How to Hire Staff in India


How to Hire Staff in India With Embark

Our staff are experts in fields ranging from operations, payroll, accounting, and more. Learn what you need to expand your business and hire staff in India.


Humayun Tomb; Photo Credit: Raghu Nayyar

Introducing India

India is a vibrant and diverse country in South Asia. With almost 1.3 billion people, it is the largest democracy in the world and the second most populated country in the world. Hindi is the official language and English is the second official language. It has a large and growing high-tech economy and a strong educational system. 

Capital City - New Delhi

Currency - Indian rupee (₹, INR)

Languages Spoken - English, Hindi, and 22 Regional Languages

Population Size - 1.39 Billion (2021)

Time Zone - GMT +05:30

GDP - USD 3.17 Trillion (2021)

Employee Classification

Employees can be majorly divided into two categories –  Contractors and Employees and defining relation with the employee is very important to avoid risks associated with misclassification.

The courts in India have applied the control and integration test to determine whether a person can be classified as an employee or independent contractor. The prima facie test is the control test to determine whether an employer-employee relationship exists and it is not merely to direct the nature of work that has to be carried out but also to control the manner in which it is done.

Another difference between an employer and contractors is an employer is required to withhold tax at the time of payment of salary to employees. The salary paid to an employee may include benefits and allowances that the employee is entitled to, which is beneficial to the employee from a tax perspective. However, with respect to independent contractors, the employer must withhold the applicable taxes; however, the amount paid may not be in the form of salary, but as professional fees for services performed. In both these cases, the employee and independent contractor/s will be required to file their income tax returns as prescribed under law.

Hiring Structure in India

Payroll Cycle

All payments are typically made at the end of the of the month on or before the last working day of each calendar month.

Public Holidays

Jan. 1st    New Year’s Day
Jan. 5th.   Guru Govind Singh Jayanti
Jan. 26th.   Day of the Republic
May 1st.   Labor Day
Aug. 15th.   Independence Day
Oct. 2nd.   Birthday of Mahatma Gandhi
Dec. 24th.   Birthday of the Islamic Prophet Muhammad
Dec. 25th.   Christian Christmas
Dec. 31st.   New Year’s Eve
Date   Holiday
April 15th   Good Friday
May 2nd   Festival of breaking the fast
May 8th   Mother’s Day
June 19th   Father’s Day
July 9th   Festival of Sacrifice
July 29th   Awal Muharram (Islamic New Year)
Oct. 24th   Diwali (Hindu festival of lights)

Benefits & Health Insurance

Most large employers offer competitive benefits and health insurance.  

Income Tax and retirement fund

Employer Tax

Provident Fund (Government Retirement Fund) – 12% 

Health Insurance – 3.25%

Employee Tax Structure

Provident Fund (Government Retirement Fund) – Minimum 12%

Health Insurance – 0.75%

Net Income Range (Rs)

Old Tax Regime

New Tax Regime

Up to 2,50,000

From 2,50,001 to 5,00,000



From 5,00,001 to 7,50,000



From 7,50,001 to 10,00,000



From 10,00,001 to 12,50,000



From 12,50,001 to 15,00,000



Above Rs. 15,00,000



Employment Termination

Typically both employers and employees are expected to provide at least a 30 day notice period before terminating their contract or employment relationship. In the case of misconduct, the employer can terminate the employee without notice.

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