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HR & Payroll Services
End-to-end HR outsourcing, payroll processing, and compliance solutions.
“Human is not a resource. A human being is a tremendous possibility. If we approach human beings as resources, then we will never unfold their innate genius.”
— Sadhguru
Hiring in India involves more than issuing an offer letter — it means registering for Provident Fund and ESI once headcount crosses the applicable threshold, deducting and filing TDS on every salary run, calculating gratuity correctly, and staying current as India's labour law framework itself shifts under the four consolidated Labour Codes that took effect in November 2025. For a foreign parent standing up its first India team, that compliance layer is usually the part that's genuinely unfamiliar — not the recruiting or the salary math.
AU Corporate's HR & Payroll Services cover that layer end to end: permanent recruitment, contract staffing, and monthly payroll processing with full statutory compliance — built specifically around what a foreign-owned subsidiary needs, whether you're hiring your first employee in India or scaling a team of hundreds. The sections below cover what Indian payroll compliance actually involves, how an Employer of Record arrangement compares to hiring under your own entity, and how our service works in practice.
Permanent Recruitment
Connecting You with Top Talent
In today’s competitive job market, finding and retaining top talent is critical — particularly for a foreign-owned entity that doesn't yet have local brand recognition to draw candidates on its own. We source, screen and manage the hiring process against the role and compensation benchmarks that work in the Indian market, so the entity you're building is staffed by people who fit both the role and the culture.
- ✔ Advanced recruitment tools
- ✔ Industry-specific hiring
- ✔ Culture-fit selection
- ✔ End-to-end lifecycle
Contract Staffing & Third-Party Payroll
Flexible Workforce Solutions
We provide skilled professionals for temporary and project-based roles ensuring flexibility and efficiency. This is also the model most foreign companies use to bring on their first few people in India before an entity is fully operational — we handle the statutory employer obligations while you direct the day-to-day work, so headcount doesn't have to wait on incorporation.
- ✔ Quick deployment
- ✔ Project staffing
- ✔ Diverse talent pool
Payroll & HR Outsourcing
Streamlining HR Operations
Accurate payroll, compliance, and HR lifecycle management solutions tailored for business growth. This is the core of what we do for an already-incorporated subsidiary: your entity stays the legal employer, and we run the monthly payroll cycle, statutory filings and employee lifecycle administration behind it — see the compliance breakdown and process below for exactly what that covers.
- ✔ Payroll processing
- ✔ Compliance
- ✔ HR lifecycle
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What Indian Payroll Compliance Actually Involves
Running payroll in India isn't just computing a salary — it's a set of independent statutory obligations, each with its own trigger, contribution rate, and filing rhythm. Here's what a foreign-owned entity is actually on the hook for once it starts hiring:
Provident Fund (EPF)
Once headcount reaches 20 employees, EPF registration becomes mandatory under the Employees' Provident Fund & Miscellaneous Provisions Act, 1952 (administered by EPFO). Employees contribute 12% of basic wages plus dearness allowance, matched by a 12% employer contribution split into 3.67% to the EPF account and 8.33% to the Employees' Pension Scheme (EPS), with EPS calculated against a statutory wage ceiling of Rs 15,000/month. Contributions are filed monthly through EPFO's Electronic Challan-cum-Return (ECR).
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Employees' State Insurance (ESI)
ESI registration is triggered once an establishment employs 10 or more people (in most states) and covers employees earning up to Rs 21,000/month in gross wages (Rs 25,000 for employees with disabilities) — above that ceiling the scheme simply doesn't apply to that employee. The current contribution split — 3.25% employer and 0.75% employee of gross wages, in force since July 2019 — funds medical and cash benefits administered by ESIC.
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Professional Tax
A state-level tax on salaried employment, deducted by the employer and remitted to the state government — capped at Rs 2,500 per person per year under Article 276 of the Constitution. Applicability and slabs vary by state: Maharashtra, Karnataka, West Bengal and several others levy it, while a handful of states and union territories, including Delhi, don't levy it at all — so this obligation has to be checked state by state, not assumed uniform.
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Gratuity
Under the Payment of Gratuity Act, 1972, any establishment with 10 or more employees owes gratuity to an employee who completes 5 years of continuous service (the service requirement is waived on death or disablement), calculated as 15/26 of the last drawn basic salary plus dearness allowance for every completed year of service. Payouts are tax-exempt up to Rs 20 lakh under Section 10(10) of the Income Tax Act — a ceiling raised from Rs 10 lakh in 2018.
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TDS on Salaries
Employers must deduct tax at source on salary payments under Section 192 of the Income Tax Act, based on each employee's estimated annual tax liability, deposit it monthly, file quarterly TDS returns (Form 24Q), and issue Form 16 to every employee after the financial year closes — errors here are one of the most common sources of employee complaints in a first-year foreign-owned entity.
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Shops & Establishment Registration
Usually the first labour registration a foreign-owned entity needs — required under the applicable state's Shops and Commercial Establishments Act essentially as soon as an office is operational and staff are hired. It governs working hours, holidays and leave entitlements, and is typically a precondition for opening a current account and registering for PF/ESI in several states.
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For the other five compliance regimes a foreign-owned entity carries alongside labour law — corporate governance, environmental, FEMA, data protection and IP — see our full regulatory compliance framework.
Employer of Record vs. Hiring Under Your Own Entity
Foreign companies entering India generally choose between two hiring models, and the right one depends mostly on timing and team size rather than a fixed rule:
Employer of Record (EOR)
A third-party provider becomes the legal employer of record for statutory purposes — payroll, PF, ESI, gratuity and TDS run under their registrations, not yours — while you direct the employee's day-to-day work. This lets you hire in India before an entity exists, which is useful for testing the market or onboarding a first small team quickly.
The tradeoff: EOR pricing scales per employee, so it gets more expensive relative to a subsidiary as headcount grows, and because the EOR is the legal employer, arrangements like IP assignment and equity typically need to route through your own entity anyway once you have one.
Own Entity + Payroll Outsourcing
Your India subsidiary (see our company registration guide) is the legal employer, and a provider like AU Corporate handles payroll processing, statutory filings and employee lifecycle administration on your behalf — you keep full control over employment contracts, IP assignment and the brand your employees work under.
The tradeoff is upfront: incorporation typically runs 4-12 weeks before the entity can operate. For most companies planning a team beyond a handful of people, or planning to stay in India for more than a year or two, this ends up the more cost-effective and controlled route once that setup time is accounted for.
In practice, many foreign parents use an EOR-style arrangement as a bridge — hiring a first employee or two while incorporation is underway — and transition to their own entity's payroll once it's operational. Talk to us about which stage you're at; the right starting point depends on your specific timeline and headcount plan.
How Our HR & Payroll Service Works
Once you're ready to hire — whether it's your first employee or you're standing up a full team — this is the sequence we follow:
1
Payroll Setup & Statutory Registration
We map PF, ESI, professional tax and Shops & Establishment obligations against your actual headcount and the state(s) you're operating in, and complete the registrations before the first payroll run.
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2
Monthly Payroll Processing
Salary computation, TDS, payslip generation and statutory challan preparation, run to a fixed monthly cycle so your finance team always knows what's due and when.
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3
Compliance Filing & Reporting
PF's ECR, ESI returns, professional tax returns and quarterly TDS filings are submitted to deadline, with MIS reporting back to your India team or overseas finance function.
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4
Employee Lifecycle Support
Onboarding paperwork, leave and attendance administration, exits, full-and-final settlement, gratuity calculation and Form 16 issuance — handled end to end, not just the monthly salary run.
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5
Ongoing Regulatory Monitoring
As state-level rules under the new Labour Codes are notified, or PF/ESI thresholds and forms change, we flag what actually affects your payroll before it becomes a compliance gap — rather than leaving you to track it yourself.
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Ready to Set Up Payroll for Your India Team?
Tell us your headcount, states of operation, and where you are in the entity-setup process — our HR & payroll team will get back to you with next steps.
- • Company incorporation and entity selection
- • FDI, FEMA and regulatory guidance
- • Tax, banking and post-incorporation support
Frequently Asked Questions
Continue Your Journey
Company Registration
Set up the entity your India team will be employed under
Regulatory Compliance
The full six-regime compliance framework, including labour law
GCC Setup in India
Building a captive delivery or R&D team? Start here
Business Process Outsourcing
Finance, accounting and back-office support beyond HR
Talk to Our HR Team
Get a payroll quote sized to your headcount and states