PEO India

Professional Employer Organization (PEO)

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Global PEO in India

India has emerged as a prominent country for Professional Employer Organizations (PEOs) due to its rapidly growing economy, vast talent pool, and business-friendly environment. As a PEO destination, India offers numerous advantages to international companies seeking to expand their operations. With a large and diverse workforce, businesses can access a wide range of skilled professionals across various industries. Additionally, India’s favorable labor laws, cost-effective labor rates, and favorable taxation policies make it an attractive option for foreign enterprises looking to streamline their human resources functions and mitigate employment-related risks. Moreover, the country’s robust technological infrastructure and English-speaking workforce facilitate seamless communication and operational efficiency. As a result, India continues to solidify its position as a preferred PEO hub, supporting global businesses in their quest for expansion and success.

What Is a PEO?

A PEO, or Professional Employer Organization, is a company that provides a range of HR and payroll services to small and medium-sized businesses. These services can include employee benefits, payroll, compliance with labor laws, and recruiting and training.

PEOs work by entering into a co-employment agreement with the businesses they serve. In this arrangement, the PEO becomes the employer of record for the business’s employees, taking on responsibilities such as payroll, tax withholding, and employee benefits. The business, however, retains control over its day-to-day operations and the supervision of its employees.

PEOs can help businesses streamline their HR and payroll processes, reduce costs, and free up time and resources to focus on their core business activities. They can also provide access to a range of benefits and resources that small businesses may not be able to afford or manage on their own.

PEOs are also understood as employer of record / EOR at times.

India – Country Overview

India, the world’s largest democracy, also has the world’s second-largest population. Culture and civilization have a long history and have had a global impact. In addition, India is a fast-rising economic and nuclear power. With a rapidly expanding economy, India increases exports and produces plenty of new businesses and jobs.

Capital City

New Delhi


Indian Rupee (₹)

Principal Language



Federal Parliamentary Republic

Employment Contracts in India

No law imposes written contracts in India, but they are generally used to protect workers and employers and limit legal action. However, fixed-term contracts must be in writing. 

India employment contracts typically include: 

  • Performance assessments 
  • Deductions 
  • Pension 
  • Grievance and disciplinary procedure 
  • and more 

The different types of employment relationships are: 

  • Permanent Employment – Per India’s Industrial Relations Code (IRC) 2020, permanent employment generally do not have any fixed termination date. Permanent employees enjoy statutory benefits such as paid annual leave, sick leave, compulsory health insurance, gratuity pay, and provident fund. 
  • Fixed-Term Contracts – Fixed-term contracts are usually for a set period under a written agreement, and the maximum term for which this designation may run is seven years. 
  • Temporary Employment – Per the Model Standing Orders for Service Sector 2020 India, temporary employment is for work that is essentially temporary and usually completed in a limited time. Temporary work agencies (TWAs) handle most temporary contracts in India. 

Probationary Period 

A probationary period typically lasts up to 6 months in India, per the Model Standing Orders for the Industrial Relations Code, 2020. This period can further extend up to 3 months. 

Working Hours in India

The Occupational Safety, Health, and Working Conditions Act 2020 of India states that employees cannot work more than 8 hours a day, six days a week. According to the Factories Act, the daily work schedule cannot exceed 9 hours, and the weekly work schedule cannot exceed 48 hours. 

Holidays in India

Employees in India are entitled to the following leaves: 

  • Annual leave in India – Per India’s Occupational Safety, Health, and Working Conditions Act 2020, employees who have worked for at least 180 days in a year are allowed one leave per 20 days of work. Employees under 18 are entitled to one leave per 15 days of employment. 
  • Maternity leave in India – Per the Maternity Benefit Act of India, every female employee of a company with at least ten employees with 26 weeks of paid maternity leave can begin up to 8 weeks before the due date. Additionally, a woman who adopts a child under three months is entitled to 12 weeks of adoption leave. 
  • Sick leave in India – Company policies primarily govern sick leaves. The length of statutory sick leave varies by industry and ranges from 15 to 40 days. 
  • Paternity leave in India – While there is no statutory minimum paternity leave for private-sector workers, male government employees can take up to 15 days of leave if they have fewer than two surviving children. 

Public Holidays 

The following are the statutory national holidays observed in India: 

  • January 13 – Lohri 
  • January 26 – Republic Day 
  • March 11 – Maha Shivaratri/Shivaratri
  • March 28 – Dolyatra
  • March 29 – Holi
  • April 2 – Good Friday 
  • April 14 – Ambedkar Jayanti 
  • April 21 – Rama Navami 
  • April 25 – Mahavir Jayanti 
  • May 14 – Ramzan Id/Eid-ul-Fitar 
  • May 26 – Buddha Purnima/Vesak 
  • July 21 – Bakr Id/Eid ul-Adha 
  • August 9 – Muharram/Ashura 
  • August 15 – Independence Day 
  • August 30 – Janmashtami 
  • October 2 – Mahatma Gandhi Jayanti 
  • October 15 – Dussehra 
  • October 19 – Milad un-Nabi/Id-e-Milad 
  • November 4 – Diwali/Deepavali 
  • November 19 – Guru Nanak Jayanti 
  • December 25 – Christmas


In India’s payroll, the salary has several elements that make up employee compensation. These elements are the Cost to the company (CTC), Net Salary, Gross Salary, deductions, allowances, Form-16, payslips, bonus, one-time payments, etc. 

To process payroll efficiently in India, the core activities include understanding the taxable and non-taxable components of the salary, gathering the data required to run the payroll, and the data needed to validate the payroll. In addition, Indian organizations must adhere to several statutory compliance requirements; otherwise, they face heavy penalties. 

The standard statutory compliance requirements are:

  • Tax deduction at source (TDS)
  • Provident funds and ESI funds
  • Gratuity
  • Professional tax

Global Mobility in India

All foreign nationals seeking to enter India must obtain a visa.

There are typically the following categories of visas in India:

  • Transit visa
  • Tourist visa
  • Employment visa
  • Business visa
  • Student and research visa
  • Entry (‘X”) visa
  • Conference visa

India has specific requirements for issuing work permits and visas to employees assigned to work in the country. The most common is the Employment or E visa. It is valid for one year or until the end of the contract in India (up to 5 years).

Employee Benefits in India

The Pension Fund Regulatory and Development Authority (PFRDA) administers and regulates the National Pension System (NPS), a voluntary, contribution-based retirement savings plan. 

The Indian Government established a pension scheme within the NPS called the Atal Pension Yojana (APY). In addition, some industries have various other pension plans that offer retirement benefits. 

Social insurance, often known as social welfare, is a government-mandated insurance program that provides financial help to the elderly, disabled, and injured. 

Some examples of social insurance programs in India are: 

  • Dependents’/Survivors Benefit – Survivor benefits for work-related injuries that result in death are as follows: 
    • Spouse’s pension – 60% of the disability pension 
    • Orphan’s and widowed mother’s pension – 40% of the disability pension 
    • Other eligible survivors’ pension – 40% of the disability pension to which the deceased was entitled is payable to eligible survivors and 20% to other dependents under 18. 
  • Life and Disability Insurance/Benefit – Depending on which pension system an employee is a member of, disability benefits may vary. Employees who suffer a temporary disability due to a workplace injury are paid 90% of the insured person’s average daily wages for the duration of the disability (must last at least three days). 

In India, there are several statutory benefits based on various industry acts. 

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