Sending Money to Your Employee in India
Complete guide to sending USD to your employee in India. How it works, what you need, and how Root makes it simple.
As an NRI living in the U.S., sending money to your employee in India—whether a domestic worker, caretaker, or personal assistant—is a way to honor financial commitments and support livelihoods back home. This guide walks you through the key steps, compliance requirements, and best practices for sending money to India securely and efficiently. You’ll learn what recipient details you need, how tax rules like TCS apply, and how to avoid delays. With the right preparation, your remittance can reach your employee smoothly and on time.
Many NRIs employ staff such as housekeepers, drivers, or caregivers in India and regularly transfer wages to support them. These payments are typically made monthly and reflect a long-term employer-employee or service-based relationship. Ensuring timely, accurate transfers helps maintain trust and financial stability for your employee.
What You Need to Know
Valid Bank Account Required
Your employee must have an active bank account in India—preferably an NRO or regular savings account. Root currently supports NRO and standard savings/current accounts; NRE support is coming soon. Avoid sending to dormant or inactive accounts.
Complete IFSC and Account Details
An accurate 11-digit IFSC code is essential to route the transfer correctly. Incorrect IFSC codes are a leading cause of failed or delayed transfers. Double-check the code using your employee’s bank branch name and location.
TCS Applies on Large Annual Remittances
If your total remittances under LRS exceed ₹7,00,000 (~$8,400) in a financial year (April–March), a 5% TCS will be collected by the remittance provider. This does not affect the employee directly but impacts the net amount sent. Factor this into large or recurring transfers.
Documentation for Compliance
While Root does not require employment proof for standard transfers, keeping a record of the service agreement or employment relationship helps for personal audit trails, especially for larger or frequent transactions that may attract reporting thresholds under FEMA.
How to Send — Step by Step
Gather Your Employee’s Bank Details
Collect your employee’s full name as per bank records, bank name, branch, account number, and 11-character IFSC code. Confirm these directly with your employee to avoid errors.
Pro tip: Use the bank’s official website or app to verify the IFSC code using branch location.
Add Recipient in the Root App
Log in to Root and select 'Add New Recipient.' Choose 'India' as destination and enter the employee’s full bank details. Select account type—NRO or savings—as applicable.
Pro tip: Label the recipient clearly, e.g., 'Driver - Mumbai,' to avoid confusion if you have multiple beneficiaries.
Enter Transfer Amount in USD
Choose how much you’d like to send in USD. Root displays the live INR equivalent using the interbank exchange rate. Review the amount carefully, especially if nearing ₹7,00,000 in annual transfers.
Pro tip: CHECK_LIVE
Review Fees and TCS Impact
Root offers zero fees and the interbank exchange rate. If your cumulative LRS remittances exceed ₹7,00,000 this financial year, a 5% TCS will be applied on the excess amount. This is collected upfront and reported to Indian tax authorities.
Pro tip: CHECK_LIVE
Confirm and Send
Review all details—especially the IFSC and account number. Confirm the transfer using your 2FA method. Once sent, you’ll receive a tracking reference and estimated delivery time.
Pro tip: Most transfers arrive in 1 business day.
Send Money to Your Employee in India
Zero fees, interbank rate. Simple and secure with Root.
Send with RootFrequently Asked Questions
Can I send my employee’s salary through Root?
Yes, you can send salary payments to your employee in India using Root. Ensure they have a valid Indian bank account (NRO or savings), and provide accurate name and IFSC details. Transfers typically arrive within one business day.
Does my employee need a PAN card for salary transfers?
While not always mandatory for smaller amounts, Indian banks may require a PAN card for transfers exceeding ₹50,000 per transaction or ₹200,000 monthly. Encourage your employee to link PAN to their account to avoid compliance issues.
How does TCS affect salary payments to my employee?
If your total remittances under LRS exceed ₹7,00,000 in a financial year, 5% TCS applies on the excess amount. This is collected at the time of transfer. For example, sending $1,000 (~₹84,000) when near the limit may trigger TCS on the incremental amount.
What happens if I enter the wrong IFSC code?
An incorrect IFSC code may cause the transfer to fail or be routed to the wrong bank or branch. Root validates bank details where possible, but always double-check the IFSC with your employee before sending.
Are there restrictions on how my employee uses the money?
Under FEMA, personal remittances for legitimate purposes like salary, gifts, or maintenance are permitted. Payments for prohibited activities like gambling or real estate speculation are not allowed.