Expatries Network
India

Employment contract and termination in India

In India, the drafting of the employment contract commits the payroll for its whole duration: the language used, the form adopted and the mandatory particulars are fixed by local law, not by the practice of head office.

Termination is the moment when drafting errors are paid for. Final settlement, notice, severance and exit documents obey local rules that the payroll manager applies every month: it is that person, and not the legal department at head office, who spots a poorly drawn contract. Having the model contract reviewed by the firm that will run the payroll costs little and avoids most disputes.

Salary structuring is the Indian subject par excellence. Remuneration is rarely presented as a single figure: it is split between basic salary, house rent allowance, various allowances and employer contributions, each component carrying its own consequences for provident fund contributions and income tax. An offer expressed as cost to company, the standard local formulation, says nothing about take-home pay.

Administrative geography weighs just as heavily. A provider registered in a single state cannot serve a client established elsewhere without further formalities: the question to ask concerns the states actually covered, not the national coverage advertised.

Corporate tax clearance certificates do not exist. The document is unknown in India, and a candidate producing one deserves close scrutiny. The workable check is the publicly visible filing status of goods and services tax returns.

The local framework in India

Working languages
Hindi and English
Payroll currency
INR
European status
Outside the European Union and the European Economic Area

Points to watch in India

Deux vérifications indiennes portent plus que toutes les autres : la validité du GSTIN et l'existence d'un TAN, sans lequel le cabinet ne peut légalement verser la retenue à la source sur les salaires de vos clients. Ne pas réclamer d'attestation de régularité fiscale : elle n'existe pas pour les sociétés, et un document ainsi intitulé produit par un candidat mérite méfiance. Beaucoup d'obligations sont fixées État par État (Shops & Establishments, Professional Tax, Labour Welfare Fund) : demander dans quels États le cabinet est enregistré, car un prestataire enregistré au seul Karnataka ne pourra pas servir un client à Mumbai sans démarche supplémentaire.

Back to the India profile

You employ staff in India

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