Who is the employer during a secondment?

In a typical secondment the home employer (the seconder) remains the legal employer. The secondee stays on the seconder's payroll, with the seconder continuing salary, PF, ESI and tax withholding, while the host organisation directs and supervises the day-to-day work. This split, employment with the seconder and direction with the host, is the defining feature of a secondment. Drafting that blurs it, so the host looks like the real employer, invites employment claims and tax problems.

Does a secondment attract GST or tax issues in India?

It can. How the host reimburses the seconder matters: recovering bare cost looks different from recovering cost plus a margin, which looks more like a service. Indian tax authorities have, on some facts, treated the provision of seconded staff as a taxable supply of manpower, and a secondment involving a foreign seconder can raise permanent-establishment questions. Because the treatment turns on the detailed facts, structure the charge carefully and take tax advice. This is not tax advice.

How is a secondment different from a transfer of employment?

A secondment is temporary and keeps the secondee employed by the home employer, who can recall them; employment does not move. A transfer ends the relationship with the old employer and starts a new one with the new employer. Because the difference matters for continuity of service, benefits and tax, a secondment agreement should be time-bound and state clearly that ending it returns the secondee to the home employer rather than terminating their employment. This is general information, not legal advice.

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Secondment Agreement Template and How to Draft One (2026)

Adira EditorialLegal AI desk8 October 20266 min read

What a secondment agreement is, and when you need one A secondment agreement is a three-way arrangement under which an employee of one organisation (the home employer, or seconder) is temporarily assigned to work for another (the host, or secondee company), while usually remaining employed by the home employer. It is common within corporate groups (a parent lending staff to a subsidiary), between a vendor and a client on a long project, and between partner organisations sharing specialist talent. You need a secondment agreement whenever a person will work under another organisation's direction for a meaningful period but you do not want to end their existing employment. Without one, the lines blur fast: who directs the work, who pays, whose policies apply, who owns what the secondee creates, and who is on the hook if something goes wrong. In India there is an added reason to get this right, because tax authorities scrutinise secondments closely and the structure can create a permanent establishment or a taxable supply of manpower if it is drafted carelessly. Below is a secondment agreement template you can copy and adapt, followed by guidance on how to fill each field. This is general information, not legal advice. Secondments carry real employment and tax consequences, so have the final document reviewed by a lawyer and a tax adviser, especially for cross-border or group arrangements. ## Secondment agreement template ```

SECONDMENT AGREEMENT This Agreement is made on [DATE] Between: [HOME EMPLOYER NAME], of [ADDRESS] (the "Seconder"); [HOST NAME], of [ADDRESS] (the "Host"); and [EMPLOYEE NAME], of [ADDRESS] (the "Secondee"). 1. SECONDMENT AND DURATION The Seconder seconds the Secondee to the Host from [START DATE] to [END DATE], or until ended under clause 8. The Secondee remains an employee of the Seconder throughout. 2. ROLE AND LOCATION Role with the Host: [title and duties]. Reporting to: [host manager]. Location: [host site / remote]. Working hours: [as per host / as per home employment]. 3. CONTROL AND SUPERVISION During the secondment the Host directs and supervises the Secondee's day-to-day work and may set reasonable tasks within the agreed role. The Host does not become the Secondee's employer. The Seconder retains the employment relationship, including the right to recall. 4. REMUNERATION AND WHO PAYS The Seconder continues to pay the Secondee's salary, statutory contributions (PF/ESI) and benefits, and remains the employer of record for payroll and tax withholding. The Host reimburses the Seconder [the cost of the Secondee / cost plus [margin] / a stated charge] per [month], against invoice. [State whether GST applies on the charge.] 5. POLICIES AND CONDUCT The Secondee follows the Host's workplace, safety, IT and conduct policies on site, and the Seconder's employment policies otherwise. Disciplinary action as an employment matter remains with the Seconder; the Host may require the Secondee's removal from its site. 6. CONFIDENTIALITY The Secondee keeps the Host's confidential information confidential during and after the secondment, on the same terms as the Host's own staff. The Secondee's existing duties to the Seconder continue. 7. INTELLECTUAL PROPERTY Intellectual property created by the Secondee for the Host during the secondment, in the course of the seconded role, belongs to [the Host / the Seconder as agreed], and each party will do what is needed to give effect to that ownership. 8. ENDING THE SECONDMENT Either the Seconder or the Host may end the secondment on [N] notice. The Seconder may recall the Secondee [on notice / immediately for stated reasons]. On ending, the Secondee returns to the Seconder; this Agreement does not end the Secondee's employment with the Seconder. 9. LIABILITY AND INDEMNITY The Host is responsible for the Secondee's acts carried out under the Host's direction, and indemnifies the Seconder accordingly, subject to [agreed limits]. [Allocate liability for injury on the Host's site and for the Secondee's negligence.] 10. DATA AND TAX Each party complies with applicable data-protection law for the Secondee's personal data. The parties have considered the tax and, where relevant, permanent-establishment and GST consequences and have structured the charge in clause 4 accordingly. 11. GENERAL Governing law: India. Disputes: [arbitration seat / courts]. This Agreement is the entire agreement on the secondment. Signed for the Seconder: ________________ Date: ______ Signed for the Host: ____________________ Date: ______ Signed by the Secondee: _________________ Date: ______

Frequently asked questions

Who is the employer during a secondment?: In a typical secondment the home employer (the seconder) remains the legal employer. The secondee stays on the seconder's payroll, with the seconder continuing salary, PF, ESI and tax withholding, while the host organisation directs and supervises the day-to-day work. This split, employment with the seconder and direction with the host, is the defining feature of a secondment. Drafting that blurs it, so the host looks like the real employer, invites employment claims and tax problems.
Does a secondment attract GST or tax issues in India?: It can. How the host reimburses the seconder matters: recovering bare cost looks different from recovering cost plus a margin, which looks more like a service. Indian tax authorities have, on some facts, treated the provision of seconded staff as a taxable supply of manpower, and a secondment involving a foreign seconder can raise permanent-establishment questions. Because the treatment turns on the detailed facts, structure the charge carefully and take tax advice. This is not tax advice.
How is a secondment different from a transfer of employment?: A secondment is temporary and keeps the secondee employed by the home employer, who can recall them; employment does not move. A transfer ends the relationship with the old employer and starts a new one with the new employer. Because the difference matters for continuity of service, benefits and tax, a secondment agreement should be time-bound and state clearly that ending it returns the secondee to the home employer rather than terminating their employment. This is general information, not legal advice.

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Secondment Agreement Template and How to Draft One (2026)

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