You can agree an India EOR salary in rupees or in your company’s invoice
currency, one of USD, EUR, GBP, AUD, CAD, SGD, AED, CHF or NZD. The employee is
still paid in Indian rupees, because Indian law allows nothing else, so the
agreed figure is converted at a fixed rate that Omnivoo reviews every quarter.
The hire form only offers those two, because you are billed in your invoice
currency and any third currency would add a second conversion. If you are
invoiced in rupees, the salary is entered in rupees and there is nothing to pick.
Each currency has its own rate. Picking the currency on the hire form shows the
rate it converts at and the rupee CTC it produces, before you commit to it.
Why the rate is fixed
Section 15 of the Code on Wages 2019 requires wages to be paid in current coin,
currency notes, cheque or bank credit. In practice that means rupees.
Converting at the live market rate every month would change the employee’s rupee
salary every payroll run, and every statutory figure moves with it: Provident
Fund, ESI, Professional Tax, the TDS projection, the gratuity base and Form 16
are all rupee amounts. The employee’s CTC would never match the figure on their
offer letter.
So the rate is fixed once, at hire. The rupee CTC that comes out of it is what
appears on the offer letter, on every payslip and in every filing.
What the employee sees
The offer letter states the rupee CTC as the salary, with the agreed figure and
the conversion rate alongside it as how that number was reached.
On their profile, the employee sees:
- what was agreed, in the currency it was agreed in
- what they are paid each month, in rupees
- the conversion rate
- how much is currently held for them, waiting for the next review
- an activity list showing every month the rate moved, what it was paid at
against the market rate, and every top-up already paid
Nothing about the balance is hidden. The employee can check the total against
the months behind it rather than taking the figure on trust.
The quarterly top-up
Each quarter Omnivoo compares the fixed rate against the rate at which rupees
were actually bought that quarter.
Where the market rate has moved above the fixed rate, the difference is paid
to the employee as a bonus on the next payroll run. It appears as its own line on
the payslip.
Where the market rate has moved below it, nothing is deducted. The employee
keeps their full rupee salary for that month. The shortfall is carried and offset
against the next quarter where the rate moves the other way.
The rate and the top-up are reviewed each quarter and may be revised. They are
not a fixed entitlement.
What the employer is billed
The employer’s invoice carries the agreed figure for these employees, so the
monthly cost does not move with the market. A payroll run that mixes rupee-agreed
employees with employees agreed in other currencies shows a separate line and a
separate subtotal for each currency.
An employee who joins or leaves part-way through a month is billed the agreed
figure for the days they worked. Joining on 20 April, for example, bills 11 of
April’s 30 days.
The top-up itself is not billed again. It is paid out of the difference already
sent in earlier months.
Bonuses, equipment and health insurance
Bonuses, equipment and health insurance are entered and paid in rupees, whichever
currency the salary was agreed in. Equipment is bought in India. They are
converted to your invoice currency at the live rate on each invoice, so unlike
the salary they move with the rupee.
The hire form’s cost breakdown shows the two parts separately. For a salary
agreed in euros, Billed in EUR at the fixed rate holds the salary and its
statutory costs, and Billed in INR at the live rate holds bonuses, equipment
and health insurance.
Changing the rate
Omnivoo reviews the rate every quarter and can change it at any time. A change
applies to new hires straight away. An existing employee’s rate is fixed at what
their offer letter stated, so changing it is a salary revision with a new letter,
never a silent change to their pay. 