EOR compliance in India: what your accountant needs to know
PF, ESI, TDS, GST, professional tax — the full statutory map for engaging engineers via an Indian EOR. A practical reference, not a legal brief.
This is the document we send to our clients' US/UK accountants when they ask "what's actually being filed in India on our behalf". It's a practical reference — not legal advice — and reflects the regulatory state as of early 2026.
The high-level picture
When you engage an engineer through withRemote's Indian EOR, withRemote Solutions Pvt Ltd (CIN: U78100GJ2025PTC160520) is the legal employer. We handle the full statutory stack. Your obligation is to pay our invoice; ours is to remain compliant with every applicable Indian law on your behalf.
Here is the full list of statutory items, in order of materiality.
1. Provident Fund (PF)
Governing Act: Employees' Provident Funds and Miscellaneous Provisions Act, 1952
Who's covered: Mandatory for employees earning basic salary up to ₹15,000/month. Above that threshold, voluntary — most senior engineers opt out for take-home reasons.
Contributions: 12% of basic from employer + 12% from employee, deposited with EPFO monthly.
Filings: Monthly ECR (Electronic Challan-cum-Return) by the 15th of the following month.
What it means for you: A line item in our invoice marked "Statutory contributions". You see the aggregate; we file with EPFO.
2. Employees' State Insurance (ESI)
Governing Act: Employees' State Insurance Act, 1948
Who's covered: Employees earning ≤₹21,000/month gross. Senior engineers are almost never in this bracket — exemption is the norm.
Contributions: 3.25% employer + 0.75% employee where applicable.
What it means for you: Usually not applicable for the level of engineers we place.
3. Tax Deducted at Source (TDS)
Governing Act: Income-tax Act, 1961
Section: 192 (TDS on salaries)
What we deduct: TDS based on declared investments and the engineer's tax regime election (new regime by default). Calculated monthly and remitted to the Income Tax department by the 7th of the following month.
Filings: Quarterly Form 24Q. Annual Form 16 issued to each employee by June 15 of the following financial year.
What it means for you: No action. We compute, deduct, deposit, and file.
4. Goods and Services Tax (GST) on our invoice
Governing Act: Central Goods and Services Tax Act, 2017
For Indian clients: GST @ 18% (CGST 9% + SGST 9% intra-state, or IGST 18% inter-state) is added on top of our invoice under SAC 998314 (Information technology consulting and support services). Recoverable as input tax credit by GST-registered clients.
For foreign clients (US/UK/UAE/EU): Export of services, zero-rated under Section 16 of the IGST Act. We invoice without GST under a Letter of Undertaking (LUT), filed annually with the GST department. No GST cost to you.
What you need from us: Our GSTIN (24AAECW0706E1ZT) for your records. We provide it on every invoice.
5. Professional Tax (PT)
Governing Act: State-specific (Gujarat Professional Tax Act, 1976 in our case)
Amount: ₹200/month per employee in Gujarat (varies by state).
What it means for you: Built into our cost structure. No action.
6. Gratuity
Governing Act: Payment of Gratuity Act, 1972
When payable: On exit, if the employee has completed ≥5 years of continuous service. Calculated as 15 days of last-drawn salary × years of service.
Funding: Accrued monthly in our provision; paid by us on exit.
What it means for you: Indirectly priced into the EOR markup. You don't see a separate line item, but it's accounted for.
7. Leave Encashment
Statutory framework: Shops and Establishments Act (Gujarat, as applicable to our registered office).
What we accrue: Typically 18–24 days/year, encashable on exit per our employment policy.
What it means for you: Same as gratuity — built into the EOR cost.
8. Foreign Exchange (FEMA) for cross-border invoicing
Governing Act: Foreign Exchange Management Act, 1999
What applies: When we receive USD payment from foreign clients, we file the appropriate FIRC (Foreign Inward Remittance Certificate) and report under the Single Master Form (SMF) on the RBI's FIRMS portal where applicable.
What it means for you: No action. We handle inward remittance compliance. You wire USD; we receive INR after AD bank conversion.
9. Companies Act compliance
Governing Act: Companies Act, 2013
Filings on our side: Annual returns (Form AOC-4 financials, MGT-7 annual return), Director KYC, board meetings, statutory audit by a CA firm.
What it means for you: Nothing. But it's worth knowing we're a fully compliant Pvt Ltd, not a shell. Our CIN is U78100GJ2025PTC160520, registered with the Registrar of Companies, Ahmedabad.
10. Digital Personal Data Protection Act, 2023 (DPDP)
What applies: The DPDP Act came into force in 2024. We collect employee data under the "employment" lawful basis (Section 7) and act as a Data Fiduciary for that data. We don't share employee personal data with you without consent (or aggregated/redacted, where you need it for operational purposes).
What it means for you: If you process employee data in your US/UK systems (e.g., performance reviews in Lattice, code commits in GitHub), you may be a co-controller for that data under the equivalent local laws. We can help map this in your DPA.
What we provide on request
- Form 16A (TDS certificate) for the engineer
- Form 16 (annual salary + TDS certificate) for the engineer
- GST invoice with full SAC code and HSN reference
- FIRC for foreign payments received
- LUT copy for export-of-services proof
- PF passbook for the engineer
- Statutory compliance certificate signed by our CA, suitable for client audits
What this doesn't cover
- Your own US/UK tax position — your accountant needs to advise on whether the engineer's work creates a Permanent Establishment risk in your home country. Spoiler: usually no, but it depends on facts. Most jurisdictions accept that a properly-structured EOR arrangement avoids PE.
- Your own GST/sales-tax position — our invoice to you is a service procurement on your side. Treat per your local tax regime.
- IP assignment — covered by our MSA, not the statutory framework. All IP created by the engineer in scope of your engagement assigns to you on payment of the invoice.
When to bring this document into a conversation
- During vendor due diligence with your finance/legal team
- When your CFO asks "what's their compliance footprint?"
- When an auditor asks for documentation of your offshore engagement structure
- When you're being acquired and the diligence team asks about offshore labour
We routinely sign NDAs and provide additional documentation for due diligence. Ask your withRemote contact.
This document was last reviewed against Indian statutory law in February 2026. We update it when material regulations change. For specific advice on your situation, please consult a qualified Indian Chartered Accountant or your own tax advisor.
Questions? Email [email protected] or book a 30-minute compliance walkthrough.