MigRizo TeamIn this guide6 sections
Founders usually start with one number: the salary. It is the biggest line on the bill, but it is rarely the whole bill. When you hire a software engineer in India from abroad, what you actually pay depends on how you engage them, what Indian law adds on top of pay, and how long the role stays open while you search.
This guide breaks the cost into the lines that really land on your books, so you can compare every option on the same basis and plan a hire without surprises.
The Five Lines That Make Up the Real Cost
Whichever route you choose, the total is built from the same five parts. Some routes remove a line, others add one.
Pay
What the person receives. For engineers joining global startups it is usually set against the international market for the role, not local averages.
Statutory Contributions
For employees, Indian law adds items such as Provident Fund (12% of basic wages, within the wage rules), gratuity and in some cases bonus and insurance.
The Provider Fee
An Employer of Record, payroll service or hiring platform charges for running the contract, payroll and compliance.
Equipment and Tools
A laptop, software licences and often a stipend for internet and a workspace at home.
The Cost of the Search
Every week a role stays open is work that does not ship, plus the hours your team spends screening applicants.
Contractor, EOR or Your Own Entity
There are three ways to engage someone in India. Each one changes which of the five lines you pay, and how much risk you carry.
| Contractor | Employer of Record | Your own Indian entity | |
|---|---|---|---|
| Up-front setup | None | None | Months: registrations, a resident director, bank and tax setup |
| Statutory contributions | No | Yes, run for you | Yes, you run them |
| Provider fee | Low or none | Monthly fee per person | Accounting, payroll and legal retainers |
| Classification risk | Highest | Low | Low |
| Best for | Short, clearly scoped projects | First hires and small teams | Large, long-term teams |
For most startups hiring their first one to ten people in India, an Employer of Record or a managed contractor model gives the best balance of cost and safety. If you are unsure which fits, our guide to contractor or employee in India walks through the tests, and how to hire in India without a company explains how an Employer of Record works.
What Drives Pay Up or Down
Pay for the same title can vary widely. These are the factors that move it most, so you can set a fair range before you post the role.
Seniority and Scope
Owning a system end to end, leading others or working with little direction commands more than delivering tickets.
Specialist Skills
AI and machine learning, security and platform engineering carry a premium. See how to hire AI engineers from India.
Shared Hours
Asking for a large overlap with a US team, which means evening work in India, is worth paying for.
Global Experience
People who have already worked with teams abroad need less ramp-up and usually ask for more.
Hidden Costs Most Startups Miss
- Currency and transfer fees. Paying in USD and converting to rupees can lose a few percent per payment if it is not set up well.
- Notice periods. Many experienced engineers in India serve 30 to 90 days' notice with their current employer. Plan the start date, and the gap, around it.
- Ramp-up time. Even strong hires need a few weeks to learn your codebase and way of working. Good onboarding shortens it.
- Time-zone friction. A great hire with no shared hours slows a team down. Agree the overlap before the offer.
- A bad hire. Replacing someone after three months costs far more than a careful first screen.
The cheapest hire is the one you do not have to make twice. Most of the real cost is decided in the first screen, not in the salary negotiation.
How to Keep the Cost Predictable
The easiest way to plan is to turn every line into one monthly figure per person before you make the offer. That is how MigRizo prices: posting, searching and interviewing are free, and when someone starts you pay one monthly rate, from USD 2,500, that covers their pay, the contract and the payment. If you have already found the person, it is USD 499 a month plus their pay. See pricing for the details.
Your Hiring Budget Checklist
Before you post the role
- Decide contractor or Employer of Record based on how the person will work, not only on price.
- Set a pay range for the scope and skills you need.
- Get the full monthly figure, including contributions and fees, in writing.
- Budget for equipment and plan around a notice period.
- Agree the shared working hours with your team.
- Use a structured, recorded interview so you can compare people fairly.
Common questions
How much does it cost to hire a software engineer in India?
The total is the person's pay plus statutory contributions if they are an employee, a provider fee, equipment, and the time spent hiring. Through MigRizo it is one monthly rate per person from USD 2,500, covering pay, contract, payment and compliance.
Is it cheaper to hire a contractor or use an Employer of Record in India?
A contractor is usually cheaper up front because there are no statutory contributions or EOR fee. An Employer of Record costs more each month but removes most of the misclassification and compliance risk, which is why startups often choose it for long-term team members.
Do I need an Indian company to hire an engineer in India?
No. You can engage someone as a contractor or employ them through an Employer of Record, which is the legal employer in India on your behalf. A company of your own only makes sense for a large, long-term team.
Key Takeaways
- 1
The real cost of a hire in India is five lines, not one: pay, statutory contributions, a provider fee, equipment and the time the seat stays empty.
- 2
A contractor agreement is the cheapest to start but carries the most classification risk. An Employer of Record costs more each month and removes most of it.
- 3
Your own Indian company only pays off for a large, long-term team, because of the setup time, local director and ongoing compliance.
- 4
The simplest way to plan is one monthly figure per person. With MigRizo that is from USD 2,500, covering pay, contract, payment and compliance.
Official sources
- Employees' Provident Fund Organisation (EPFO)
- Ministry of Labour and Employment, Government of India
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