Is Japanese withholding tax due when contracting an engineer in India?

When all services are performed in India, the fee is generally not Japan-source income, so withholding is generally not required. State the place of performance in the contract and confirm with your tax adviser.

Why is the notice period 60-90 days?

Many Indian IT employment contracts require 60 or 90 days of notice. During that period candidates may receive counter-offers, so plan for a notice buyout, regular touchpoints, and a short interview process.

What is Gratuity and do I pay it?

Under the Payment of Gratuity Act, 1972, employees who complete five years of continuous service are entitled to gratuity. With an EOR it is accrued monthly (about 4.81% of basic salary) and passed through in the invoice.

Hiring Software Engineers in India: Guide to Skills, Salaries, Notice Period & EOR

Q: Can I hire Indian engineers who speak Japanese?

Fluent Japanese-speaking Indian software engineers are rare. Plan for English, text-first collaboration (specs, tickets, pull request reviews) and use translation tools on the Japanese side instead of relying on a bridge engineer.

India has long been seen as an outsourcing hub, but its engineering market is broad: from large IT-services firms to product companies working on AI, data platforms and distributed systems. For companies in Japan this guide helps you decide whether India fits your role, budget and management style, before you open a single job post.

Executive Summary: key numbers (2026)

TIMEZONE-3.5 h

Japan 13:00 = India 09:30; about 4.5h overlap

MID-LEVEL¥270–470k

Monthly base, 3–6 yrs, product-company hires

EOR ADD-ON~22%

EPF, gratuity accrual, insurance, plus platform fee

NOTICE PERIOD60–90 d

Typical for mid/senior candidates

Figures are indicative ranges and vary by city, company tier and exchange rate (reference: 1 INR ≈ 1.8 JPY). Verify before budgeting.

01. When India is a good fit

India tends to work best when the job needs depth rather than just capacity:

AI/ML, data engineering, large-scale backend and cloud infrastructure work.
Teams that already run specs, tickets and reviews in written English.
Roles where you want engineers to challenge the design, not only implement it.

Know the trade-off: implicit expectations rarely survive across cultures. Teams that can state the goal and acceptance criteria explicitly get the most out of Indian engineers.

Hiring for non-engineering roles (customer support, design, accounting) follows the same decision path; salary and Notice Period norms differ by role.

02. A 3.5-hour gap in practice

Japan (JST)	India (IST)	Typical use
09:00–12:00	05:30–08:30	Japan side: focus work, review pull requests submitted overnight
13:00–17:30	09:30–14:00	Shared core hours: stand-up, planning, design discussions
18:00–22:00	14:30–18:30	India side: uninterrupted implementation

Compared with Vietnam (-2h) or the Philippines (-1h) there is less overlap, but a natural split between async and sync work.

03. Salaries and total cost

Pay depends heavily on the type of employer. Large IT-services firms, growth-stage product companies and global tech centers can differ by 2–5x for similar titles. Japanese companies rarely win on cash against the top tier; they win on remote flexibility and real product ownership.

Level	Monthly base (INR)	≈ JPY	Contractor total	EOR total
Junior (1–3 yrs)	80k–140k	¥145–255k	¥150–260k	¥240–380k
Mid (3–6 yrs)	150k–260k	¥273–473k	¥280–480k	¥400–650k
Senior (6+ yrs)	270k–400k	¥491–728k	¥500–740k	¥670–960k
AI/ML specialist / Tech lead	380k–600k	¥691k–1.09M	¥700k–1.1M	¥920k–1.4M

What an EOR adds (about 20–24% of base):

Employees' Provident Fund (EPF), about 12% employer contribution
Gratuity accrual, about 4.81% (Payment of Gratuity Act, 1972; payable after 5 years of service)
Group health insurance, roughly 3–5%
EOR platform fee, commonly in the range of $400–600 per employee per month

04. India vs Vietnam vs the Philippines

Factor	🇮🇳 India	🇻🇳 Vietnam	🇵🇭 Philippines
Time difference from Japan	-3.5h	-2h	-1h
English in daily work	Widely used in IT	Varies; bridge engineers common	Strong, conversational
Typical strengths	AI/ML, distributed systems, cloud	Web/mobile backends, dedicated lab teams	Frontend, QA, support, operations
Senior monthly range	¥450–650k	¥250–350k	¥220–320k
Watch out for	60–90 day notice periods	Tet bonus, job hopping	13th-month pay

Read the full country guides: Vietnam · Philippines.

05. Contractor vs EOR, IP and tax

Independent contractor

Fast to start and no statutory add-ons, but you carry misclassification risk if you direct the work like an employee, and benefits are the contractor's own matter.

Employer of Record (EOR)

A local entity (e.g. Deel) employs the person under Indian law. Better for long-term core hires; costs more.

Not sure which? Use the employment model decision flow. A common path is to start with one contractor and move proven people to EOR.

IP assignment

Without a written agreement, authorship can default to the creator. Include an explicit assignment of copyright and inventions to your company and a waiver or non-assertion of moral rights, in English. Have local counsel review.

Tax and legal rules change. Treat this section as orientation, not advice.

06. Notice periods and the hiring process

The most common failure is the accepted offer that never starts: candidates serve 60–90 days' notice and may receive counter-offers.

Define the role, English-working expectations and acceptance criteria.
Choose Contractor or EOR (see above).
Source via LinkedIn, Wellfound, Instahyre or Cutshort.
Assess with a realistic pull request review or design discussion, not only puzzles.
Make the offer quickly (1–2 weeks from application) and ask about notice and a possible buyout.
Stay in touch weekly during the notice period.
Sign IP assignment, set up payroll/EOR and payments, then onboard with CI guardrails.

07. Managing quality and speed

Resourceful, improvise-to-solve habits ("jugaad") are a strength for prototypes, but can leave tests and documentation behind. Put guardrails in the pipeline: linters, required tests before merge, written acceptance criteria, and regular sharing of product goals and user feedback.

FAQ

Can I hire Indian engineers who speak Japanese?

They are rare. Plan for English, text-first collaboration and use translation tools on your side.

Is Japanese withholding tax due for a contractor in India?

Generally not, when all work is performed in India. State the place of performance in the contract and confirm with a tax adviser.

How should I provide laptops?

Avoid shipping from Japan because of import duties. Offer an equipment allowance or use an EOR's local equipment service.

Which currency do I pay in?

EOR payroll is in INR. Contractors are paid in INR or USD; a low-spread transfer service such as Wise Business can reduce FX cost.

Next steps

Choose a contract model →Contractor vs EOR vs subsidiary. Compare EOR platforms →Deel, Remote, Multiplier. Compare payment costs →Wise Business vs bank wire.

Hiring Software Engineers in India Is India the right market, what does it really cost, and how do you contract and onboard? A know → compare → decide guide.