Answers written for US Finance Directors, UK CFOs, and founders doing their first India hire.
What is the true all-in cost of hiring in India for a US company?
The all-in India employer cost includes: gross CTC, employer PF at 12% of basic salary, a gratuity provision of 4.81% of basic salary per year, employer health insurance (~$40–60/month), and your EOR management fee. Total employer cost is typically 18–22% above gross CTC, plus the EOR fee. Our calculator includes all of these.
How does India hiring cost compare to the US or UK?
India saves US companies 60–75% vs equivalent US roles and UK companies 55–70% vs UK roles. A senior engineer in Bangalore costs $32,000–$42,000 all-in vs $160,000–$200,000 in San Francisco. The saving compounds — a 5-person India engineering team saves $600,000–$800,000 per year vs a US equivalent team.
Does using an EOR create IRS issues for a US company?
No — using an EOR like Versatile.club is specifically designed to eliminate IRS and FATCA risk. Your US company has no Indian entity, no Indian payroll, and no PE (Permanent Establishment) exposure. The EOR is the legal employer in India. Your US company has a service agreement with the EOR — a clean, IRS-safe structure that requires no special filings.
What is India CTC and how is it different from a US base salary?
CTC (Cost to Company) is the total annual cost of the employee to the employer — including basic salary, allowances (HRA, LTA, special allowance), and the employer's statutory contributions. Unlike US base salary, Indian CTC includes the employer's PF contribution and other benefits. The employee's take-home (in-hand salary) is typically 65–75% of CTC after all deductions.
What Indian statutory costs must I pay as an employer?
As an employer in India (via EOR), mandatory statutory costs are: Employer PF: 12% of basic salary (basic is typically 40–50% of CTC); Gratuity: 4.81% of basic accrued per year of service, payable after 5 years; ESI: 3.25% for employees earning below ₹21,000/month (not applicable for most skilled professionals); and Professional Tax: ₹200/month (state-specific). All of these are handled automatically by Versatile.club.
How does this work for a UK company? What about HMRC?
UK companies using an EOR in India have no PAYE, National Insurance, or HMRC obligations for their India employees — those are handled entirely under Indian employment law by the EOR. There are also no IR35 implications for Indian employees hired via EOR. Your UK entity pays a service fee to Versatile.club (the EOR) — this is treated as a normal business service expense for UK Corporation Tax purposes. We provide GBP-denominated invoicing for easy reconciliation.
What does India EOR cost per employee per month?
India EOR fees typically range from $99 to $299 per employee per month. Versatile.club charges $149 per employee per month, covering employment contract, monthly payroll processing, PF/ESI filings, TDS deduction and deposit, Form 16 issuance, and year-round compliance monitoring. There are no hidden fees — the cost you see in this calculator is the cost you pay.
At what team size should I set up an India entity instead of using an EOR?
For most companies, EOR makes economic sense up to
30–40 India employees. Below that threshold, the cost of setting up and running an Indian Private Limited company (entity setup ~$8,000–$15,000, annual compliance ~$6,000–$10,000, dedicated local finance/HR overhead) exceeds the EOR fee. Use our
EOR vs Entity Decision Tool to model your specific situation.