Best Way to Receive Salary from a US Startup While Working Remotely from India
A complete guide to receiving salary from a US startup while working remotely from India. EOR vs contractor, taxes, GST, payment platforms, and which option to choose.
Kiran Johns
PM & engineer hacking growth on weekdays and side projects on weekends.
If you’re an Indian working remotely for a US company, you’re most likely either employed through an Employer of Record (EOR) like Deel or Rippling, or you’re working as an independent contractor. In either case, you’ll be paid in US Dollars (USD).
I have been working remotely for US startups as an independent contractor, and this post covers everything I wish someone had told me when I started. I will briefly cover EORs for context, but most of this post is based on my experience as a contractor.
EOR vs Independent Contractor
There are two ways to get paid. An Employer of Record (EOR) like Deel or Rippling acts as your legal employer in India, handling payroll, taxes, and compliance. The company pays the EOR, the EOR pays you. It is zero hassle but you lose control over conversion rates and the EOR fee eats into your compensation.
As an independent contractor, you are hired directly under a contract. You handle your own taxes, compliance, and payments. More work, but higher take-home pay and full control.
I work as a contractor, so the rest of this post is focused on that setup. If your company uses an EOR, most of the compliance side is handled for you and you do not need to worry about the sections below.
Working Remotely as an Independent Contractor
If you choose to work as an independent contractor, you’ll need to take care of your own taxes and compliance. Here’s a step-by-step breakdown.
1. Registering a Sole Proprietorship
A sole proprietorship in India is not a separate legal entity (it’s still “you”), but it allows you to operate under a business name and makes opening a business bank account easier.
You’ll likely need to register if your income exceeds ₹20 lakh/year, since exporting services to a foreign client requires you to file GST returns (exports of IT services are zero-rated).
Hiring a Chartered Accountant (CA) is highly recommended at this stage. They can help with registration, tax filings, and compliance. A good CA will save you more money than they cost.
You’ll also need to submit a W-8BEN form, which shows the IRS that you are not subject to US income tax.
2. Income Tax
As a self-employed professional providing IT services, your income can be taxed under the presumptive taxation scheme (Section 44ADA). Under this scheme, only 50% of your income is considered taxable. This is a significant benefit.
For example, if you earn ₹50 lakh in a year, only ₹25 lakh is treated as taxable income. You pay tax on that amount according to the applicable slab rates. No need to maintain detailed books of accounts.
Important: Section 44ADA applies only if your gross receipts do not exceed ₹75 lakh in a financial year (as of FY 2024-25). If you earn more, you will need to maintain proper books and get them audited.
Try the calculator below to see how much you would save as a contractor vs an employee.
Employee vs Contractor Tax Calculator
FY 2025-26 new tax regime. Section 44ADA for contractors.
| Employee | Contractor | |
|---|---|---|
| CTC | ₹30,00,000 | ₹30,00,000 |
| Exemption | ₹75,000 | ₹15,00,000 |
| Taxable income | ₹29,25,000 | ₹15,00,000 |
| Yearly tax | ₹4,75,800 | ₹1,09,200 |
| Yearly take-home | ₹25,24,200 | ₹28,90,800 |
| Monthly take-home | ₹2,10,350 | ₹2,40,900 |
Working as a contractor saves you ₹3,66,600 in taxes annually.
As a contractor at ₹30,00,000, you earn almost the same as an employee at ₹35,32,849.
3. GST Compliance
Since your services are exported, you don’t need to pay GST if you file a Letter of Undertaking (LUT). This allows you to treat exports as zero-rated without paying GST upfront and then claiming a refund.
However, you must still file:
- GSTR-1 – reports outward supplies (invoice details) monthly or quarterly.
- GSTR-3B – a self-declaration summarizing tax liability and input tax credits.
You’ll also need a Foreign Inward Remittance Advice (FIRA) from your bank. This proves you’ve legally received foreign currency in India. FIRA also includes a purpose code (usually P0802 for software or consulting exports).
4. Invoicing
Send a proper invoice to your US client every month. Include:
- Your name and business name
- Client’s name and address
- Invoice number and date
- Description of services
- Amount in USD
- Your bank details or payment platform info
- A note that the service is an export and GST is zero-rated under LUT
Keep all invoices organized. Your CA will need them at tax time.
Accepting Payments from a US Company
The company pays you directly in USD. You work with your bank to convert to INR. Your bank generates FIRA, though in some cases you may need to approve or collect it manually.
Many contractors report good experiences with HDFC, ICICI, and Federal Bank for handling USD payments.
Payment Platforms Compared
If you do not want to deal with your bank’s forex desk, there are platforms that handle everything for you.
| Platform | How it works | Fees | FIRA |
|---|---|---|---|
| Infinity | Opens a US checking account (JP Morgan), auto-converts to INR | Competitive rates, low fees | Auto-generated |
| Wise | Multi-currency account, you convert when you want | Transparent fees, mid-market rate | May need to request |
| Skydo | Similar to Infinity, built for Indian freelancers | Competitive rates | Auto-generated |
| Direct bank transfer | Company wires USD to your Indian bank | Bank’s forex rate + charges | Bank generates it |
I use Infinity and here is why:
- They open a US checking account for you with JP Morgan.
- The company pays this account in USD.
- Infinity automatically converts to INR, locks in competitive rates, and generates FIRA for each transaction.
The entire process is hands-off once it is set up.
Get your first transaction free on Infinity
If you sign up using my referral link, your first transaction is free. I use Infinity for all my USD payments and it has been solid.
Sign up for InfinityFrequently Asked Questions
Do I need GST registration if I earn less than ₹20 lakh? Technically no, but if you are exporting services and want to file LUT (to avoid paying GST upfront), you need to be GST registered. Most CAs recommend registering regardless.
Can I use Wise to receive my salary? Yes. Wise gives you a multi-currency account with local bank details in the US, UK, and EU. Your company can pay you as if you were a local. However, Wise is not always the cheapest option for large recurring transfers. Compare rates with Infinity or Skydo.
What is the DTAA benefit? India and the US have a Double Taxation Avoidance Agreement (DTAA). Since you file the W-8BEN form, the US does not withhold tax on your income. You only pay tax in India. This prevents you from being taxed twice on the same income.
Should I register as a sole proprietorship or an LLP? For most remote workers, a sole proprietorship is enough. An LLP makes sense if you have multiple clients, want limited liability protection, or plan to scale into an agency. The compliance cost for an LLP is higher.
Final Notes
This is the general process for working at a US startup while based in India and getting paid in USD. A few things to always keep in mind:
- Keep invoices and FIRA records for every transaction. You will need them for GST filings and tax returns.
- Track all payments and contracts in one place. A simple spreadsheet works.
- Consult a Chartered Accountant before finalizing your setup. Tax laws change, and a good CA stays on top of them so you do not have to.
- Set aside money for taxes. As a contractor, no one is deducting TDS for you. A good rule of thumb is to set aside 30% of your income for taxes.
If you found this useful, feel free to share it with someone who is figuring out the same thing.