India PEO Employment Services

Velocity Global’s India PEO (Professional Employer Organization) solution helps your business simplify its expansion into India with foreign employment law expertise and expedited international employee onboarding—without the need for entity establishment. Our streamlined global expansion method accelerates your time-to-market by 90% when compared to entity setup.

With International PEO, Velocity Global acts as your Employer of Record. This means that we utilize our international infrastructure to compliantly hire and onboard international employees on your behalf—while you maintain full oversight of your global team. Our experts handle all payroll, compliance, and risk mitigation to ensure a quick, simplified global expansion experience.

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India Fast Facts

Currency: Indian Rupee (INR)
Capital: New Delhi
Population: 1.3 billion—second-largest country by population
Economy: Fifth-largest at $2.29 trillion (nominal GDP), fastest-growing trillion-dollar economy
Top Sectors: Agricultural, industrial, services, food processing, and manufacturing
Holidays:

  • Republic Day: January 26, 2020
  • Good Friday: April 10, 2020
  • Ambedkar Jayanti: April 14, 2020
  • Eid ul-Fitr: May 24, 2020
  • Eid al-Adha: July 31, 2020
  • Indian Independence Day: August 15, 2020
  • Gandhi Jayanti: October 2, 2020
  • Dussehra: Likely October 25, 2020
  • Mawlid: October 28-29, 2020

*Some Indian states have additional holidays

Hiring Considerations in India

Expanding into any foreign market requires research and due diligence to understand the country’s unique traits. India is no different. With over one billion people, rich cultural traditions across states, and an emerging middle class, India offers tech firms an expansive market for growth.

Benefits of hiring in India:

  • Expanding into India with International PEO puts businesses in one of the world’s fastest-growing countries, in terms of both population and GDP (7.5% in 2019). In fact, India’s GDP will reach between $8.4 and $10 trillion by 2030.
  • India’s diverse business sectors offer companies from all industries a chance to increase their global market share. Tech firms, especially, find India’s booming technology industry one of the world’s most-promising talent pools for tech skills.
  • With over 560 million internet users, India is the world’s second-largest online marketplace, outpaced only by China. By 2021, India’s connectivity will reach over 600 million, with rural areas driving much of the connectivity increase.
  • India is home to the second-largest English-speaking population in the world after only the United States. One hundred twenty-five million Indians speak English, with 88% residing in urban areas with diverse economic opportunities.

Challenges when expanding into India:

  • India’s 29 states each have different laws. When a business expands into the country, they must understand that laws surrounding their products or services can vary from state to state. No matter a business’ sector, they must explore how laws vary between states before moving into or marketing in an Indian State. Companies must also consider central, state, and local taxes and how they apply. Relying on International PEO helps firms navigate these often-complex laws and ensures compliance.
  • India’s infrastructure may present hurdles with customs, logistics, and tracking. Businesses considering expanding into one of India’s more rural areas must consider how the region’s less-developed infrastructure impacts their mobility, exports, and overall operations.
  • Much like legal differences, companies must anticipate and navigate cultural and geographic differences between states. India is the world’s seventh-largest country by land area, with starkly different geographies home to numerous ethnic groups, castes, religions, and sects. Companies must consider that what works in one state may not in another.

Cultural nuances and must-knows for doing business in India:

  • Shake hands during introductions, but expect some Indians to introduce themselves with the Namaste or pressing palms together and a slight bow.
  • Greet the most senior member during a meeting, and accept a business card with the right hand.
  • Use formal titles (i.e., Dr. or professor) during conversation, and address women as Madam and men as Sir. Use Ji when speaking to seniors both in age and position.
  • Engage in small talk and speak about families. Small talk is common and acceptable after introductions. Many Indians speak English but understand that some English phrases may not translate correctly.
  • Plan meetings and travel well in advance, but be aware that the meeting time may remain in flux until day-of.
  • Refrain from forceful negotiation, and understand a deal may take more time than expected to wrap up. Many Indians base final decisions on trust and intuition in addition to data; positive working relationships are vital to solidifying decisions.

Employment Contracts in India:

Minimum wages and salaries:
The minimum wage in India is 176 ($2.33) rupees for every eight-hour workday. However, some states set lower minimum wages.

Probation periods:
There are no direct laws outlining probation periods in India. However, probation periods are allowed and common practice.

Bonuses:
Eligible employees in India may earn between a minimum of 8.33% and up to 20% of their annual salary within the accounting year. In 2015, amendments to India’s Payment of Bonus Act 1965 extended eligibility to include workers earning up to INR 21,000.

Termination/severance considerations:
All employers in India must give 30- to 90-day notice periods to employees whose primary roles are not supervisory, administrative, or managerial. Fifteen days’ pay is due to employees for each year worked. Certain sectors require government approval before termination; most only require government notification.

Paid Time Off & Benefits

Maternity leave:
Expectant mothers in India take 26 weeks’ paid time off for their first two children; mothers receive 12 weeks’ pay for three or more children. All mothers receive 100% of their income, based on earnings average six months before birth. Employers with headcounts exceeding 50 employees must provide daycare for their employees’ children.

Paternity leave:
There is no law in India mandating paternity leave for private sector businesses. However, Indian central government employees may take up to 15 days’ leave before, or up to six months after, their child’s birth.

Earned/privilege leave:
Employees in India earn a minimum of 15 days leave, accrued in the previous year, and only taken the following year. However, laws vary between states.

Vacation:
The number of paid time off and vacation days varies between states and organizations.

Casual leave:
Employees may take up to 10 days of casual leave. “Casual” leave gives employees the opportunities to not come into work without applying for leave in advance.

Sick leave:
State laws regarding sick leave vary, but most states offer around 10 days’ sick leave. It is uncommon for businesses to provide short-term sickness benefits.

Payroll

Tax dates:

  • Individual: July 31, 2020
  • Body of Individuals: July 31, 2020
  • Hindu Undivided Family: July 31, 2020
  • Association of Persons: July 31, 2020
  • Businesses (requiring an audit): September 30, 2020
  • Businesses (requiring TP report): September 30, 2020

Average workweek hours:

  • Employees may not work more than 48 hours per week. This is considered a “normal” working week in India.

Overtime considerations:

  • Most salaried workers do not receive overtime for staying late to complete work. Under India’s Minimum Wages Act, overtime wages are double the amount of ordinary wages. However, overtime rates vary between states.

Taxes

Resident companies are taxed on global income, while non-resident companies are taxed only on income generated in India.

Employer contributions include up to 12% for the Employees’ Provident Fund (pension fund), 4.75% to health insurance, 0.50% for EPF Administration Fee, and a fixed amount for Employee Deposit Linked Insurance.

Employee taxes:

  • INR 0 – 1,000: 0%
  • INR 250,001 – 500,000: 5%
  • INR 500,001 – 750,000: 10%
  • INR 750,001 – 1,000,000: 15%
  • INR 1,000,001 – 1,250,000: 20%
  • INR 1,250,001 – 1,500,000: 25%
  • Above INR 1,500,000: 30%

Goods & Services Tax (GST):

  • 0 – 18%

Choose Velocity Global

Expanding your business abroad is an exciting time, and working with an experienced expansion partner helps you capitalize on your overseas opportunities. With accelerated time-to-market, expert employment law guidance, and unrivaled global infrastructure, Velocity Global’s International PEO solution allows for an easy and compliant expansion into India. As your Employer of Record, we handle all risk mitigation, payroll, and compliance, so you can focus on running your business.

Whether you hire one employee in India to test the market, engage in a short-term project, or establish your presence in India with multiple hires, International PEO gives you the flexibility you need to build your team on your timeline—saving your business up to 60% when compared to traditional, restrictive entity establishment.

If you would like to learn more about Velocity Global’s seamless approach to global expansion, get in touch today.