Hey folks! Anyone working in employer-of-record setup with non-Indian startup? What are the taxation rules for such setup (same as employee of an Indian company?). Is there a better alternative to such setup?

I’m the legal head for an EOR in Germany. I would love to answer it, but I don’t understand the question.

Perfect. So, I have an offer from a startup in Berlin. They mentioned that they will contract through EOR setup. They might be even open to other alternatives if other alternatives are beneficial to me. So, just wanted to know how EOR setup works. Is it same as being an employee of an Indian company in terms of taxation, pf, medical insurance etc?

Typically few companies take care of them for you. They typically charge you around 300$/month https://pilot.co/pricing https://remote.com/pricing https://www.usemultiplier.com/pricing https://www.letsdeel.com/pricing

@rough-application-24965 Thanks for sharing the companies taking care of this. I wanted to hear the experience from someone who is already contracted through EOR.

It also depends if EOR is treating you as - an employee you will be paid salary, you will have insurance, form16 will be provided at the end of the year etc, taxation is straight forward. - or contractor they will deduct ~10% TDS and pay you as contractor, you have to manage your own insurance, taxation, GST etc, here you can look at option of 44ADA if feasible

Wow so much of wrong ideas about EOR! @orange-mouse-66795 in the EOR step up, you’ll be the indian company’s employee for all purposes but on an assignment for the German company. Nobody will charge you money - dunno why that was mentioned. Your German company will pay the fee of the EOR and you’ll reap the benefits. You’ll be on Indian payroll, Indian taxes would be applied and Indian law is applicable to you.

@better-telephone-38720 I understand by definition EOR are proper employer but many EOR are just an entity who takes responsibility of paying employees and handling local HR operations. I am on the rolls of once such employer, I have an employee contract with them but I am being paid as a contractor and not salary.

@quaint-farmer-12353 I don’t understand. EOR’s don’t handle contractors. You would with a company that does EOR and contractors management

@quaint-farmer-12353 In your case, is there a difference in tax benefits being paid as a contractor?

Contractors could have tax benefit. GST exemption limits and also Lower slab.

Adding on the list: Velocity Global https://velocityglobal.com/

I too was seeking information about EOR and this is very helpful. One perhaps naive question: Can EOR companies intervene in how much I get paid? If the company hiring is ok to pay me a US equivalent salary, will the EOR step in and say "no, you can only pay him by Indian standards" or something like that?

@early-beard-47173 Did not happen with me. This must be rare.

@early-beard-47173 - no EOR companies won't do that and it is not a legal requirement. Infact, they will be happier, the more you earn, the more they earn 🙂