A foreign company hired you. An Indian company will sign your contract. Here is what that means.
That Indian company is an Employer of Record, or EOR. This guide answers the questions candidates ask us most: is it legal, who pays me, whose name goes on my relieving letter, do I get PF and insurance, and what to ask before you sign.
What an Employer of Record is, in plain words
An Employer of Record (EOR) is an Indian company that legally employs you on behalf of a foreign company that has no office or legal entity in India. Think of it as two employers with two different jobs.
| The foreign company (your client) | The EOR (your legal employer) | |
|---|---|---|
| Decides to hire you | Yes | No |
| Sets your salary, raises, promotions | Yes | No |
| Gives you work and reviews | Yes | No |
| Signs your employment contract | No | Yes |
| Pays your salary in rupees | No, it pays the EOR | Yes |
| Deducts TDS, files PF and ESI | No | Yes |
| Payslip and Form 16 | No | Yes |
| Experience and relieving letter | No | Yes, naming the client |
| Health insurance | Usually pays for it | Usually arranges it |
Foreign companies use an EOR because setting up an Indian company takes months. An EOR lets them hire you in days, and do it legally.
EOR is not "third party payroll." Third party payroll usually means a staffing agency placed you at a big Indian company at a lower grade. EOR employment means a foreign company with no Indian office chose you directly, sets your pay, and uses the EOR only for legal employment. You are their India team, not a lower grade.
Is this a real job? Is it safe?
Yes, if the EOR is a real, registered Indian company. This takes five minutes to check. Ask the EOR for three things:
1. Legal name and CIN
Search it on mca.gov.in under "View Company Master Data." You should see an active company. Note the incorporation date.
2. PF establishment code
This proves the EOR is registered with the EPFO and can pay your PF. It also proves they treat you as an employee.
3. Own entity, or partner?
Some global platforms have no Indian company and use a local partner. Not illegal. But you should know whose name goes on your Form 16.
Employee or contractor? Tick what is true of your offer.
Red flags. No written offer before you resign from your current job. Salary in dollars with no TDS. No payslip in month one. "PF starts after probation." Any request that you pay a fee for onboarding, background checks or equipment. Pressure to sign in 24 hours.
What if the client stops paying the EOR? Your salary is still the EOR's legal duty. Under the Code on Wages, the EOR must pay wages by the 7th of the next month. If it does not, you can file a claim with the labour commissioner in your state. It is free and you do not need a lawyer. Ask the EOR whether it bills the client before payroll. Before is safer for you.
Whose name is on what
| Document | Who issues it | What to check |
|---|---|---|
| Offer letter and employment agreement | The EOR | It names the client company and your role. If not, ask for it to be added. |
| Payslip, every month | The EOR | Basic matches the offer. PF is 12% of basic. TDS matches your declaration. |
| Form 16, by 15 June | The EOR | You file your return by 31 July. |
| Experience letter | The EOR | Names the client, your role, your dates. |
| Relieving letter | The EOR | Issued on your last day, after handover. |
| Reference letter | Your client manager | On the client's letterhead, or a LinkedIn recommendation. |
Background verification at your next job. Your Form 16 and PF record show the EOR's name. So tell your next employer both names upfront. In the BGV form, put the EOR as employer and the client under "deployed at." Give the EOR HR's email as the contact. BGV agencies see this every day. When the names match your documents, it clears.
On your CV, write it as: Senior Developer, Acme Inc. (employed via Saileor). Recruiters understand this. It is how most people who work for US, UK or Gulf companies from India show it.
How your salary works
Paid in rupees
By the EOR, into your Indian bank account. Being paid in dollars from abroad with no TDS makes you a contractor, and you lose PF, gratuity and leave.
Latest legal pay date
Under the Code on Wages, salary must land by the 7th of the next month. Most EORs pay on the last working day or the 1st.
Ask for a fixed rupee CTC
If the offer was in dollars or euros, ask whether the rupee amount is fixed for the year or moves with the exchange rate. Fixed is better. Your rent does not move with the dollar.
A sample breakup: ₹12,00,000 CTC
| Component | Monthly | Note |
|---|---|---|
| Basic | ₹40,000 | Under the labour codes, basic plus DA must be at least 50% of "wages" |
| HRA | ₹20,000 | Partly tax-free if you pay rent and pick the old regime |
| Special allowance | ₹29,300 | Balancing figure |
| Employer PF | ₹4,800 | 12% of basic. Part of CTC, not paid to you monthly |
| Gratuity accrual | ₹1,924 | 4.81% of basic. Paid only after 5 years |
| Health insurance | ₹1,000 | If the client includes it |
| Statutory bonus | ₹2,976 | Some EORs show it separately |
| Total CTC | ₹1,00,000 |
Gross pay (before deductions) is ₹89,300. Out of that: your PF ₹4,800, professional tax about ₹200, and TDS of roughly ₹5,000 to ₹6,000 under the new regime. Take-home: about ₹78,000 to ₹79,000. Ask the EOR for this table for your own offer before you accept. If they will not give it, be careful.
Tax regime. In April the EOR asks you to pick old or new and submit a declaration. For most people with few investments, the new regime is better. If you pay high rent or have a home loan, run both numbers. Raises and bonuses are decided by the client and processed by the EOR. Do not accept a bonus paid straight to your account from abroad. It creates a tax problem for you.
PF, ESI, gratuity and the rest
You get all of them. The EOR is a normal Indian employer under the law.
| Benefit | Do you get it? | How it works |
|---|---|---|
| Provident Fund | Yes | 12% from you, 12% from the EOR. Give the EOR your existing UAN. Never create a second one. Check your passbook on the EPFO portal every quarter. |
| ESI | Only if gross pay is ₹21,000 or less | Most EOR hires earn above this, so group health insurance matters more. |
| Gratuity | Yes, after 5 years | Last basic × 15 ÷ 26 × years of service. After just 1 year on a fixed-term contract. Paid within 30 days of leaving. |
| Statutory bonus | If basic is ₹21,000 or less | Minimum 8.33%, paid once a year. |
| Maternity leave | Yes | 26 weeks paid, after 80 days of service. The EOR pays. No termination during it. |
| Paternity leave | Depends on the client | No central law. Many foreign clients give 2 to 4 weeks. Ask. |
The gratuity trap. Your 5 years count with the EOR, not the client. If the client switches EOR after 3 years and you move with them, the clock can reset to zero. Ask the new EOR to write your original joining date into the agreement "for the purpose of gratuity and continuity of service."
When you leave, the EOR must mark your date of exit on the EPFO portal. Without it, you cannot transfer or withdraw your PF. Ask for written confirmation. If it is not done in 30 days, file a grievance on EPFiGMS with your UAN.
Health insurance, leave and holidays
Health insurance is not required by law above the ESI limit. But almost every EOR arranges a group plan, and most foreign clients pay for it. It costs the client about ₹8,000 to ₹25,000 a year. Ask these before you sign:
Sum insured
₹3 lakh is the floor. ₹5 lakh is common. ₹10 lakh is good for a family. Ask if you can top up at your own cost.
Who is covered
You only? Spouse and children? Parents? Family floater is the usual format.
Start date and waiting periods
Day one is best. Group plans usually waive the 30-day wait and cover pre-existing conditions from day one. Get that in writing.
Cashless hospitals
Ask for the TPA name and check that hospitals near you are on the list. Ask if maternity is included.
If the client does not offer insurance, ask them: "Most India EOR hires get a group health plan. It costs about ₹15,000 a year. Can we add it?" Most say yes.
Paid leave. You get the better of the state minimum and the client's policy. State minimums are around 12 to 18 days of earned leave plus sick and casual leave. Many foreign clients give 20 to 25 days. Ask which applies and get it in your agreement. Apply for leave in the EOR's portal, not just on Slack. If it is not in the system, payroll does not know about it.
Holidays and hours. You follow the Indian holiday list, usually 10 to 12 days including 26 January, 15 August and 2 October. You do not get the client's holidays unless they choose to give them. If the client is in the US, get your core hours in IST and the expected overlap in writing. Indian law caps work at 48 hours a week.
Who do I talk to?
| For | Go to |
|---|---|
| Work, targets, reviews, raises, promotions | Your manager at the client |
| Payslips, tax declarations, PF, insurance claims, leave records, letters | The EOR HR team. Get a named contact on day one. |
| A problem with your manager or the client | The EOR HR first. The EOR has a legal duty to protect you. |
| Sexual harassment | The EOR's Internal Committee under the POSH Act |
| Late or unpaid salary the EOR does not fix | Labour commissioner of your state |
| PF not deposited, or date of exit not marked | EPFO grievance portal (EPFiGMS) |
Leaving: notice, settlement and letters
Notice period
Whatever is in your EOR agreement. It works both ways. If you resign, email your client manager and the EOR HR on the same day.
Final settlement
Everything owed as wages must be paid within 2 working days of your last day. Law since 21 November 2025. Gratuity within 30 days.
If the client ends it
The EOR still owes you notice or pay in lieu. If you count as a "worker" with over a year of service, also 15 days' pay for every completed year.
The EOR can deduct a notice shortfall from your settlement only if your agreement allows it. It can never hold your PF or gratuity to make you serve notice.
Collect before you go: relieving letter, experience letter naming the client, itemised final settlement and last payslip, written confirmation that your date of exit is marked on EPFO, and Form 16 by 15 June next year. Group health cover ends on your last day. Ask whether you can port it to an individual policy with the same insurer before it ends.
Twelve questions to ask the EOR
Copy this list and send it. A good EOR answers all twelve in one email. If they cannot, that tells you something.
- What is your legal name and CIN?
- Do you own your Indian entity, or use a partner? If a partner, who?
- Will my offer letter name the client company?
- What is my full CTC breakup, and my expected monthly take-home?
- Is my salary fixed in rupees, or does it move with the exchange rate?
- What date is salary paid each month?
- Will you use my existing UAN?
- Is health insurance included? Sum insured? Family cover? From which day?
- Which leave policy applies, and how many paid leave days do I get?
- Who is my HR contact and how do I reach them?
- What is my notice period, both ways?
- Will my experience letter name the client, my role and my dates?
Questions people ask
What does it mean to be hired through an EOR in India?
A registered Indian company (the EOR) signs your employment contract, pays your salary in rupees, and handles PF, ESI, tax and compliance, while you do your daily work for a foreign company that has no legal entity in India. You are a full-time employee of the EOR, on assignment to the foreign company.
Is EOR employment legal in India?
Yes. An EOR is a normal Indian employer under the Code on Wages, Code on Social Security, Industrial Relations Code and state Shops and Establishments Acts. You get the same statutory rights as any Indian employee.
Am I an employee or a contractor if hired through an EOR?
An employee. You should receive an employment agreement, monthly payslips, PF contributions, Form 16 and paid leave. If you are asked to sign a contractor or consultant agreement, that is not EOR employment.
Who gives my experience letter and relieving letter?
The EOR, as your legal employer. A good EOR names the client company, your role and your dates in the experience letter. You can also ask your client manager for a separate reference letter.
Will an EOR job cause problems in background verification?
No, as long as you disclose it. Tell your next employer you were employed by the EOR and deployed to the client. BGV agencies verify with the EOR, since it appears on your PF and Form 16 records.
Do I get PF and gratuity through an EOR?
Yes. The EOR contributes 12 percent of your basic pay to PF and you contribute 12 percent. Gratuity is payable after 5 years of continuous service with the EOR. ESI applies only if your gross pay is ₹21,000 or less per month.
Do I get health insurance through an EOR?
Not by law above the ESI limit, but most EORs arrange a group health plan and most foreign clients pay for it. Ask for the sum insured, who is covered, and the start date.
Am I paid in rupees or in foreign currency?
In rupees, into your Indian bank account, with TDS deducted. Your CTC may be fixed in rupees or converted from a foreign currency. Ask whether the rupee figure is fixed for the year.
What happens if the foreign company stops paying the EOR?
The EOR is still legally required to pay your wages by the 7th of the following month under the Code on Wages. If it does not, you can file a claim with the labour commissioner in your state.
What is the difference between EOR and third party payroll?
Third party payroll usually means a staffing agency places you at an Indian company at a lower grade. EOR employment means a foreign company with no Indian entity hired you directly and uses the EOR only for legal employment and payroll. You are a core member of their team.
How long is the notice period for an EOR employee?
Whatever is in your contract, usually 30 to 90 days, and at least the state minimum, which is usually one month after confirmation. It applies to both sides.
How soon must my final settlement be paid?
Within 2 working days of your last working day under Section 17(2) of the Code on Wages, in force since 21 November 2025. Gratuity must be paid within 30 days.
We are an Indian EOR. We own our Indian entity. We hire only in India.
Here is what you get as a Saileor employee, so you can compare any EOR against it.
Book a 30-minute call- Offer letter and employment agreement that name your client, your role and your reporting manager.
- Salary on the last working day of the month, in rupees, with a payslip in your inbox the same day.
- Your existing UAN linked. No new PF account.
- Group health insurance with family cover, arranged before your start date when your client includes it. If they do not, we tell you, so you can ask them.
- A named HR contact on WhatsApp and email, with a reply within one working day.
- Experience and relieving letters that name the client, on your last working day.
- Final settlement within 2 working days. Date of exit marked on EPFO within 7 days.
If your future employer is deciding how to hire you in India, send them to saileor.com/hire-in-india. Pricing is public at saileor.com/pricing-eor-india.