PEO services India

Advertised prices, verified

How PEO services work in India

1. You select the hire and agree the package. You recruit the candidate and agree role, salary and start date. Indian offers are usually structured as an annual CTC (cost to company) figure, so agree explicitly what sits inside it: basic pay, allowances, employer provident fund contributions and any bonus.
2. The provider employs through its Indian entity. The provider issues an employment contract compliant with Indian law and the applicable state's shops and establishments rules, registers the employee for statutory schemes, and becomes the legal employer while you direct the work.
3. Monthly payroll runs with statutory deductions. Each cycle the provider pays salary in rupees, withholds income tax at source, makes provident fund and, where applicable, state insurance contributions, and files the statutory returns. You receive a single consolidated invoice in your currency.
4. Exits run through the provider. Notice, gratuity where service length triggers it, and full-and-final settlement are executed by the provider as legal employer. A clean exit process is one of the main things the fee pays for, so probe it before you sign rather than at the first departure.

Why PEO and EOR mean the same thing in India

In the United States a PEO co-employs workers who remain employed by your own entity, sharing employer responsibilities under a state-registered arrangement. Indian law has no such co-employment registration, and a foreign company with no Indian entity cannot lawfully run Indian payroll at all. So when a provider sells PEO services India to a company with no Indian presence, the mechanics are employer of record mechanics: the provider's Indian entity is the sole legal employer, and your relationship to the worker is contractual direction of their work.

The distinction matters when comparing prices. Vendors publish PEO and EOR price points separately in some markets, and US-style PEO pricing per employee does not translate to India. For an Indian hire, compare the per-employee monthly EOR fee across vendors; the table above shows verified prices from 7 vendors with a median of $499.

The statutory load the provider carries

India's employment cost stack sits on several statutes at once: employees' provident fund contributions from the employer and employee, employees' state insurance for staff within its wage ceiling, gratuity that accrues with length of service under the Payment of Gratuity Act, statutory bonus rules for eligible wage bands, and leave and working-time rules that vary by state under shops and establishments legislation. Rates, ceilings and eligibility thresholds change and differ by state and wage level, so a credible provider quotes the current figures for your specific hire in writing rather than a generic percentage.

Two structural points catch foreign buyers. First, the CTC convention means the number a candidate quotes usually already includes employer-side contributions, which is the opposite of most Western salary conventions; agree what the offer figure includes before it is made. Second, misclassifying an Indian worker as an independent contractor to avoid this stack carries real reclassification risk, and a worker engaged full time under your direction looks like an employee to an Indian tribunal regardless of the contract's label.

When to move from a provider to your own Indian entity

The provider's per-employee fee buys you out of entity setup, payroll registration and multi-statute compliance, which is a good trade at small headcount. As a team grows into the tens the monthly fees pass what a private limited company with local accounting support would cost, and an entity also becomes necessary where the work itself needs local licensing, invoicing or customer contracting that an employment-only provider cannot host.

A well-run transition terminates employment with the provider and rehires into your entity with continuity of key terms, and any gratuity accrual question settled explicitly at the switch. Ask a prospective provider to describe that exit path and its cost before you onboard the first hire; the answer tells you whether the provider expects to earn your renewal or lock you in.

Common questions

Is a PEO in India the same as an employer of record?

Functionally yes for a foreign buyer. Indian law has no US-style co-employment registration, so providers selling PEO services India employ your hires outright through their own Indian entity, which is the employer of record model.

What do PEO services in India cost?

Pricing follows the EOR convention: a flat fee per employee per month on top of salary and statutory costs. The priced vendors in this index show a median of $499; the table above links each figure to the vendor's own page.

Can I just pay an Indian worker as a contractor instead?

You can engage genuine independent contractors, but a full-time worker under your direction is likely to be an employee in substance, and reclassification exposes the buyer to back contributions and penalties. An employment route through a provider removes that risk.

What is CTC and why does it matter?

Cost to company is the Indian convention for quoting an annual package that includes employer-side statutory contributions and allowances, not just take-home salary. Agree what a CTC figure includes before making an offer, or the hire and the invoice will not match expectations.

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