is labor-specific, carries different filing deadlines for each state, but is not mandatory by law in all states. Before an employer commences their operations in a particular state, they may register the establishment under the Shops and Establishment Act and Labour Act defined in that location. Below are remittance and filing details for some of the key cities:
- Bangalore: 15 January of the following year
- Hyderabad: 31 January of the following year
- Mumbai or Pune: 15 July and 15 January
- Kolkata: 15 July and 15 January
- Chennai: 31 January of the following year
- Delhi: 15 July and 15 January
- New Labour Codes: 4 new labor codes, ‘The Code on Wages, 2019’, ‘Code on Social Security, 2020’, ‘Industrial Relations Code, 2020’, and ‘Occupational Safety, Health and Working Conditions Code, 2020’, will likely replace/subsume the current labor laws. According to the Central Government, this transition is ongoing.
Payroll requirements
Employers must comply with the payroll obligations. To hire in India, they are required to determine a salary structure based on the roles, responsibilities, and levels in the organization. Payment of wages/salaries is typically done once a month, and statutory deductions like income tax, provident fund or pension, professional tax, etc, must be made before initiating the payment. If the employee joins or leaves during a month, the salary payout shall be made on a pro-rata basis. Employers must also issue salary slips to the employees after their salary is credited to their bank accounts.