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Every rule a company hiring in India has to run, in the order you meet it: registration, wages, PF and ESIC, tax, leave, holidays, overtime, exits and gratuity, with a detailed guide for each.
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Employing people in India means meeting rules at three levels: the four central labour codes in force since 21 November 2025, state laws such as the Shops and Establishments Act and professional tax, and monthly payroll deposits for PF, ESIC and income tax. This hub explains each obligation in plain terms and links to Peorient’s detailed guide, in the order an employer meets them.
To employ staff in India you either register your own entity or use an Employer of Record that is already registered. The obligations are the same either way: register under the state shops law, pay at least the minimum wage, deposit PF and ESIC, deduct professional tax and TDS, grant statutory leave and pay gratuity when it falls due.
Indian employment law sits on the concurrent list of the Constitution, so Parliament and the states both make rules. Since 21 November 2025, the central layer is four labour codes: the Code on Wages, the Industrial Relations Code, the Code on Social Security and the Occupational Safety, Health and Working Conditions Code. Together they replaced 29 older central acts. Our India labour laws guide maps what each code replaced and what changed for employers.
The state layer still decides much of your day-to-day compliance. Each state runs its own shops and establishments regime, decides whether professional tax applies and at what slab, and sets many leave and holiday rules. Payroll adds a third layer: monthly deposits and returns for provident fund, state insurance and income tax.
| Layer | What it covers | Where to start |
|---|---|---|
| Central labour codes | Wages and the 50% wage rule, social security, working hours, overtime, standing orders and dismissals | India labour laws 2026 |
| State laws | Shops and establishments registration, professional tax, leave and holidays | Shops and Establishments Act by state |
| Payroll filings | PF, ESIC, professional tax and TDS deposits and returns | Payroll compliance in India |
Peorient guides are updated for the labour codes in force since 21 November 2025.
First decide who the legal employer will be. A foreign company can incorporate an Indian subsidiary and register it for everything below, or it can hire through an Employer of Record that is already registered and becomes the legal employer on paper. Our labour laws guide sets out which obligations stay with you under each route.
If you run your own entity, four registrations come first:
Before you make an offer, price the whole package rather than the salary alone. The India hiring cost calculator adds employer PF, ESIC, gratuity and an EOR fee to a salary in rupees and US dollars.
Most compliance failures in India are payroll failures: the wrong wage base, a missed deposit or an allowance that should have attracted PF. Five checks cover most of the risk.
| Monthly deadline | What is due | Guide |
|---|---|---|
| 7th of the following month | TDS deducted from salary (March has a later deadline) | Payroll compliance |
| 15th of the following month | EPF contributions and the electronic challan cum return | EPF and ESIC |
| 15th of the following month | ESIC contributions | EPF and ESIC |
| Set by each state | Professional tax, monthly or half-yearly | Professional tax |
Deadlines move when they fall on a holiday or when the authority extends them. Check the portal before each run.
Peorient is an EOR and PEO advisory focused on hiring in India. Tell us the roles, salaries and start date, and we compare written quotes from India providers so you see the full cost and who will hold your compliance.
There is no single national allowance of earned, casual and sick leave for private employees. The state shops law or the applicable code sets the minimum, and your contract can only improve on it. Our leave policy guide compares eight hiring locations and covers accrual, carry-forward and encashment.
Exits are where small errors turn into disputes. The contract sets the notice period, and an early release is usually handled as a notice period buyout, which has its own tax and settlement questions. See notice period buyout in India.
The full and final settlement then has to include unpaid salary, leave encashment where the policy or state law provides it, and gratuity where it is due. Gratuity is payable after five years of continuous service, or after one year for fixed-term employees under the Code on Social Security. It is 15 days’ wages for each completed year, calculated on a 26-day month, and the tax exemption is capped at ₹20 lakh. See gratuity in India.
Run it yourself when you already have, or need, an Indian entity for other reasons and expect a team large enough to justify local HR and payroll staff. Use an Employer of Record when you want to hire before incorporating, test the market or keep a small team. The EOR holds the registrations above, runs payroll and files the returns, while you direct the work and fund salary and costs.
If you take the EOR route, Peorient’s first pick for India is Remunance, an India specialist with its own entity in Pune and fees of $99, $149 or $199 a month by salary band, with 10% off for 12 months through Peorient. Compare it with 11 other providers, by fee and India employing entity, in our Best EOR in India guide, and see what all 12 charge for the same hire in the India EOR Price Index 2026.
Disclosure: Peorient is affiliated with Remunance and may earn a referral fee.
| Guide | What it answers |
|---|---|
| India labour laws 2026 | What the four labour codes changed, applicability thresholds, penalties and a 90 day plan |
| Shops and Establishments Act by state | Thresholds, deadlines, fees and documents for each state |
| Payroll compliance in India | The deductions, deposits and records every payroll run needs |
| EPF and ESIC employer contributions | 2026 rates, the ₹25,000 PF ceiling and worked examples |
| Professional tax in India | Slabs by state, exemptions and deduction timing |
| Overtime rules in India | Eligibility, hour limits, double pay and records |
| Leave policy in India | Earned, casual and sick leave in eight hiring locations |
| Maternity leave in India | The 26 week entitlement, eligibility and ESIC benefits |
| Paternity leave in India | What the law requires and how private employers set policy |
| Public holidays in India 2026 | National, gazetted and state holidays and pay for holiday work |
| Notice period buyout in India | Calculation, tax and final settlement on early exits |
| Full and final settlement in India | Payment timelines, salary, leave, gratuity and deductions at exit |
| Gratuity in India | Eligibility, the 15/26 formula and the ₹20 lakh tax cap |
| India hiring cost calculator | The full monthly cost of a hire in rupees and US dollars |
| Best EOR in India | 12 providers compared by fee and India employing entity |
| India EOR Price Index 2026 | Published EOR fees and all-in costs for 12 providers |
We add new guides to this list as we publish them.
The four labour codes in force since 21 November 2025 (wages, industrial relations, social security, and occupational safety and working conditions) plus state laws on shops and establishments, professional tax, leave and holidays. Payroll adds monthly PF, ESIC and TDS deposits.
PF registration is mandatory once an establishment employs 20 people, and ESIC applies from 10 employees in notified areas. Many employers register for PF voluntarily from the first hire.
At minimum, 12% EPF plus 0.5% EDLI and 0.5% admin on wages up to ₹25,000, which is up to ₹3,250 a month, and 3.25% ESIC for employees earning up to ₹21,000 gross. Budget for gratuity, any insurance you offer and, if you use one, an EOR fee. The India hiring cost calculator totals it for you.
For fixed-term employees, yes: the Code on Social Security makes them eligible after one year. Permanent employees qualify after five years of continuous service, with exceptions for death and disablement.
Yes. The EOR is the legal employer, so it holds the PF, ESIC, professional tax and shops registrations, runs payroll and files the returns. You direct the work, fund salary and costs, and should ask the EOR for the name of its Indian employing entity in writing.
Start with the India hiring cost calculator to price a role, then send us the details through the free shortlist form. We reply within one business day, and most shortlists are ready in 2 to 3 business days.
Foreign nationals working in India also need the right visa; see our guide to work permits in India.
For the providers themselves, see our comparison of the best EOR providers in India.
Written by
Lead India Employment and Payroll Specialist · 13+ years experience
Priya is Peorient's resident expert on hiring in India. Former senior HR Tax consultant at a Big 4 firm in Bengaluru and Head of Payroll Operations at a Pune-based EOR. Advocate enrolled with the Bar Council of Maharashtra and Goa. Has run state-level registrations in 14 Indian states.
