MonoHRAn Employer of Record (EOR) lets you hire full-time employees in India without first setting up a local entity. MonoHR acts as the legal employer of record for your India-based team, taking on payroll, statutory compliance, contracts, and benefits while you keep day-to-day direction over the work. This page explains what an EOR is, what it covers, how it compares to setting up your own entity or engaging contractors, and the India compliance details that matter before you make an offer.
What is an Employer of Record in India?
An Employer of Record in India is a partner that serves as the legal employer of your India-based team members. The EOR assumes the employment duties and liabilities on your behalf, managing payroll, benefits, taxes, and statutory compliance, while you continue to direct the actual work, set priorities, and manage performance.
Working with an EOR lets you hire employees in India without standing up a local entity or learning the full detail of Indian labour law before you start. India offers a deep, skilled, and cost-effective talent pool across technology, operations, customer support, finance, and more. An EOR lets you reach that talent quickly and compliantly, so you can scale, onboard, and run a genuinely borderless team without an in-country presence of your own.
Hire without entity setup
Setting up your own Indian entity means company registration, bank accounts, statutory registrations, ongoing filings, and a local administrative function, all before your first hire starts. An EOR removes that fixed cost and timeline. MonoHR already holds the legal employer infrastructure, so the employment workflow becomes faster, clearer, and easier to operate from day one. You sign the work; MonoHR carries the employment relationship.
What EOR covers
EOR support spans the full employment lifecycle for your India-based staff, from a compliant offer and contract through onboarding, monthly payroll, statutory deductions, and ongoing administration. MonoHR keeps the documentation, payroll coordination, and compliance records organized so nothing falls through the gaps.
- Compliant employment agreements aligned to Indian labour law
- Monthly payroll processing and payslips
- Statutory deductions and filings (PF, ESI, professional tax, TDS)
- Statutory and supplementary benefits administration
- Onboarding documentation and employee records
- Local compliance coordination across Indian states
Built for hiring in India
MonoHR's EOR coverage is purpose-built for the Indian market rather than adapted from elsewhere. The aim is to keep you compliant, supported, and moving fast across every Indian state.
- Built for Indian compliance: full alignment with India's labour laws, taxes, and statutory rules
- Reliable human support: an India-based team for quick, dependable help in local working hours
- Local expertise: people who know India's employment landscape and can guide your decisions
- Clear, simple pricing: transparent and predictable, with no hidden charges
India compliance and statutory obligations
As the legal employer, an EOR takes on India's statutory employment obligations. These are the core items MonoHR manages on your behalf so your team stays compliant from the first payroll run.
Provident Fund (PF / EPF) is contributed at 12% by both the employee and the employer, with a wage ceiling of ₹15,000 for mandatory coverage. Employees' State Insurance (ESI) is contributed at 0.75% by the employee and 3.25% by the employer (historically stated as 1.75% employee and 4.75% employer) and covers employees earning up to ₹21,000. Professional tax is a state-level levy ranging from ₹200 to ₹2,500 per year depending on the state and salary slab. Income tax is deducted at source (TDS) from salary each month, and employees receive Form 16 as their annual TDS certificate. Gratuity accrues under the 15/26 formula (15 days' wages for every completed year of service, based on a 26-day month) and is generally payable after 5 years of continuous service. The Code on Wages, 2019 consolidates and modernizes several wage-related laws, including minimum wage rules, which vary by state, scheduled employment, and skill category.
- Provident Fund (PF): 12% employee + 12% employer; wage ceiling ₹15,000
- ESI: 0.75% employee + 3.25% employer (stated historically as 1.75% / 4.75%); covers up to ₹21,000
- Professional tax: ₹200–₹2,500 per year, varies by state
- TDS deducted monthly from salary; annual Form 16 issued to employees
- Gratuity: 15/26 formula, generally after 5 years of continuous service
- Code on Wages, 2019 governs minimum wage and wage-related compliance (state-specific)
EOR vs own entity vs contractor
The right India hiring path depends on how fast you need to start, how much fixed cost and ongoing administration you want to carry, and whether the relationship is genuine employment or genuinely independent contracting. This comparison frames the trade-offs so you can choose deliberately.
| Consideration | EOR (MonoHR) | Your own entity | Contractor |
|---|---|---|---|
| Time to start hiring | Fast — no entity required | Slow — registration and statutory setup first | Fast, but classification must be genuinely independent |
| Who is the legal employer | MonoHR | Your company | Neither — independent engagement |
| Upfront and fixed cost | Low; per-employee fee | High; setup plus ongoing entity overhead | Low; per-engagement |
| Statutory compliance (PF, ESI, PT, TDS) | Handled by the EOR | Your responsibility to run and file | Generally not applicable to true contractors |
| Direction of daily work | You direct the work; EOR handles employment | You direct and employ directly | Limited; over-direction risks misclassification |
| Best fit | Fast starts, small teams, market tests, distributed hiring | Large, long-term India presence | Genuinely independent, project-based work |
When to use EOR
EOR is the strongest choice when you need to hire quickly, test the India market, support a small or growing team, or simply avoid the fixed cost and timeline of entity setup. If you expect a large, permanent India footprint, your own entity may eventually make sense. If the work is genuinely independent and project-based, contractor management may be the better route — but when the work pattern looks like employment, EOR or direct employment is the compliant path. You can model the cost side with the MonoHR calculators before committing to a route.
Frequently asked questions
What is an Employer of Record (EOR) in India?
An EOR in India acts as the legal employer for your employees in the country, handling payroll, compliance, contracts, taxes, and benefits while you manage day-to-day work and performance.
How does an EOR help with hiring in India?
An EOR helps you hire employees in India without setting up a local entity. It handles all legal, compliance, and administrative responsibilities while you focus on managing your team's work.
Is hiring through an EOR compliant with Indian labour laws?
Yes. A reputable EOR ensures full compliance with Indian labour laws, tax regulations, and statutory requirements such as PF, ESI, professional tax, and TDS. As the legal employer, the EOR takes on those compliance responsibilities.
Who manages the employee's daily work, us or MonoHR?
You manage the employee's daily work, tasks, and performance. MonoHR handles all employment-related administrative tasks, including payroll, compliance, benefits, and legal obligations.
What types of roles can I hire through MonoHR's EOR service?
You can hire virtually any type of role through MonoHR's EOR service, including software engineers, designers, customer support, operations, finance, and more across a range of industries.
What statutory contributions does the EOR handle?
As the legal employer, the EOR manages India's statutory obligations: Provident Fund (12% from both employee and employer, with a ₹15,000 wage ceiling), ESI (0.75% employee and 3.25% employer, covering employees earning up to ₹21,000), professional tax (₹200–₹2,500 per year depending on the state), and monthly TDS with annual Form 16 for employees. Gratuity accrues under the 15/26 formula and is generally payable after 5 years of continuous service.