Running India Payroll Without an Entity: A US Startup Guide

You have already chosen the no-entity route, so this guide skips the setup debate and covers the part that actually repeats: how the monthly payroll relationship runs between your Employer of Record and your India team, cycle after cycle.

Can a US startup run India payroll without an entity?

Yes. A US startup can run India payroll without a local entity by engaging an Employer of Record, which becomes the single legal employer of your India team. The EOR holds the compliance registrations and runs payroll on your behalf. This is one legal employer, not co-employment.

This route is legally recognized in India, and it is the standard way foreign companies pay India-based staff before they are ready to incorporate. The EOR employs your people under its own registrations, while you keep day-to-day direction of their work.

Because you never sign contracts, invoice clients, or hold a bank account in India through this model, you also avoid creating a permanent establishment that could expose your US company to Indian corporate tax. This guide assumes you have already made that choice and focuses on how the relationship runs each month.

How does monthly India payroll work through an EOR?

Each month you fund the payroll, and your EOR does the rest. At Wisemonk we calculate gross-to-net for every employee, deduct the statutory contributions and tax, deposit them with the authorities, file the returns, and pay each person in INR, all on India's statutory clock.

The cycle is predictable. You send inputs and funds, the EOR processes the run, and confirmations flow back to you. Everything statutory sits inside a broader picture of payroll compliance in India that the EOR owns on your behalf.

The one thing that stays with you is approval. You decide who gets paid, how much, and when the cycle closes; the mechanics of deposit and filing are the EOR's job.

What does the EOR handle each month versus what you approve?

You approve the inputs; your EOR runs everything downstream. You sign off on new joiners, salary changes, variable pay, and the funding total for the cycle. From there the EOR calculates, deducts, deposits, files, and pays, and you never touch a government portal yourself.

The split below is what a steady-state month looks like once your team is live. Your inputs usually start from the agreed salary structure in India, with only the changes for that month layered on top:

What is the monthly India payroll and compliance calendar?

India runs on fixed statutory dates. Salary TDS is deposited by the 7th of the following month, EPF by the 15th, and ESI within 15 days of the month-end. Professional tax dates vary by state. Your EOR tracks all of them so you do not have to.

The table below is the cadence you should expect each cycle, current as of August 2026. It is a summary, not the whole picture, so for the month-by-month detail see our full India payroll calendar.

What gets deducted from each India payroll run?

Four items come out of a typical India payroll run: Provident Fund (EPF), Employee State Insurance (ESI), professional tax, and salary TDS. The first two are shared between employer and employee, professional tax is a small state levy, and TDS is income tax withheld from the salary.

Here is the one-line version of each, current as of August 2026:

• EPF (Provident Fund): 12% from the employee and 12% from the employer, on a wage ceiling of Rs 15,000 per month (about $158). See our glossary entry on what Provident Fund (EPF) is.
• ESI (Employee State Insurance): 3.25% from the employer and 0.75% from the employee, where wages are at or below Rs 21,000 per month (about $220). Read what Employee State Insurance is.
• Professional tax: a state levy, capped by the Constitution at Rs 2,500 per year (about $26). Read what professional tax is.
• Salary TDS: income tax withheld under Section 392 of the Income-tax Act 2025, which took effect on April 1, 2026. Read what Tax Deducted at Source (TDS) is.

That is deliberately the headline only. For the employer and employee split, thresholds, and edge cases, our guide to the full deduction mechanics for US startups goes deep.

What do you receive from your EOR each cycle?

Every cycle you receive three things: individual payslips for your employees, a confirmation that the month's statutory deposits and returns were filed, and a monthly cost or compliance report. Together they give you a clean audit trail without you logging into any Indian portal.

Concretely, a healthy monthly handover includes:

• Employee payslips: an itemized slip for each person showing gross pay, deductions, and net pay in INR.
• Filing confirmation: proof that EPF, ESI, professional tax, and salary TDS were deposited and the returns filed on time.
• Cost or compliance report: a per-employee and total view of what the cycle cost you in USD and INR.

That report is also what makes budgeting predictable, since it maps to the same line items as the cost of an EOR in India that you priced at the start.

How are new hires, raises, and exits handled mid-cycle?

Mid-cycle changes are routine. We onboard a new hire in 24 to 48 hours, apply a raise or a variable-pay change in the next run, and close an exit with full and final settlement within two working days of the last working day, as the Code on Wages requires.

Adding someone is the fastest of the three. Once you approve the offer and compensation, the EOR handles the registrations and paperwork; our guide to how to hire employees in India walks through what onboarding involves.

Exits are the most time-bound. Under Section 17(2) of the Code on Wages, an employee's dues must be settled within two working days of their last working day, which is why the EOR needs the exit and its final figure approved promptly; see our guide to full and final settlement in India.

Who is liable if something goes wrong in a payroll cycle?

The EOR is the employer on record with the Indian authorities, so it carries the statutory filing and deposit obligations. If a deposit is late or a return is wrong, the EOR is accountable to the regulator. Your contract with the EOR then governs how that is put right.

This is the practical payoff of the single-legal-employer model. Because the EOR holds the EPF, ESI, and tax registrations, the statutory relationship is between the EOR and the government, not between your US company and an Indian portal.

You still owe your part of the deal, namely funding the run on time and approving inputs, but the compliance exposure sits with the EOR. Our guide to who is liable when a payroll vendor makes an error covers where the lines fall.

How does a US startup get started running India payroll without an entity?

Getting started is short. You pick your India hires and their compensation, sign the EOR agreement, and fund the first cycle. The EOR registers the employment, onboards each person, and runs payroll from month one. You do not open an entity, a bank account, or a tax registration.

If you are still weighing the setup itself rather than the monthly run, our guide to setting up payroll for a startup in India covers the initial build.

For the entity question specifically, we compare both paths in EOR vs entity in India, so you can see when incorporating starts to make more sense than staying on an EOR.

Why Wisemonk for India payroll without an entity

Wisemonk is an India-native Employer of Record. We help global companies hire, pay, and manage talent in India without setting up a local entity.

We run payroll for 300+ global clients and manage 2,000+ employees across India, processing $20M+ in annual payroll, and we hold a 4.8/5 rating on G2. Pricing starts from $99 per employee per month, and onboarding a new hire takes 24 to 48 hours.

Here is what our monthly service covers:

• Single legal employer: we become the legal employer of record for your India team, so there is no entity and no co-employment.
• End-to-end monthly payroll: we calculate, deduct, deposit, and file EPF, ESI, professional tax, and salary TDS every cycle, on India's statutory dates.
• Fast onboarding: we bring a new hire onto payroll in 24 to 48 hours.
• Contractor payments via AOR: where you engage contractors rather than employees, our Agent of Record service pays them compliantly.
• Transparent reporting: you get payslips, filing confirmations, and a monthly USD and INR cost report every run.

We provide EOR services in India, and we are expanding rapidly into the US and UK markets.