India Payroll Services

At Bradford Jacobs, we navigate the administration of the Indian payroll system for you. We do the work, so you do not have to.

Indian Payroll

During the 21st century, India’s economy has accelerated to make this vast nation a significant influence in the global marketplace and a leading attraction for international investment and expansion by foreign companies.

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In 2021 the Republic of India was among the world’s fastest-growing economies at 9.5%, while a nominal Gross Domestic Product (GDP) of 2,946 billion US dollars ranked sixth in the world and accounted for over 3.0% of the global economy.

These are among the attractions that draw international corporations towards India’s economy. Foreign companies hiring staff in India and intending to operate payroll for their team face a mass of complexities and not just at the federal level. The first step is to set up a legal entity in the country – potentially an exhausting and time-consuming operation – then comes a multi-layered registration process. Employers and employees each need tax and social insurance numbers. And that is just the start of the registration process. India’s 28 states can also apply their own rules.

Setting up a subsidiary in India to run payroll is one option, but this involves a protracted registration process and poses many challenges. Our Professional Employer Organisation (PEO) and Employer of Record (EOR) services provide complete solutions to every issue your company will face before your planned move into the Indian Market. Our teams step in from the start, locating top-rated talent in India, then guiding you through such procedures and navigating the administration of the Indian payroll system for you.

  • Remote payroll – This option allows businesses to operate under a single payroll system, by adding employees in India to your parent company’s payroll. However, these employees must operate under different regulations, which is likely to cause problems.
  • Internal payroll – You may operate payroll for your subsidiary, especially if you are committed to growing your company’s presence in India. However, this does require hiring dedicated HR staff who understand Indian employment and compliance laws.
  • Indias’ payroll processing company – If you are considering outsourcing, then working with a Indian payroll company will help in processing your payroll – but not when it comes to compliance.
  • Indias’ payroll outsourcing – However, there is another option available that solves both concerns – by working with Bradford Jacobs. We can handle payroll and compliance for all your employees in India. We take the administrative stress off your shoulders so you can focus on what you do best.

Companies looking to open a door into India’s thriving economy will also be in a prime position for further expansion into South Asia, the Far East and Pacific Rim nations. These opportunities come hand-in-hand with challenges – and payroll management is among them. Whether your company is planning to move staff abroad or hire employees in the new territory, you cannot afford to tumble over barriers in India’s payroll and income tax landscape – it will cost you time and money.

Foreign companies can establish a legal entity in India to run payroll for their staff. The most popular and straightforward option is the private limited company for which the application and registration are made to the Registrar of Companies (ROC). Before running payroll in India, taking this step requires detailed practical knowledge of company, tax and employment law and staying up to date with taxation rates.

However, there is an alternative and more straightforward route. Bradford Jacobs’ will navigate around these potential pitfalls effectively and efficiently. We recruit the staff in-country and then implement our comprehensive knowledge of tax and payroll regulations. As part of our service, Bradford Jacobs files returns and remits associated payments for tax and social security contributions directly from our payroll system to the relevant authorities.

Using our Payroll Services in India will streamline your operations by dealing with the following to make your staff operational:

  • Apply to India’s Income Tax Department for Form 49B to obtain a Tax Account Number (TAN), a 10-character alpha-digit number which sets up a tax account and enables companies to deduct tax at source for remitting to the tax authority.
  • The TAN can be applied for online via the National Securities Depository Limited (NSDL) website.
  • Submit the form in duplicate to the relevant state’s Tax Identification Number (TIN) Facilitator Center to obtain the 11-digit TIN for the company.
  • The TIN is issued by the Commercial Tax Department of the relevant state.
  • Apply to the Income Tax Department for a Permanent Account Number (PAN) for submitting taxes to the authorities and other financial transactions. Individuals also have a PAN number.
  • Obtain the Employee State Insurance (ESI) number from the Employee State Insurance Corporation (ESIC).
  • Obtain the Employees Provident Fund number from the Employees Provident Fund Organization.
  • Central and state labour laws require employers to maintain records of registrations and attendances to be available for inspection by the authorities.

International companies expanding their operations into India must set up a legal entity to hire staff and operate their payroll. The most popular choice is to form a private limited liability company as a subsidiary, which operates under the Companies Act (2013). The Act covers recruitment, terms and conditions of employment, management and administration, share capital and securities, accounts, directors, shareholders and meetings.

Registration procedures required by the Ministry of Corporate Affairs (MCA) for a foreign company establishing a subsidiary include:

  • Filing eForm FC-1 with the Registrar of Companies (ROC), signed electronically by authorised representatives of the foreign company
  • The directors of the foreign company do not need to register a Director Identification Number (DIN)
  • It is mandatory to register the Digital Signature Certificate (DSC) of the authorised representative of the foreign parent company

General requirements include:

  • Must apply and register the unique reserved name with the ROC.
  • The TIN is issued by the Commercial Tax Department of the relevant state.
  • Minimum of two shareholders and a maximum of 200, non-employees.
  • Board of directors with a minimum of two individuals, at least one of whom must be an Indian resident local director.
  • Directors of the subsidiary must have a DIN and digital signature before incorporation.
  • Articles of Association and Memorandum of Association.
  • The parent company has a minimum of 50% of the subsidiary’s share capital.
  • There is no mandatory minimum share capital.
  • Certificate of Incorporation issued by the ROC.
  • Additional documentation includes the IDs of the officers and directors, proof of registered office address, occupations of directors and shareholders, and Permanent Account Numbers (PAN) for both the company and the directors.

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