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Expanding into a new country should speed up your growth, not drown your team in legal complexities, payroll problems, and compliance risks. However, for multiple US businesses, international hiring often leads to just that. Establishing a local entity can take months, cost tens of thousands of dollars, and compel leadership to navigate unfamiliar labor laws before any employee becomes productive.
That is why Employer of Record (EOR) services have become a core part of modern global expansion strategies.
But one question always comes first.
How much does an Employer of Record actually cost?
The answer depends on where you hire, how many employees you need, and what level of compliance and HR support your business requires. This guide breaks down EOR pricing in India, one of the most cost-effective and talent-rich EOR markets globally.
If you are evaluating EOR services, this article will help you understand real costs, pricing models, hidden fees, and how to assess value beyond the monthly invoice.
An EOR is essentially a partner that helps your company hire employees in another country. While you focus on the day-to-day tasks like managing performance and overseeing projects, the EOR takes care of all the legal and official aspects of employment. This means they handle things like contracts, payroll, and compliance with local labor laws, which allows you to focus on growing your team and business without the legal headaches.
This includes:
For companies expanding into different countries, where labour laws vary by state and change frequently, this model removes compliance risk and speeds up hiring dramatically.
Prior to cost, it is helpful to comprehend why EOR is frequently the recommended choice.
Establishing a foreign subsidiary usually entails:
In India, the cost of company setup alone, ignoring internal HR and regulatory expenses, can range from $20,000 to $40,000.
An EOR substitutes a fixed, per-employee fee for the entire structure. Employers can scale teams up or down without long-term commitments and employ in a matter of days rather than months.
Employer of Record pricing varies widely by country because it reflects differences in labour laws, statutory employer obligations, payroll complexity, and the overall cost of operating in each market.
Many EOR platforms have a standardised pricing model that simplifies budgeting. Regardless of the country, these start at about $599 per employee each month. This strategy makes budgeting easier for businesses that hire people from different areas.
EOR pricing in India varies based on provider scale, service depth, and local expertise. By using local infrastructure and on-the-ground compliance teams, India-focused providers usually offer the most competitive pricing, ranging from $49 to $150 per employee per month. Mid-market international providers, who offer more extensive regional coverage with mild localization, typically charge between $250 and $400. Large international platforms that use uniform pricing across nations typically start at $599 per employee per month or more.
Lower prices do not always equate to less services, but they do necessitate careful consideration. Businesses should examine what is covered by the base price, how local compliance is managed, and whether there are any additional fees.
For hiring through an Employer of Record (EOR), the Philippines is often compared to India, especially for customer service, financial operations, and service jobs. The Philippines has more required benefits and labor rules than India. The fees for hiring an employee through an EOR usually start at $190 per month. Companies often choose the Philippines for jobs that need strong English skills and a good understanding of US culture, even though it costs a bit more.
To gain a comprehensive understanding of EOR pricing, it’s essential to look beyond the seemingly straightforward headline monthly fee. The total cost comprises multiple components. You can understand the pricing details and makemore strategic decisions that fit your company’s requirements if you examine the following factors.
This is the agreed compensation for the employee, which includes base salary and allowances. Although not part of the EOR fee, the salary level often influences pricing in percentage-based models.
Indian law mandates several employer contributions, including:
A reliable EOR makes sure that payments are calculated accurately and sent out on time.
This is the cost incurred by the provider for serving as the legitimate employer. Usually, it includes:
Depending on the pricing strategy, fees could be fixed or based on salary.
Many EORs provide statutory insurance as part of their services, while optional benefits, like private health coverage, are often available for an additional fee. This allows companies to tailor their employee benefits packages according to their specific needs.
Most Employer of Record (EOR) providers use one of three common pricing structures. Understanding how each model works is very important for choosing the option that best aligns with your hiring strategy and budget.
Fixed Monthly Fee
Under this model, the EOR charges a flat fee per employee each month, regardless of salary level. It helps in making the budget straightforward, especially for teams with varied compensation structures. In India and parts of Southeast Asia, fixed monthly fees typically range from $99 to $250 per employee, depending on the scope of services included.
Percentage of Payroll
Here, the EOR fee is calculated as a percentage of the employee’s gross salary, usually between 5% and 15%. Even though this model seems cost-effective for junior or lower-paid roles, costs increase as wages rise, making it less predictable for senior or highly skilled positions.
Hybrid Model
The hybrid approach combines a base monthly fee with a smaller percentage of payroll. This structure provides a balance between predictable costs and flexibility, allowing companies to pay a stable core fee while accounting for variations in compensation or service requirements.
Although prices can differ from country to country, a number of significant factors constantly influence prices throughout Southeast Asia, including Malaysia, Vietnam, Indonesia, the Philippines, and India.
When you understand these aspects, it will help you to confidently select the best EOR model and forecast costs.
Senior-level or regulated roles typically require more detailed pay structures and benefits administration. EOR fees are higher for leadership, technical, or compliance-heavy positions compared to entry-level or support roles.
Within and across Southeast Asia, prices might differ dramatically. Compared to secondary cities, major commercial hubs and metro areas sometimes have greater income norms and benefit expectations. The intricacy of pricing and compliance may also be impacted by state or local labor laws and regulations.
Cost is directly impacted by the total number of employees overseen by the EOR. While smaller teams may pay somewhat higher rates because of fixed administrative overheads, larger teams frequently benefit from volume-based reductions that lower the per-employee charge.
Stricter labor and compliance regulations apply to certain sectors such as finance, healthcare, and regulated technology. To handle extra reporting, audits, or regulatory requirements related to certain industries, EOR providers may impose higher fees.
The scope of services included in the EOR agreement greatly affects the pricing. Basic payroll and compliance services are part of the offering, while customized benefits, comprehensive HR reporting, immigration support, and specialized employment contracts can increase the overall costs associated with EOR.
The lowest advertised EOR fee may not accurately reflect the actual cost of employment. Certain providers impose additional fees beyond the standard monthly charge, which can increase overall expenses in the long run.
One-time setup or onboarding fees, which are often charged at the start of the employment to cover contract development and system installation, are all included in typical hidden costs. Working capital may be temporarily hampered by certain EORs’ requirement for security deposits, which are frequently connected to employee notice periods.
Another common cost is foreign exchange markups on payroll payments, where providers use less favorable exchange rates for cross-border transactions. Benefits administration fees may also come up separately, especially for private health insurance or non-statutory perks. Plus, contract changes or employee offboarding can lead to extra fees if they are not clearly included in the base agreement.
For businesses intending to employ fewer than 200 individuals, opting for an Employer of Record is often more economical in the short to medium term.
Setting up a business requires high initial costs for legal and incorporation fees. After that, there are ongoing costs for payroll, tax filings, audits, and required reports. Companies also need to invest in dedicated staff for human resources, finance, and legal support to handle local operations. This process can take a long time, often delaying hiring for several months.
An EOR model eliminates these barriers. It requires no upfront investment, operates on a pay-as-you-go pricing structure, and enables rapid market entry, often within days. Compliance, payroll, and labour law risks are handled by the EOR, reducing operational exposure for the employer.
As a result, many companies use EOR services to test markets such as India before committing to a permanent local entity, allowing them to scale teams quickly while maintaining flexibility and cost control.
The Talent Company helps control costs, ensure smooth operations, and maintain a stable workforce over the long term. We achieve this by using a flexible offshore team model that supports compliant and scalable hiring.
By combining local compliance expertise with a strategic workforce approach, The Talent Company helps organisations build stable global teams that remain cost-effective as they scale.
Employer of Record services are not just another HR cost. They are a growth driver for businesses that are looking to expand their teams. EOR allows quicker hiring, cheaper upfront costs, robust compliance protection, and scalable employment administration without the need for entity establishment.
When reviewed properly, EOR can provide a clear return on investment. It helps reduce time-to-market, lowers compliance risks, and lets leadership focus on growing the business. The key is to choose a service with clear upfront pricing and strong local knowledge.
Together, we’ll solve today’s challenge and get ahead of what’s next