Convert your Freelancers to PEO Before April 2022
                     Convert your Freelancers to PEO Before April
2022
1.Convert your Freelancers to PEO Before April 
2022
Contractors and freelancers have become a common part 
of a business’s remote work strategy. And while 
they are useful in their respective style of working, this 
model of consistently delegating remote work might 
actually be harmful for both you and the freelancer. The 
Indian financial year is quickly drawing to a close, and we 
are here today to persuade you to convert your freelancers
to PEO before April 2022.
2. Benefits of turning freelancers to PEO for the 
Employer
1. The Surety of Compliance
Maintaining total compliance with the scope and model of 
working is solely your responsibility. It is your company 
that needs to be compliant. This includes proper 
documentation and regulatory transparency. However, 
freelancers aren’t technically your employees and they 
maintain their own ethics, documentation, and code of 
conduct.
This risk is yours to bear if you choose to trust that your 
freelancers in India are in proper local compliance. But with
the PEO model of remote work, you enjoy total control over
employee compliance, as your PEO partner in 
India handles it on your behalf with full transparency. 
2. The Reduced Threat of PE (Permanent Establishment)
Technically you cannot hire direct employees in India 
without registering an entity here. The Permanent 
Establishment risk comes into picture when a local tax 
authority (in this case, the Indian Tax Authority) decides 
that your business has a stable and operational entity in 
India and therefore you are liable for corporate taxes in 
India.
If through your freelancers, you are earning revenue in 
India (for example you hire a marketing freelancer / 
contractor in India to market your services in India), the tax
authority here can deem your business to have a 
permanent establishment in India.
With the PEO model of remote work, you reduce this risk 
considerably. 
3. Disbursing Employee Benefits
If your HR policies have been designed to offer certain 
employee benefits like travel allowances, insurance 
coverage etc. you can bring your freelancers also into HR 
compliance by turning them into PEO employees.
With the PEO model, you can work with your PEO partner in
India to disburse all the employee benefits which your 
company offers as a policy.
4. Protecting your Intellectual Property
Freelancers are not bound by any law to turn down work 
from your competitors. You can tighten the screws a little 
with rigid contracts but there’s always the risk that upon 
delivering your work, the freelancer goes to work with a 
rival organization.
This risk of IP vanishes by converting your freelancers to 
PEO because the resources are now in your sole 
employment and they cannot accept work simultaneously 
with a competitor.
3. Benefits of the PEO model for Freelancers / 
Contractors
1. Availing Employee Benefits
As freelancers, resources are always dependent on 
themselves to create ideal working conditions, provide for 
internet and other resources, and pay for commuting if 
they have an office environment. As an employee, though, 
they can get these facilities as part of the employee 
benefits, thereby saving costs. They may also benefit from 
insurance coverage and provident funds.
2. The Surety of Taxation
Freelancers or contractors are always in a tricky spot to 
show their incomes from the work they do. There are no 
fixed income heads and neither is the pay steady. By 
becoming dedicated employees, they can rest assured that
another organization (the PEO organization, not their 
employer) will handle all the taxation overheads.
3. Structured Growth
Freelancers have to be very enterprising individuals in 
order to keep getting work. They have to struggle to get 
word of mouth by referrals etc. They also have to work on 
several threads at once…
All of these pains are gone when the resource becomes a 
PEO employee. This is because they’ve now stepped into a 
structured growth model with a tangible path to better 
remuneration and challenges.
4. Ease of Securing Loans
As we discussed before, pay is not steady for a freelancer. 
We’re not saying it always declines. Instead, it 
rises and declines depending on the continuous work. Well,
banks don’t look upon such shaky income with a favourable
eye. This causes problems with their rating when the time 
comes to secure a loan.
By becoming a dedicated employee, your PEO partner in 
India ensures that the resource gets an Indian Employment
Letter. This boosts their chances of securing a loan along 
with a steady salary month on month, year on year.
4. Why is now the right time to convert your 
freelancers to PEO?
The Indian Financial Year as you know runs from April to 
March. If you convert your freelancers to PEO model before
the close of the current FY 21-22, your newly converted 
PEO employees in India will begin their next financial years 
with a clean slate. The new working model has 
huge  taxation benefits    fo r both you and your employees 
in India. 
You will also rid yourself of certain risks with this model. 
For instance, your organizational accounting policies can 
govern the salary heads while disbursing salaries. With the 
freelancing / contracting approach, there was only the one 
pre-decided amount to be paid for the work done and 
delivered.
Also, with a PEO employee, you can dictate the 
transparency levels. Otherwise, the onus of maintaining 
complete transparency was with the freelancer, taking 
tremendous control out of your hands.
You still have several days before April 2022. Now you 
have the resources to make an informed decision so 
consider converting your freelancers to PEO before April 
2022 earnestly.
5. Your PEO Partner in India
If you are sold on the idea that you should rather handle 
the PEO model of remote work than freelancing / 
contracting, the next step would be to find the 
right Professional Employer Organization (PEO) in 
India.
Our strength as a PEO agency is speedy solutioning with 
the perfect local compliance. Given the slight time crunch 
till the FY lasts, you need someone who can quickly deploy 
the PEO model but with the due local compliance in India.
If you need more information about our PEO services, or 
the employer responsibilities we undertake, reach out to 
 us   and we will revert back in a jiffy.