Knowledge base
Offshore Hiring & EOR Glossary
Clear, sourced definitions of the offshore hiring, Employer of Record, global payroll, and compliance terms US companies encounter when building teams in India.
B
- Basic Salary
- Basic salary is the fixed core component of an employee's compensation in India, before allowances. It is the base on which several statutory contributions such as provident fund and gratuity are calculated, so its share of CTC affects both take-home pay and employer cost.
- Build-Operate-Transfer(BOT)
- A Build-Operate-Transfer arrangement has a partner build and run an offshore team, then transfer it to the client's own entity once it is established. It is a bridge between using a service provider and owning a captive centre.
C
- Captive Center
- A captive center is an offshore facility wholly owned and operated by the company it serves, rather than by a third-party vendor. It gives maximum control and integration but requires the company to set up and run its own legal entity, payroll, and compliance.
- Cost to Company(CTC)
- Cost to Company is the total annual amount an employer spends on an employee in India, including base salary, employer statutory contributions, benefits, and allowances. Because CTC includes employer costs the employee never receives as cash, in-hand (net) pay is meaningfully lower than CTC.
E
- Economic Reality Test
- The Economic Reality Test is the legal standard the IRS, US Department of Labor, and most state labor agencies use to determine whether a worker is truly an independent contractor or legally an employee - based on the totality of the working relationship, not the label in the contract.
- Employees' Provident Fund(EPF)
- The Employees' Provident Fund is India's mandatory retirement savings scheme, now operating under the EPF Scheme, 2026 as part of the Code on Social Security, 2020 consolidation (superseding the earlier EPF Act, 1952 framework). Employees and employers each contribute 12% of basic wages; a portion of the employer share funds the Employees' Pension Scheme. It is a core statutory cost of employing staff in India.
- Employees' State Insurance(ESI)
- Employees' State Insurance is India's contributory health and social-security scheme under the ESI Act, 1948, covering medical, sickness, and maternity benefits. It applies to employees earning up to a wage ceiling, with the employer contributing 3.25% and the employee 0.75% of gross wages.
- Employer of Record(EOR)
- An Employer of Record is a third-party organisation that legally employs staff on behalf of another company. The EOR handles payroll, tax, benefits, and statutory compliance in the worker's country, while the client directs the day-to-day work. It lets companies hire abroad without establishing their own local legal entity.
G
- Global Capability Center(GCC)
- A Global Capability Center (also called a Global In-house Center) is a company-owned offshore office that delivers technology, operations, or R&D for its parent organisation. Over 1,800 GCCs operate in India. Setting one up requires establishing a local entity, which an EOR model avoids.
- Gratuity
- Gratuity is a statutory lump-sum benefit paid to employees in India on exit after five or more years of continuous service, under the Payment of Gratuity Act, 1972. It is calculated as fifteen days' wages for each completed year of service.
I
- In-hand Salary
- In-hand (or take-home) salary is the amount an employee actually receives after deductions from gross pay — employee provident fund, professional tax, and income tax. It is lower than both gross salary and Cost to Company.
- India Labour Codes (2026)
- The India Labour Codes are four consolidated federal laws - the Code on Wages (2019), the Industrial Relations Code (2020), the Code on Social Security (2020), and the Occupational Safety, Health and Working Conditions Code (2020) - that replace 29 previously separate Central Labour Acts, effective 21 November 2025 with the central government targeting April 1, 2026 for full operational parity across states.
- Intellectual Property Assignment(IP assignment)
- IP assignment is the contractual transfer of ownership of work product — code, designs, inventions — from the person or entity that created it to the client. Compliant offshore employment structures ensure IP created by offshore staff vests cleanly with the client.
N
- Nearshore
- Nearshore refers to outsourcing to a country in a similar or adjacent time zone to the client, as opposed to offshore (a distant time zone). The trade-off is typically greater time-zone overlap nearshore versus a larger talent pool and lower cost in major offshore markets like India.
- Notice Period
- A notice period is the length of time an employee or employer must give before ending employment, set by the employment contract rather than a single statute. In India it commonly ranges from 15–30 days during probation to one to three months for confirmed and senior roles.
O
- Offshore Development Center(ODC)
- An Offshore Development Center is a dedicated team based in a lower-cost country that functions as an extension of the client's in-house engineering organisation, typically with its own workspace, tooling, and processes aligned to the client.
- Onboarding
- Onboarding is the process of integrating a new hire into an organisation — provisioning, orientation, compliance paperwork, and initial ramp-up. In offshore engagements, structured onboarding materially affects time-to-productivity and early retention.
- Outsourcing
- Outsourcing means engaging a third-party company to perform work or deliver a service, rather than doing it with in-house staff. It describes who does the work (a vendor), not where the work happens - which is why outsourcing is often confused with offshoring or nearshoring, terms that describe geography rather than vendor structure.
P
- Professional Employer Organization(PEO)
- A PEO enters a co-employment relationship with a client company, sharing employer responsibilities such as payroll and benefits. Unlike an EOR, a PEO typically requires the client to already have its own legal entity in the country, and the client remains a co-employer of record.
- Professional Tax
- Professional tax is a small tax on income from employment levied by individual Indian state governments, deducted from salary by the employer. It is constitutionally capped at ₹2,500 per year and varies by state; some states and union territories do not levy it.
S
- Salary Benchmarking
- Salary benchmarking is the process of establishing what the market pays for specific roles in each geography, and using that data to set compensation that is competitive for hiring and retention. Without regular benchmarking, compensation drifts - companies over-pay in some markets and under-pay in others.
- Staff Augmentation
- Staff augmentation is an outsourcing model where external professionals are added to a client's existing team on a temporary or ongoing basis, working under the client's direction. It differs from project outsourcing, where a vendor owns the deliverable rather than supplying individuals.
- Statutory Compliance
- Statutory compliance is adherence to the employment laws and mandatory contributions of the country where staff are employed — in India, obligations such as EPF, ESI, gratuity, professional tax, and labour-law filings. Non-compliance carries financial and legal penalties for the employer of record.
T
- Tax Deducted at Source(TDS)
- Tax Deducted at Source is India's mechanism for collecting income tax at the point of payment. Employers deduct estimated income tax from employee salaries each month and remit it to the government, reconciling against the employee's annual tax liability.
- Time Zone Overlap
- Time zone overlap is the number of hours in a working day when a distributed team and its client are both online. Standard 9-to-5 schedules give India only one to two hours of natural overlap with US Eastern time, a gap of 9.5 to 10.5 hours; shifting India's hours later, for example to 12 PM-9 PM IST, extends live overlap to roughly two-and-a-half to four hours.
- Total Cost of Employment(TCE)
- Total Cost of Employment (TCE) is an indexed measure of the full all-in cost of employing a specific role at a specific seniority level in a specific market - used to compare labor costs across geographies on a like-for-like basis, typically indexed against a baseline market (e.g. San Francisco = 100).
- Total Cost of Workforce(TCOW)
- Total Cost of Workforce (TCOW) is the comprehensive measurement of all costs associated with employing, managing, and transitioning workers, across all employment types (full-time, contractor, EOR) and all geographies - going beyond payroll to include the full operational infrastructure required to field a workforce.
Get started
Your next great hire is in India.
We'll build the team around them.
Talk to a Remvix specialist about your roles, timeline, and budget. Get a tailored shortlist in 7 days — no commitment, no agency lock-in.
✓ Shortlist in 7 days✓ No India entity needed✓ NDA + IP assignment✓ Month-to-month