April 3, 2025
Increasing numbers of businesses recognize the advantages of hiring employees in India to address workforce needs, manage specialized projects, and scale operations seamlessly. India's vast talent pool offers companies access to top-tier candidates for temporary and long-term employment opportunities.
Successfully navigating India’s employment landscape starts with understanding the difference between full-time employees and other worker categories. Recent labor law updates have enhanced employee protections, introducing more substantial labor rights, improved social security, and stricter compliance standards for employers.
If you need some direction on how to hire employees in India, our guide is your roadmap to successfully hiring employees in India. We’ll break down key considerations, tackle common challenges, explore costs, and reveal how innovative solutions like Skuad’s Employer of Record (EOR) services can streamline the entire process.
In the table below, we’ve outlined the key differences between managing international employment independently and partnering with an EOR like Skuad.
| Concern | Hiring Directly | Skuad EOR |
| Risk of Non-Compliance | Requires setting up a local legal team to ensure compliance with India’s labor laws and regulations. | Skuad’s experts handle compliance with local laws, mitigating contracts, taxes, and employee classification risks. |
| Tax and Compliance | Understanding and managing complex tax and employment laws can be time-consuming and prone to errors. | Skuad manages payroll, taxes, invoicing, and other administrative tasks on your behalf. |
| Currency Management | Handling multi-currency payments requires hiring specialists and incurs high processing fees. | Skuad simplifies payments with multi-currency accounts and streamlined payroll in over 100 currencies. |
Hiring Employees Through Skuad EOR
Skuad’s EOR platform makes onboarding employees effortless, empowering companies to build global teams without the usual headaches. With unmatched global reach and comprehensive support, we’re your all-in-one solution for managing international talent.
| # Countries Supported | # Currencies Supported | # Languages Supported |
| 160+ | 100+ | 20+ |
| IP Protection | Record-Keeping Services | Employee Management |
| Yes | Yes | Yes |
When Skuad does the heavy lifting, you can seamlessly onboard top talent while avoiding compliance risks and administrative burdens. Whether managing payroll across multiple currencies or staying aligned with local regulations, Skuad’s EOR platform lets you hire confidently and efficiently.
One platform to grow your global team
Hire and pay talent globally, the hassle-free way with Skuad.
Talk to an expertHow To Pay Employees in India
Paying employees in India requires navigating local labor laws and tax regulations and implementing efficient payroll systems to ensure timely, accurate, and compliant payments. Relying on traditional methods such as direct deposits, checks, or international payment platforms can become increasingly time-consuming, further increasing your chance of committing errors as your workforce grows.
Delayed payments or miscommunications can damage employer-employee relationships and negatively impact morale.
That’s where Skuad’s EOR platform comes in—transforming how you handle employee payroll in India. Here’s how Skuad makes paying your employees seamless and stress-free:
| Name | Description |
| Multi-Currency Payroll | Managing payroll in Indian Rupees (INR) from abroad can lead to expensive currency conversion fees. Skuad eliminates this hassle with multi-currency accounts, ensuring your employees are paid accurately without cutting into your bottom line. |
| Automated Payroll Processing | Say goodbye to manual calculations. Skuad’s platform automates salary disbursements, tax deductions, and benefits management, saving you time and ensuring compliance with Indian labor laws. |
| Compliance Made Simple | With ever-changing labor laws in India, compliance can be tricky. Skuad’s legal experts ensure payroll processes adhere to regulations so you can avoid penalties while providing employees with the benefits they deserve. |
| Expense and Reimbursement Management | Skuad simplifies expense approvals and reimbursements, integrating these processes into a single, easy-to-use platform. |
| Timely, Bulk Payments | Whether you manage a small team or a significant workforce, Skuad’s bulk payment feature ensures your employees are paid on time, to foster trust and satisfaction. |
These innovative solutions empower business owners to pay their employees and confidently scale their workforces with ease. Skuad’s platform offers advanced tools for seamless and efficient employee management, setting a new standard for global payroll services. Click the link below to learn more.
Costs of Hiring Employees in India
Hiring employees in India can unlock incredible opportunities, but it’s essential to understand the costs involved. Navigating these expenses, from payroll processing to legal compliance, can be complex.
That’s where a brilliant comparison between direct hiring and partnering with an EOR like Skuad can make all the difference:
| Cost Factor | Direct | Skuad EOR |
| Payroll Processing | Requires investment in local payroll systems or services. | Included in Skuad’s service with fully automated payroll for accuracy. |
| Currency Conversion | High fees with traditional banks or services. | Minimal to no fees with Skuad’s multi-currency payroll system. |
| Legal Compliance Costs | Requires in-house legal teams or outsourced experts. | Handled entirely by Skuad, ensuring compliance with Indian labor laws. |
| Employee Benefits | Requires calculating and disbursing benefits like Provident Fund and Gratuity. | Managed by Skuad, seamlessly covering all statutory benefits. |
| Foreign Transaction Fees | Typically incurred for international payments. | None with Skuad’s streamlined payment system. |
Challenges of Hiring Employees in India
Employers face three main challenges associated with hiring employees in India.
1. Navigating Complex Labor Laws India’s labor laws can be complex, with federal and state-specific rules covering wages, benefits, working hours, etc. Employers must navigate these regulations carefully to ensure compliance with key laws, such as:
- The Industrial Disputes Act
Governs termination and disputes. - The Employees’ Provident Fund Act
Mandates retirement fund contributions. - The Payment of Gratuity Act
Requires gratuity payments for eligible employees.
Non-compliance can lead to legal penalties and employee dissatisfaction.
It’s also a good idea to study the
distinction between employees and contractors to avoid common misclassification errors.
2. Managing Payroll and Taxes Managing payroll in India involves navigating multiple tax obligations and statutory deductions, such as:
- Tax Deducted at Source (TDS)
Employers must calculate and deduct applicable taxes before disbursing salaries. - Professional Tax (PT)
A state-specific tax levied on professionals. - Provident Fund (PF) and Employee State Insurance (ESI)
Contributions to employee welfare programs. Errors or delays in payroll management can lead to compliance issues, employee dissatisfaction, and penalties.
3. Currency Exchange and Payment Processing For international businesses, paying employees in INR can feel like navigating a maze of currency exchange rates and payment systems. Without the right tools, it’s easy to run into unexpected costs, salary payment delays, and inefficient processes. Here’s a closer look at the key challenges businesses face and what to consider to get it right:
- Exchange Rate Volatility
- Currency Conversion Fees
- Payment Processing Delays
- Multi-Currency Payment Management
- Compliance with Indian Banking Regulations
By addressing these challenges proactively, businesses can streamline their payroll processes in India, ensuring cost efficiency and employee satisfaction.
Understanding and ensuring adherence to tax regulations can be challenging for employers. This is why so many businesses deploy employee management software to handle the international employee payroll process.
Read more here
Converting Contractors into Employees in India
India’s employment laws provide a clear and manageable framework for converting contractors into full-time employees. For a step-by-step process and key considerations, explore our comprehensive guide on hiring contractors in India for more information.
Hire Employees in India with Skuad
Companies that hire employees in India face challenges like navigating labor laws, onboarding, and managing payroll. That’s why businesses turn to Skuad’s EOR solution.
Skuad simplifies how to hire employees in India by handling compliance, payroll, and HR tasks while providing seamless onboarding and payment tools. Our legal experts ensure your hiring process aligns with Indian regulations, letting you focus on growing your business.
Contact us today to see how Skuad makes hiring employees in India effortless.
One platform to grow your global team
Hire and pay talent globally, the hassle-free way with Skuad.
Talk to an expertFAQs
How do you hire an employee in India?
You can either establish a local entity, which is time-intensive and requires compliance expertise, or partner with an EOR like Skuad. An EOR simplifies the process by managing compliance, payroll, and employee benefits.
How do you pay an employee in India?
Partnering with an EOR like Skuad ensures seamless payroll management, offering multi-currency payments, automated salary processing, and compliance with Indian tax regulations.
Can a foreign company hire employees in India?
Yes, foreign companies can hire employees in India by working with an EOR like Skuad. This eliminates the need to set up a local entity while ensuring compliance with labor laws.
How does Skuad help with hiring employees in India?
Skuad’s EOR platform simplifies hiring by managing payroll, taxes, compliance, employee benefits, and onboarding, ensuring a hassle-free experience for businesses expanding into India.
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