If you're budgeting for your first India hire, the honest answer is: EOR cost in India isn't one number — it's salary plus statutory add-ons plus a platform fee. Here's how each piece actually breaks down.

Employer of Record (EOR) India Cost: Real Pricing Breakdown for 2026

The three components of EOR cost

1. Base salary

Whatever you agree to pay the employee, in USD or INR. This is the largest and most variable piece, and it's set by role and market rate, not by the EOR.

2. Statutory allocations (mandatory, not optional)

• Employee Provident Fund (EPF): 12% of basic salary, employer contribution
• Gratuity: accrued at roughly 4.81% of basic salary, paid out on exit after 5 years' service
• ESI (if applicable): for employees below a wage threshold, additional employer contribution for state insurance
• Professional tax: small state-level tax, varies by state

These aren't EOR markups — they're legal requirements the EOR administers on your behalf regardless of which provider you use.

3. EOR platform fee

This is the provider's actual fee for taking on legal employer status, running payroll, and managing compliance. In India, this typically runs $250-$600 per employee per month depending on provider, service level, and whether benefits administration is bundled in.

Worked example

For a $2,500/month base salary in Karnataka with standard medical insurance:

What drives the fee up or down

Contractor payrolling (simplest, no employment relationship) sits at the low end, often $149/month. Standard EOR for a full employee sits in the $250-$350 range. Enterprise EOR with dedicated HR account management, custom benefits wrappers, and compliance planning for larger teams is typically custom-quoted and scales with headcount, not per-seat linearly.

Hidden costs to ask about upfront

Background check fees, notice period buyout obligations if you terminate early, currency conversion spreads if paying in USD, and offboarding/severance handling. A transparent EOR quotes all of this before you sign, not after your first invoice.

Frequently asked questions

Is EOR cheaper than opening an Indian entity?

For 1-8 employees, almost always yes once you account for entity registration, ongoing statutory filings, and the in-house HR/finance overhead an entity requires regardless of headcount.

Do EOR fees include health insurance?

Sometimes, sometimes not — this varies significantly by provider. Always confirm whether medical insurance is bundled into the platform fee or billed separately per employee.

Can I negotiate the EOR platform fee?

Yes, especially above 5-10 employees. Most providers have list pricing for single hires and negotiate volume discounts as headcount grows.

Want an exact number for your situation? Use the India cost calculator or book a compliance review with your target salary and location.