Sometimes the most challenging part of an expansion is determining how to pay your employees. Will you add them to an internal payroll, or do you want to outsource? What taxation rules...
Read MoreSometimes the most challenging part of an expansion is determining how to pay your employees. Will you add them to an internal payroll, or do you want to outsource? What taxation rules do you need to follow? How can you learn each of these rules while you run your company? Globalization Partners can help. We handle payroll for all your employees and also take on the liability, so you can focus on growing your business.
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Sometimes the most challenging part of an expansion is determining how to pay your employees. Will you add them to an internal payroll, or do you want to outsource? What taxation rules do you need to follow? How can you learn each of these rules while you run your company? Globalization Partners can help. We handle payroll for all your employees and also take on the liability, so you can focus on growing your business.
Employers in India contribute to three different tax areas:
Both employees and employers must contribute to the EPF, which goes toward retirement benefits and pension. Employers contribute 3.67% to this fund and another 9.94% to other social insurances. India operates under a progressive tax scheme with higher tax rates based on an employee’s increased income. As an employer, it’s critical to know where your employees fall in the tax bracket.
Not only will you need to set up payroll in India, but you’ll also have to decide which payroll option is the best for your company. The three main India payroll options include:
First, you’ll need information from every employee such as a permanent account number, proof of investments, details of dependents, certification from their previous employer, a written employment contract, and more. To register for social security, you’ll also need a provident fund number and the employee state insurance number.
India typically uses probationary periods of three months, and an employer can extend it for another three. The best way to establish entitlement and termination terms is in a written employment contract. Typically, these contracts outline a 15 day notice period during probation and 30 days during regular employment. Employees who have worked for five or more years receive some kind of severance payment.
Expanding to India is an exciting time, but it can also be challenging if you don’t already know the ins and outs of India payroll. Instead, choose an industry leader who will guide you toward success. Globalization Partners will help you set up your payroll in India and stay with you every step of the way. Contact us today for more information.
If you’re ready to grow your business, or you have questions about a specific country, complete the form. One of our experts will be in touch shortly.
