In India, This Employee Negotiation May Be Unfamiliar to U.S. Businesses

India, by most measures, is a business-friendly country. But that doesn’t mean it’s easy to set up employees there. In fact, there is one aspect of an employee’s onboarding process that is both critical and utterly difficult for U.S.-based human resources. It is known as the Cost to Company, or CTC. Ankit Balani, India Country Manager at Globalization Partners, explains why this contractual provision is so challenging to negotiate.

For starters, base salary might only make up about 40 percent of the total CTC. The balance consists of a variety of allowances including not typically seen in U.S. employment. These include house rent allowances, medical allowances, travel allowances, and vehicle allowances.

This is where the Global Professional Employer Organization model can help.

Globalization Partners helps companies expand internationally without having to set up a subsidiary in country. Globalization Partners can help determine the most tax-efficient way to structure a CTC, while also managing the tax exposure of the client.