Total Cost Estimate: Setting Up an Indian Team vs Local Hiring

Posted on June 19, 2025 by Admin

In today’s globalized business world, companies are constantly evaluating cost-effective ways to build high-quality teams. One question that often arises is: “Should we hire talent locally or explore offshore hiring, particularly in India?”

This blog breaks down the cost comparison between hiring locally (e.g., in the US or Europe) and setting up an Indian team using an Employer on Record (EOR) service model.


Local Hiring – What Does It Cost?


Let’s say you're hiring a PHP Developer with 5 years of experience in the U.S.:


Cost Head Approximate Monthly Cost (USD)


  • Gross Salary $8,000 – $10,000
  • Benefits (health, dental, 401k) $1,200 – $2,000
  • Taxes & Legal Compliance $800 – $1,000
  • Workspace/IT Setup $300 – $500
  • Laptop (one-time) $850 – $1,000
  • Recruitment Cost (1-time) $3,000 – $5,000

Total Monthly Cost when hired locally: $10,500 – $13,500

Annual Cost when hired locally: Easily exceeds $130,000


Hiring via Indian EOR – A Transparent, Scalable Model


Now let’s compare this with hiring the same developer through an EOR service provider in India:


Cost Head Approximate Monthly Cost (USD)


  • Salary $8,00 – $12,000 (Labor Law Compliance - Included)
  • Monthly EOR Fees per employee – $499
  • Workspace/IT Setup $100 – $150 (Saved if allowed WfH)
  • Laptop (one time) - $700 - $900
  • Hiring, Background Checks & Compliance Included in EOR Fees
  • Exit & Legal Support Included in EOR Fees

Total Monthly Cost when hired through EOR: $1,400 – $1,800
Annual Cost when hired through EOR: $16,800 – $21,600

One-time Setup Cost (Laptop + IT) $800 – $1,050

Also note you start paying the EOR fees only after you onboard at least one employee for your team. It is 100% risk-free.


Key Advantages:


  • No need to establish a legal entity in India
  • Transparent pricing with no hidden fees
  • Full control over salary negotiations and hiring process
  • Built-in compliance, payroll, and legal protection


Why Companies are Choosing Indian EOR Services


1. Access to a Broader Talent Pool


You’re not limited to a predefined bench. EOR providers help you find talent that meets your exact requirements, from scratch.


2. End-to-End Operational Management


From sourcing and onboarding to payroll, IT provisioning, and compliance – the EOR handles it all.


3. Fixed and Predictable Costs


No hourly billing or surprise costs. You pay a flat monthly fee for complete service.


4. IP and Legal Protection


EORs act as your legal entity in India, ensuring full compliance and safeguarding your intellectual property.


5. Scalable and Low-Risk Hiring


If your needs change, the EOR ensures smooth transitions, including exit management and legal support.


Comparative Overview: Local Hiring vs Indian EOR Model


The following table highlights key decision factors when comparing traditional local hiring with the Indian EOR (Employer of Record) model:


Criteria Local Hiring Indian Team via EOR


Cost Efficiency: High total cost, Significant cost savings

Legal & Compliance Risk: Higher exposure to regulatory complexities, handled by EOR; lower risk

Operational Control Full control Full control retained

Transparency: Transparent but internally managed. High transparency through structured EOR processes


Looking to Hire in India Without a Local Entity?


We assist global companies in hiring remote employees in India, without the administrative burden of setting up a local office.

Whether you're a startup seeking agility or an enterprise scaling a global workforce, our EOR services streamline recruitment, payroll, compliance, and infrastructure—all at a fixed, transparent rate.

Let’s discuss how we can help you build your team in India efficiently and compliantly.

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