India is an amalgamation of diverse culture, cuisine, and talent. Today, it stands as one of the most dynamic labor markets in the world, offering a vast and highly skilled workforce across industries. From software engineers in Bengaluru to financial analysts in Mumbai, healthcare specialists in Delhi, and creative professionals in Hyderabad, India continues to be a global hub for innovation and cost-effective talent solutions. For companies seeking scalability, technical expertise, and operational efficiency, India provides an unparalleled advantage.

At the same time, hiring in India comes with complexities. Labor laws vary across states, payroll compliance demands rigor, and tax regulations are multilayered. Setting up a legal entity locally often requires substantial time and resources, delaying entry and adding ongoing administrative burdens.

This is where an Employer of Record (EOR) becomes a strategic partner. By working with Gloroots as your EOR in India, you gain instant access to India’s deep talent pool while ensuring global compliance. With Gloroots, you can hire employees in India without the costs and delays of entity setup, manage payroll and benefits seamlessly, and stay focused on building strong teams that drive growth.

What are the key facts about India’s economy and workforce?

India is the world’s fourth-largest economy and one of the fastest-growing major markets, making it a prime destination for global expansion. With a GDP projected to exceed USD 4 trillion in 2025, the country’s economy is driven by strong contributions from services, manufacturing, and technology sectors. The services industry—especially IT, finance, and professional services—accounts for nearly half of the GDP, positioning India as a leader in knowledge-based industries.

From a workforce perspective, India offers one of the largest and youngest labor markets globally, with a median age of just 28 years. Every year, millions of graduates enter the job market, many from top-tier engineering, business, and medical institutions. This makes India not only a hub for software development and digital transformation but also for finance, healthcare, R&D, and creative industries.

Key Workforce Facts at a Glance

• Labor force size: Over 520 million workers, one of the largest globally.
• Youth advantage: Median age of 28, with over 65% of the population under 35.
• Education pipeline: Nearly 1.5 million engineers graduate annually, alongside tens of thousands of finance, law, and healthcare professionals.
• Urban talent hubs: Bengaluru, Hyderabad, Pune, and Gurugram dominate IT and R&D; Mumbai leads in finance, media, and consulting; Chennai and Ahmedabad are strong in manufacturing.
• Language & communication: English is widely spoken in business, reducing communication barriers for global companies.
• Cost advantage: Hiring in India can be up to 60% more cost-efficient compared to North America and Western Europe while maintaining high-quality output.

However, India’s labor market is highly regulated, with compliance requirements around wages, social security, and taxation varying by state and industry. Without the right support, these complexities can delay hiring and increase risk. Partnering with Gloroots allows businesses to hire employees in India efficiently while ensuring full compliance with local regulations.

What are the main benefits of using Gloroots as an Employer of Record in India vs setting up your own entity?

Hiring in India can be a strategic advantage, but the path you choose—setting up a local legal entity or partnering with an Employer of Record (EOR)—has major implications for cost, speed, and compliance.

Setting up your own entity in India involves registering with multiple government authorities, obtaining licenses, managing ongoing compliance across central and state labor laws, and handling payroll and tax filings. This process can take months and requires significant upfront investment in legal, accounting, and HR expertise.

In contrast, working with an EOR like Gloroots allows you to hire talent in India immediately, without the delays and expenses of entity setup. Gloroots takes on the responsibility of payroll, taxes, employee benefits, and compliance, while you retain full control of day-to-day work and team performance. This makes EOR a faster, lower-risk entry strategy for companies looking to scale in India.

What is the Comparison for Direct Entity Setup vs. Employer of Record in India?

By choosing Gloroots as your EOR in India, you can enter the market faster, reduce compliance risks, and access top-tier talent without unnecessary complexity.

What is the work culture and talent pool like in India?

India’s workforce is known globally for its technical expertise, adaptability, and entrepreneurial spirit. For white-collar roles, the country offers a highly educated, English-speaking talent pool with deep specialization across technology, finance, healthcare, engineering, and creative industries. Indian professionals are widely recognized for their problem-solving skills, customer-centric approach, and ability to work effectively in global teams.

Talent Pool Highlights

• Technology & IT: India is home to over 5 million IT professionals, making it the world’s largest hub for software development, IT services, and digital transformation.
• Finance & Consulting: Mumbai and Gurugram lead as financial centers, hosting global banks, investment firms, and consulting giants.
• Healthcare & Life Sciences: India produces thousands of doctors, researchers, and biotech specialists annually, fueling innovation in health and pharmaceuticals.
• Creative & Design: Cities like Bengaluru, Hyderabad, and Pune are emerging as centers for design, animation, and digital media talent.
• STEM Graduates: Nearly 1.5 million engineers graduate annually, along with strong pipelines in data science, AI, and cloud computing.

Work Culture Insights

India’s professional culture is a blend of global business practices and local traditions. Employees often place high value on continuous learning, career progression, and stability. Team-oriented collaboration is common, though professionals are increasingly seeking workplaces that offer flexibility, inclusivity, and opportunities to innovate.

For global employers, English fluency in business communication minimizes barriers, while cultural adaptability ensures Indian professionals integrate seamlessly into international teams. Hybrid and remote work models are also widely embraced, making India a strong market for distributed global teams.

By working with Gloroots as your Employer of Record in India, you can tap into this diverse, high-performing workforce while ensuring compliant hiring and seamless onboarding.

What is the process of setting up an entity in India?

Establishing a legal entity in India is a multi-step process that requires navigating both national regulations and state-level compliance. Depending on your business model, you can register as a Private Limited Company, Limited Liability Partnership (LLP), or Branch Office. Each comes with its own regulatory and tax implications.

The general process includes:

1. Entity Type Selection – Decide whether to establish a subsidiary, LLP, or branch office based on your business goals.
2. Name Approval & Registration – Secure company name approval through the Ministry of Corporate Affairs (MCA).
3. Director Identification & Digital Signatures – Obtain Director Identification Numbers (DIN) and Digital Signature Certificates (DSC) for authorized signatories.
4. Incorporation Filing – Submit incorporation forms and the Memorandum & Articles of Association with the Registrar of Companies.
5. PAN & TAN Registration – Acquire a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for tax purposes.
6. GST & Other Tax Registrations – Register under Goods and Services Tax (GST) and, depending on your sector, comply with state-specific professional tax and labor laws.
7. Bank Account Setup – Open a corporate bank account to enable operations.
8. Compliance & Ongoing Filings – Adhere to periodic filings with the MCA, labor law registrations (EPF, ESIC), and tax filings.

While India offers vast opportunities, the entity setup process can take 10–12 weeks and requires extensive documentation. For companies eager to hire quickly and avoid delays, working with an Employer of Record (EOR) like Gloroots allows immediate access to India’s workforce without entity incorporation.

Q: What are the key employment laws in India that employers should know?

India’s employment laws are guided by a new framework of four consolidated labor codes:

• Code on Wages, 2019
• Code on Social Security, 2020
• Occupational Safety, Health and Working Conditions Code, 2020
• Industrial Relations Code, 2020

These codes are designed to simplify India’s historically complex labor law system. However, with many provisions delegated to state governments, compliance remains intricate and often confusing for foreign employers.

Partnering with an Indian EOR like Gloroots ensures you can compliantly hire employees without being overwhelmed by India’s legal landscape. Gloroots manages contracts, payroll, and benefits, while you focus on building high-performing teams.

Employment Contracts

In India, written employment contracts are not mandatory in all states, but they are highly recommended to avoid disputes and ensure compliance with statutory obligations.

• Salaries must be explicitly stated in Indian Rupees (INR).
• Fixed-term contracts are permitted for short-term needs but cannot be abused through continuous renewals.
• Unless otherwise specified, contracts are presumed to be permanent employment agreements.

A compliant contract should cover:

• Names of employer and employee
• Job role and responsibilities
• Compensation and benefits
• Non-compete and non-disclosure clauses
• Working hours and leave entitlements
• Notice period
• Termination provisions

While this may sound overwhelming, Gloroots simplifies the process by drafting locally compliant employment agreements for you.

Working Hours

• Standard: 48 hours per week (8 hours per day, 6 days a week).
• IT and knowledge sector companies may adopt a 5-day work week.
• Any work beyond this threshold qualifies as overtime.

Overtime

• Overtime pay is generally set at 200% of the regular hourly wage.
• Exemptions apply for certain managerial and supervisory roles.
• Employers must track hours carefully to remain compliant with state Shops and Establishments Acts.

Annual Leave

• Employees are entitled to at least 15 days of paid annual leave.
• Factory workers (under the Factories Act) receive 19 paid days annually.
• Unused leave can often be carried forward, up to 30 days.
• India observes 3 mandatory national holidays (Republic Day, Independence Day, Gandhi Jayanti).
• Additionally, states mandate a minimum of 10 public holidays, often based on regional festivals.

Sick Leave

• Employees with at least 3 months of service are entitled to 15 days of paid sick leave annually.
• Sick pay is generally 70% of daily wages, subject to a valid medical certificate submitted within 48 hours.
• Private sector employers must directly bear sick leave costs; there is no state reimbursement.
• Factory workers may use their annual leave allocation for sickness, as separate provisions do not always apply.
• Long-term or extended medical leave is not mandated by law and is subject to employer discretion.

By handling all aspects of compliance with India’s evolving labor codes, Gloroots as your EOR makes global hiring simple, compliant, and risk-free.

India’s dynamic workforce includes a large base of both employees and independent contractors. While contractors provide flexibility, misclassifying an employee as a contractor can create serious legal, financial, and reputational risks for employers.

What are the risks of misclassification in India?

India’s workforce includes both full-time employees and a growing base of freelancers, consultants, and contractors. While flexible engagement models are attractive for companies scaling quickly, the line between an employee and an independent contractor can be blurred. Misclassifying workers in India carries significant compliance and financial risks.

If a contractor is deemed to be functioning as an employee—based on control, working hours, exclusivity, or integration into company operations—the organization may face backdated liabilities. This includes social security contributions (Provident Fund, Employee State Insurance), gratuity, tax withholdings, and employee benefits that should have been provided. In addition, companies can face fines, penalties, reputational damage, and even litigation for wrongful classification.

With Gloroots, businesses mitigate these risks. Our EOR services ensure your workforce is classified correctly, all statutory contributions are managed, and your operations stay compliant with Indian labor law.

Criteria for Misclassification in India

• Control and Supervision: Contractors taking day-to-day instructions like employees.
• Work Integration: Contractors performing core business functions.
• Exclusivity: Contractors restricted from working with other clients.
• Payment Terms: Contractors paid monthly salaries instead of project-based fees.
• Provision of Benefits: Contractors given paid leave, insurance, or bonuses like employees.

Penalties of Misclassification in India

• Payment of backdated employee benefits (Provident Fund, gratuity, bonuses).
• Liability for missed tax withholdings and penalties from the Income Tax Department.
• Fines and interest for delayed Provident Fund/ESI contributions.
• Litigation costs and exposure to wrongful termination claims.
• Reputational damage, particularly for foreign companies entering India.

Direct Entity vs. EOR: Misclassification Risk in India

How does an EOR help you run payroll in India?

Running payroll in India is complex. Employers must comply with central and state-level laws that govern income tax withholding (TDS), social security contributions, and statutory employee benefits. Key obligations include:

• Income Tax (TDS): Employers must withhold tax from salaries based on individual tax slabs.
• Provident Fund (PF): Both employer and employee contribute toward long-term retirement savings.
• Employee State Insurance (ESI): Provides healthcare and insurance benefits for employees below a certain salary threshold.
• Gratuity: Payable by employers to employees with 5+ years of service.
• Professional Tax: Levied by certain states.

Managing these contributions requires accurate calculations, timely deposits, and statutory filings. Non-compliance can trigger penalties, interest, and reputational risk.

What are the Key Payroll Contributions in India?

For global companies without a local entity, these challenges are magnified. Setting up a legal entity requires months of registration and licensing, along with a local HR and finance function to stay on top of compliance.

An Employer of Record (EOR) like Gloroots simplifies payroll in India by acting as the legal employer on your behalf. Gloroots ensures:

• Accurate Payroll Processing – Salaries are calculated in INR, with correct tax deductions and social contributions.
• Regulatory Compliance – Adherence to Indian tax, social security, and labor laws.
• Automated Filings – Monthly PF/ESI deposits, quarterly TDS returns, and annual filings are managed without burdening your team.
• Benefits Administration – Statutory and supplementary employee benefits are seamlessly integrated into payroll.
• Multi-country Management – Consolidated reporting for businesses scaling across geographies.

This ensures employees are paid correctly and on time, while your company avoids penalties and administrative overhead.

Direct Entity vs. EOR: Payroll Management in India

By partnering with Gloroots, companies eliminate the complexity of Indian payroll, ensure compliance, and free internal teams to focus on growth rather than administration.

How does tax compliance work in India?

Tax compliance in India is multi-layered, involving both income tax deductions at source (TDS) and mandatory employer contributions to social security schemes. Employers must ensure accurate payroll deductions, timely deposits, and filings with the Income Tax Department, Employees’ Provident Fund Organisation (EPFO), and Employee State Insurance Corporation (ESIC).

For foreign companies, the complexity increases: different state-level levies (like professional tax), evolving labor codes, and dual income tax regimes (old vs. new) must be accounted for. Errors in compliance can lead to heavy penalties, backdated liabilities, and reputational risks.

With Gloroots, businesses get a trusted partner to manage end-to-end tax compliance. As your Employer of Record (EOR), we ensure correct deductions, filings, and deposits — freeing you from administrative burden while keeping your workforce compliant.

Income Tax Slabs in India (FY 2025–26)

New Regime (default option)

• Income up to ₹3,00,000 → Nil
• ₹3,00,001 – ₹7,00,000 → 5%
• ₹7,00,001 – ₹10,00,000 → 10%
• ₹10,00,001 – ₹12,00,000 → 15%
• ₹12,00,001 – ₹15,00,000 → 20%
• Above ₹15,00,000 → 30%

Old Regime (optional, with exemptions/deductions)

• Income up to ₹2,50,000 → Nil
• ₹2,50,001 – ₹5,00,000 → 5%
• ₹5,00,001 – ₹10,00,000 → 20%
• Above ₹10,00,000 → 30%

What are the Employer & Employee Contributions in India?

Compare Direct Entity vs. EOR: Tax Compliance in India

What benefits and entitlements do employees in India receive?

Employees in India are entitled to a mix of statutory benefits mandated by law and supplementary benefits that employers often provide to remain competitive in the talent market. Statutory benefits ensure baseline protections such as retirement savings, healthcare, and paid leave, while additional perks like private health insurance, flexible work options, and performance bonuses help employers attract and retain top talent.

For global companies, understanding the nuances of Indian benefits law is critical. Missteps can result in non-compliance with the Employees’ Provident Funds and Miscellaneous Provisions Act, the Employees’ State Insurance Act, or the Payment of Gratuity Act. Partnering with an EOR like Gloroots ensures that all mandatory entitlements are delivered while allowing you to design competitive benefits packages tailored to local expectations.

Statutory Benefits in India

• Provident Fund (PF): A retirement savings scheme funded by both employer and employee.
• Employee State Insurance (ESI): Health insurance coverage for employees earning up to ₹21,000/month.
• Gratuity: Lump sum payable to employees completing at least 5 years of service.
• Maternity Leave: 26 weeks of paid leave (for women working in organizations with 10+ employees).
• Paternity Leave: Not mandated by law but offered by many private employers.
• Paid Annual Leave: Typically 15–20 days per year, depending on state-specific Shops and Establishments Acts.
• Sick Leave: 12 days per year on average, subject to state law.
• Public Holidays: Around 10–14 days annually, varying by state.

Common Supplementary Benefits Offered by Employers

• Private Health Insurance (to complement or replace ESI).
• Life & Accident Insurance.
• Meal Vouchers or Food Allowances.
• Remote Work or Flexible Hours.
• Performance-Based Bonuses and ESOPs.
• Learning & Development Allowances.

Gloroots helps companies navigate this landscape by integrating both statutory and optional benefits into payroll, ensuring employees receive the full package compliantly.

Compare Direct Entity vs. EOR: Benefits Administration in India

How does equity consulting work in India?

Equity-based compensation — such as Employee Stock Option Plans (ESOPs), Restricted Stock Units (RSUs), and Phantom Shares — is a growing trend in India’s white-collar talent market. For global companies, offering equity aligns employees with long-term business success while improving retention.

However, the tax treatment of equity in India is complex. Different rules apply depending on whether the company is listed or unlisted, the stage of vesting/exercise, and whether the employee is resident or non-resident. In addition, cross-border equity grants may trigger double taxation risks or compliance issues with the Foreign Exchange Management Act (FEMA).

Gloroots provides equity consulting services to ensure companies can structure and administer equity plans that are:

• Legally compliant with Indian corporate, tax, and foreign exchange regulations.
• Optimized for taxation — minimizing employee tax burden where possible.
• Attractive to talent — ensuring employees understand the value of their equity.
• Integrated with payroll — so tax withholding and reporting obligations are fulfilled smoothly.

Taxation of Equity in India

• At Vesting (for RSUs): Taxed as perquisite under salary income.
• At Exercise (for ESOPs): Difference between fair market value (FMV) and exercise price is taxed as perquisite.
• At Sale: Capital gains tax applies depending on the holding period and whether shares are listed/unlisted.
• Startups: Certain recognized startups enjoy a tax deferral scheme for ESOP taxation, easing immediate tax burdens for employees.

Example: ESOP Taxation Journey in India

Scenario: An employee is granted 1,000 ESOPs with an exercise price of ₹100 per share. At the time of exercise, the fair market value (FMV) is ₹300. Later, the employee sells the shares at ₹500 each.

1. At Exercise
   • FMV (₹300) – Exercise Price (₹100) = ₹200 taxable per share
   • For 1,000 shares = ₹200,000 taxed as perquisite (salary income)
   • Taxed as per the individual’s slab rate (up to 30%).
   • Employer must deduct TDS and deposit with tax authorities.
2. At Sale
   • Sale Price (₹500) – FMV at Exercise (₹300) = ₹200 capital gain per share
   • For 1,000 shares = ₹200,000 taxable as capital gains
   • Tax rate depends on holding period:
     • Listed shares: 10% (long-term) or 15% (short-term).
     • Unlisted shares: 20% with indexation (long-term).

Total Taxation: Employee is taxed once under salary income at exercise, and again under capital gains at sale.

Direct Entity vs. EOR: Offering Equity in India

Partner with Gloroots to deliver equity plans that are compliant, tax-smart, and attractive to Indian talent.

What’s involved in hiring and onboarding employees in India?

Hiring in India involves more than signing an offer letter. The country has a regulatory-heavy employment framework with strict documentation and onboarding requirements. Employers must ensure that contracts are compliant with labor laws, verify employee eligibility, register new hires with statutory authorities, and integrate benefits administration from day one.

For global companies, the process can be challenging:

• Employment Contracts: Must include job description, compensation, benefits, working hours, leave entitlements, and termination conditions.
• Identity Verification: PAN (tax ID), Aadhaar, and bank account details are required for payroll.
• Statutory Registrations: Employees must be enrolled in Provident Fund (PF) and Employee State Insurance (ESI) schemes, where applicable.
• Tax Setup: Employers must register employees for TDS and issue Form 16 for annual tax filings.
• Onboarding Process: Includes induction, IT device provisioning, benefits enrollment, and compliance training.

Failure to comply with these requirements can delay employee start dates and expose companies to labor law penalties.

Gloroots simplifies this process by acting as your Employer of Record (EOR). We prepare compliant contracts, manage statutory registrations, handle payroll setup, and ensure new hires are onboarded within days — without requiring your company to establish a local entity.

Compare Direct Entity vs. EOR: Hiring & Onboarding in India

How do you successfully manage a workforce in India?

Managing a workforce in India requires balancing cultural nuances, compliance obligations, and employee expectations. While India offers one of the world’s most skilled and diverse talent pools, companies must adapt their management style to local work culture to ensure productivity and retention.

Work Culture and Management Styles

• Hierarchy with Flexibility: Traditionally, Indian workplaces value hierarchy and respect for seniority. However, in globalized industries like tech, finance, and consulting, flatter and collaborative structures are becoming the norm.
• Relationship-Oriented: Trust and interpersonal connections play a major role in effective management. Employees value regular feedback and mentorship.
• Work-Life Balance: Younger professionals increasingly prioritize flexible working models and holistic well-being alongside career growth.

Communication and Collaboration

• High English Proficiency: India has one of the largest English-speaking professional populations, making it easy for multinational teams to collaborate.
• Direct vs. Indirect Communication: While business communication is often direct in urban hubs like Bengaluru or Mumbai, employees may use a more indirect, consensus-driven style when discussing sensitive issues.
• Technology-Enabled: With strong IT adoption, remote and hybrid collaboration tools are widely used.

Workforce Management Challenges

• Retention Pressure: High attrition rates in IT and startup ecosystems mean companies must offer strong benefits, career development, and engagement strategies.
• Compliance Complexity: India’s labor laws differ by state, requiring careful monitoring of leave, working hours, and statutory benefits.
• Multi-Generational Workforce: Managers must adapt to teams that include both Gen Z professionals seeking flexibility and senior employees preferring traditional structures.

How Gloroots Helps

Gloroots enables global companies to manage Indian teams smoothly by:

• Acting as the legal employer, ensuring full compliance with labor and tax laws.
• Integrating global benefits packages with local statutory entitlements.
• Providing tools for payroll, contracts, and HR administration in one platform.
• Offering insights into local talent expectations, helping employers build engagement strategies.

Direct Entity vs. EOR: Workforce Management in India

What are the key steps and requirements in terminating employees in India?

Employee termination in India must be handled with precision, as employment laws are employee-protective and vary by state, industry, and the employee’s role. A poorly managed termination can expose employers to wrongful dismissal claims, financial liabilities, or compliance penalties.

Termination Process

• Valid Grounds: Termination can occur due to misconduct, redundancy, poor performance, or mutual agreement. Dismissals without valid cause may be legally challenged.
• Documentation: Employers must issue a formal termination letter specifying reasons and effective dates.
• Statutory Payments: Employers must ensure final settlements, including unpaid wages, leave encashment, gratuity (if applicable), and bonus.

Notice Period

• Standard Duration: Most employees are entitled to 30 to 90 days’ notice, depending on contract terms and seniority.
• Buyout Option: Notice may be substituted with payment in lieu, if contractually allowed.

Severance Pay

• Mandatory in Redundancy/Layoff Cases: Industrial Disputes Act requires 15 days’ average pay per year of service for certain categories of employees.
• Contractual Severance: White-collar workers often receive enhanced severance benefits per contract.

Probation Period

• Typically ranges from 3 to 6 months, extendable to 12 months.
• Termination during probation requires shorter notice (often 7–30 days), as defined in the employment contract.

Compare Direct Entity vs. EOR: Termination in India

Ensure compliant employee exits in India with Gloroots managing the entire process.

Q. What is the offboarding process in India?

Narrative Overview

In India, the offboarding process is guided by the Industrial Disputes Act, Shops and Establishments Acts (state-specific), and company employment contracts. It is not just an administrative exercise but also a compliance-heavy process involving statutory dues, documentation, and regulatory filings. Employers must carefully manage notice periods, final settlement, provident fund (PF) withdrawal, gratuity, and relieving documentation.

Improperly executed offboarding can expose companies to disputes before labor authorities or even litigation. With an EOR like Gloroots, businesses can navigate India’s complex labor ecosystem seamlessly—ensuring employees exit with dignity, statutory benefits are correctly settled, and compliance risks are eliminated.

Key Phases of the Offboarding Process in India

• Notice of Resignation / Termination
  Employees are usually required to serve a notice period—commonly 30–90 days depending on role and contract terms. Terminations must comply with due process, including valid grounds and, in some cases, government approval for larger establishments.
• Handover & Clearance Process
  Employees must return company property (laptops, ID cards, access cards) and complete project or knowledge transfer. Employers typically issue a clearance form that requires sign-offs from multiple departments (HR, IT, Finance, Admin).
• Final Settlement of Dues (F&F)
  Employers must pay outstanding wages, leave encashments, bonus, gratuity (if applicable), and reimbursements. Statutory contributions like Provident Fund (PF), Employee State Insurance (ESI), and professional tax must also be reconciled. The final settlement is usually completed within 30–45 days of exit.
• Provident Fund & Gratuity
  Employees can withdraw PF balances or transfer them to a new employer. Gratuity is payable if the employee has completed at least 5 years of continuous service.
• Relieving Letter & Experience Certificate
  A Relieving Letter and Experience Certificate serve as proof of employment and are crucial for the employee’s future opportunities. Indian law recognizes an employee’s right to receive these, though timelines are not strictly defined.
• Exit Interview & Knowledge Retention
  While not legally required, many organizations conduct exit interviews to capture feedback and ensure smooth knowledge transfer.

Offboarding: Direct Entity vs Gloroots EOR (India)

Why This Matters

Offboarding in India is compliance-driven and multi-layered. Missteps can result in labor disputes, penalties, or reputational risks. At the same time, how an employee leaves has a lasting impact on employer branding. A fair, transparent, and timely exit process reflects positively on the organization.

With Gloroots, you can offboard employees in India smoothly—ensuring compliance, timely settlements, and a professional employee experience without burdening your HR or legal teams.

What costs and financial planning do you need with an Employer of Record in India?

Expanding into India requires careful cost planning. Beyond salaries, employers must account for statutory contributions, benefits, payroll taxes, and administrative overhead. Setting up a legal entity increases costs significantly due to incorporation fees, compliance management, and in-country HR/legal teams.

Working with an Employer of Record (EOR) like Gloroots offers a cost-efficient alternative. Instead of establishing a subsidiary, you can onboard employees through Gloroots, who acts as the legal employer. This eliminates incorporation expenses, reduces compliance overhead, and provides predictable monthly fees.

Key Cost Components Employers Face in India

• Gross Salary Packages: Base salary plus allowances.
• Employer Contributions: Provident Fund (12%), ESI (3.25% where applicable), gratuity (~4.81%).
• Benefits: Health insurance, leave encashment, performance bonuses, or ESOPs.
• Payroll & HR Overheads: Software, compliance teams, tax consultants.
• Entity Costs (if direct setup): Incorporation, ongoing legal filings, labor law compliance audits.

With Gloroots, costs are transparent and predictable — bundled into a single fee that covers payroll, compliance, and statutory obligations, allowing finance leaders to forecast with confidence.

Direct Entity vs. EOR: Cost Planning in India

Understand EOR fees in detail and plan your India expansion with confidence.

What challenges might you face, and how do you solve them using an EOR in India?

India offers one of the world’s largest pools of skilled professionals, but entering the market comes with operational, legal, and cultural challenges. From navigating complex labor laws to building compliant HR infrastructure, many companies underestimate the resources needed to scale successfully.

Key Challenges for Employers in India

1. Entity Setup Delays
   Incorporating a subsidiary can take months, with multiple registrations (corporate, tax, labor, PF/ESI). This slows down hiring.
2. Compliance Complexity
   India’s employment laws vary across states. Managing statutory contributions, leave policies, and labor codes requires constant monitoring.
3. Payroll Administration
   Employers must calculate salaries, apply correct tax withholding, and ensure timely deposits for PF, ESI, and TDS. Errors lead to fines and employee dissatisfaction.
4. Employee Retention
   With high attrition in sectors like IT and startups, offering competitive benefits and equity is critical. Missteps in benefits administration can hurt retention.
5. Cross-Border Hiring
   Foreign companies often face barriers in issuing compliant contracts, ensuring tax compliance, and offering equity to Indian employees.

How Gloroots EOR Solves These Challenges

Gloroots acts as your Employer of Record in India, handling all compliance and HR administration while you focus on building teams:

• Faster Market Entry: Onboard employees within days instead of months.
• Guaranteed Compliance: All statutory contributions, benefits, and taxes are managed correctly.
• Streamlined Payroll: Salaries are processed in INR with accurate deductions and filings.
• Enhanced Retention: Competitive benefits and equity plans administered seamlessly.
• Scalable Operations: Expand across India without worrying about multi-state compliance.

Direct Entity vs. EOR: Challenges & Solutions in India

Expand into India with Gloroots — overcome compliance hurdles and focus on growth.

Conclusion

India represents one of the most dynamic and opportunity-rich talent markets in the world. With its deep pool of highly skilled professionals across technology, finance, healthcare, and emerging industries, the country offers global businesses the ability to scale quickly and cost-effectively. However, navigating India’s complex employment laws, tax structures, and compliance landscape can be a significant barrier to entry.

For companies expanding into India, the choice is clear: spend months setting up an entity, managing statutory filings, and handling compliance risks in-house — or partner with a trusted Employer of Record (EOR) like Gloroots.

With Gloroots, you gain:

• Speed to hire: Onboard employees in India within days.
• Compliance assurance: All contracts, payroll, taxes, and benefits fully managed.
• Employee experience: Competitive benefits and seamless onboarding that attract and retain top talent.
• Scalable operations: Expand across regions in India without administrative overhead.

Gloroots makes global hiring in India simple, compliant, and cost-efficient — allowing your leadership team to focus on building high-performing teams instead of managing regulatory complexity.

Hire employees in India with Gloroots — your fastest, most compliant path to success in India.

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