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).

What is an Employer of Record?

An Employer of Record (EOR) is a third-party company that officially employs a worker on behalf of another company. The EOR acts as your legal employer, handling payroll, taxes, benefits, and compliance with local labor laws, while your company manages your day-to-day work. This makes it easy for the company to hire you without setting up a local entity in India.

An EOR may also take care of currency conversion and deposit INR directly into your bank account.

Independent Contractor

When you’re an independent contractor, you’re hired directly by the company under a contract. In this case, you are technically self-employed and essentially running your own small business, even if it’s just you. You’ll be paid in USD, and it’s your responsibility to handle currency conversion and compliance with Indian laws.

How EOR Payments Work

With an EOR, things are straightforward. For example, if you sign your contract on Deel:

The company pays Deel.

Deel pays you.

Deel handles taxes, local compliance, and other obligations.

You’ll also need to submit a W-8BEN form, which shows the IRS that you are not subject to US income tax.

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.

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.

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/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).

Accepting Payments from a US Company

With an EOR

The company pays Deel (or another EOR). Deel deposits the money into your bank account, handles compliance, and generates FIRA.

As an Independent Contractor

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.

Alternatively, you can use international multicurrency platforms like Infinity, Skydo, or Wise. For example, I use Infinity and:

  • 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.

Final Notes

This is the general process for working at a US startup while based in India and getting paid in USD. Always:

Keep invoices and FIRA records.

Track all payments and contracts.

Consult a Chartered Accountant before finalizing your setup.