An Indian PEO is, in almost every offer you will see, an employer of record for India: a provider that legally employs your Indian hires, runs payroll in rupees, administers Provident Fund and other statutory programmes, and bills you a monthly fee. The US meaning of PEO, a co-employment arrangement layered over your own registered employer, does not map onto Indian law, so the label needs unpacking before prices can be compared.
Why 'PEO' means something different in India
In the United States, a professional employer organization enters co-employment with a client that is already an employer, pooling payroll and benefits administration across many client companies. India has no equivalent co-employment construct for a foreign company with no Indian entity: someone must simply be the employer under Indian law. So vendors selling an Indian PEO are selling outsourced employment, the employer of record model, and the practical questions are the EOR questions: who is the registered employer, what contract the employee signs, and how statutory contributions are handled.
The statutory machinery your provider must run
The centrepiece is the Employees' Provident Fund. PwC's India summary describes employee contributions of 12% of salary with a matching employer contribution, of which 8.33% of salary is diverted to the pension scheme, capped at INR 15,000 per month of salary for Indian employees, with the balance to the provident fund. Around that sit gratuity accrual, state-level professional taxes and, for lower wage bands, employee state insurance. A credible provider shows these lines itemised in its quote rather than folded into a single fee, so you can see gross salary, statutory cost and margin separately.
Choosing an Indian provider on evidence
The useful filters are the ones that can be verified: whether the provider employs through its own Indian entity or a partner, how quickly it onboards in practice, what its published pricing includes, and whether contributions appear in the employee's EPF passbook on time. The vendors compared on this site are held to published, dated evidence for exactly this reason. As always, the employment contract and policy documents control, and nothing on this page is legal or tax advice.
Questions people ask about indian peo
Is an Indian PEO the same as an EOR?
Functionally yes for foreign companies: the provider is the legal Indian employer. The US co-employment sense of PEO does not exist in Indian law for employers with no entity.
What are the main statutory costs on Indian payroll?
Provident Fund at 12% employee and a matching employer contribution (8.33% of capped salary to the pension scheme, per PwC), plus gratuity accrual and state-level levies depending on wages and location.
Can employees move from the PEO to my own entity later?
Yes. Once you incorporate in India, employees can be transferred onto your entity's contracts, and EPF accounts carry over through the universal account number system.