§ 1
Branch payroll and seconded staff
Branch employees are on the Indian payroll with the same obligations as any Indian employer: TDS on salary, provident fund, employee insurance where wages are within the limit, professional tax and compliance with the labour codes and the state shops and establishments law.
Secondees from the head office often continue on the home payroll. Their salary is still taxable in India for the period they work here, so the branch must account for it, withhold tax and consider whether the head office recharge for the secondee raises questions of permanent establishment or GST.
§ 2
The law that applies
| Income-tax Act, 2025 | TDS on salaries including home-country pay of secondees. |
|---|---|
| Labour codes and state laws | PF, ESI, gratuity, wages and establishment registration. |
§ 3
Issues and how we solve them
The problems that most often hold up or complicate this work, and how we deal with each.
Issue 1
Secondees are paid only abroad and not on the Indian payroll.
Our approach
We set up a shadow payroll that captures home-country pay, computes Indian tax and deposits it monthly.
Issue 2
Head office recharges for secondees attract GST questions.
Our approach
We review the secondment arrangement and determine whether GST under reverse charge applies to the recharge.
§ 4
Process and timeline
- 1
Set-up
Before first hireEmployer registrations and payroll calendar.
- 2
Monthly
MonthlyPayroll, shadow payroll for secondees, statutory payments.
- 3
Annual
AnnuallyTax certificates and annual returns.
§ 5
Our scope of work
Included
- Employer registrations
- Monthly payroll
- Shadow payroll for secondees
- TDS, PF, ESI and professional tax
- Annual certificates
§ 6
Questions
Can a branch office employ staff in India?
Yes. The branch employs staff on behalf of the foreign company and must register and comply as an employer under Indian law.
Is a secondee's home salary taxable in India?
Salary for work performed in India is generally taxable in India, regardless of where it is paid, subject to treaty relief in limited short-stay cases.
Prepared by CA Utsav Dogra, Chartered Accountant, ICAI M. No. 542375, SU and Company · Last reviewed 4 November 2026. General information only, based on the law as it stood on that date; it is not advice for any particular case.