India
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Introduction
General Overview & Economic Facts
- India, officially known as the Republic of India (Bhārat Gaṇarājya), is a country in South Asia
- India has been a federal republic since 1950 and is governed by a democratic parliamentary system
- It is a pluralistic, multilingual and multi-ethnic society. It has become a fast-growing major economy, ranking 5th globally by nominal GDP (2021) and 3rd by PPP (2022). It has become a hub for information technology services
Why Employ In India?
- The main exports from India are petroleum, gems and pharmaceuticals
- Population demographic- 17.51% of the population is between the ages of 15 and 24 years, with 41.56% of the population being between the ages of 25 and 54. India has a fairly youthful population, making it a favourable country to employ young, energetic employees.
Overview Of The Labour Law
- The law relating to employment in India is primarily known as ‘Industrial Law.’ Under the Constitution of India, labour is regulated by both the Central and the respective State Government, with the residual law-making powers vesting with the Centre
- This has resulted in a number of central and state laws related to wages, employment, industrial relations, social security, etc. being enacted to protect the interests of employees and to increase employment opportunities
Fun Country Facts
- Rajasthan has a Temple of Rats
- The game ‘Snakes and Ladders’ originated in India
- During World War II, the Taj Mahal was disguised as a bamboo stockpile to protect it
Why Use Playroll Services For India?
- Employing in India requires companies to have their own legal entity in the country as well as to manage payroll, employee benefits, taxes and legal compliance. This can get quite complicated, especially with the complexity of employment laws in India.
- With Playroll’s Employer of Record services, your team will be employed by our established legal entities in each country
- We will take care of payroll, employee benefits, taxes, legal compliance and provide ongoing employee support, so that you can focus on growing your business
Employer Contributions
These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.
Medical
No disability
Calculated on a maximum salary of INR 21,000.00. Employees earning above INR 21,000 per month should be enrolled in a Group Medical Cover scheme
3.25%
Not subject to a maximum salary
3.25%
Gratuity
4.81%
Payroll Tax
Applicable to professionals
Varies by state
Employee’s Provident Fund (EPF)
12.00%
Administration costs of EPF. Calculated on a maximum salary of INR 15,000.00
0.50%
Administration costs of EDLI
0.50%
Housing Fund
Optional
Component of the salary offered to employees who reside in rented accommodation
House rent allowance (HRA) is partially or fully exempt from taxes under Section 10(13A) of the Income Tax Act
HRA is fully taxable if the employee doesn’t live in rented accommodation.
Transport Allowance
Optional
Value is at the discretion of the employer
Employee Contributions
These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.
Medical (Called Employee's State Insurance in India)
No disability
Calculated on a maximum salary of INR 21,000.00.
0.75%
Disability
Not subject to a maximum salary
0.75%
Employee's Provident Fund (EPF)
Calculated on basic monthly earnings. Calculated on a maximum salary of INR 15,000.00
12.00%
Income Tax
Income bracket per annum
0.0 – 250,000.00
0.00%
250,001.00 – 500,000.00
5.00%
500,001.00 – 750,000.00
12,500 + 10% of total income exceeding 500,000
750,001.00 – 1,000,000.00
37,500 + 15% of total income exceeding 750,000
1,000,001.00 – 1,250,000.00
75,000 +20% of total income exceeding 1,000,000
1,250,001.00 – 1,500,000.00
125,000 +25% of total income exceeding 1,250,000.00
1,500,001.00 or more
187500 + 30% of total income exceeding 1,500,000
Employment Terms
General
Minimum Wage
- INR 178.00 per day
Working Hours
- Maximum of 48 hours per week and 9 hours per day
- Minimum 30-minute meal interval
- Typical working hours are 09h00/09h30 to 18h00 Monday to Friday
Overtime
- Maximum of 2 hours per day
Notice Period
- Minimum of 30 days
- 15 days during the probation period
Severance Pay
- 15 days’ pay for each full year of employment
Probation Period
- There is no statutory probation period
- Employees can expect a probation period of between 3 and 6 months, with a maximum probation period of 2 years
Public Holidays
Public holidays 2022
- January 13th – Lohri
- January 26th – Republic Day
- March 1st – Maha Shivaratri/Shivaratri
- March 18th – Holi
- March 18th – Dolyatra
- April 14th – Mahavir Jayanti
- April 15th – Good Friday
- May 3rd – Ramzan Id/Eid-ul-Fitar (Tentative Date)
- May 16th – Buddha Purnima/Vesak
- July 10th – Bakr Id/Eid ul-Adha (Tentative Date)
- August 9th – Muharram/Ashura (Tentative Date)
- August 15th – Independence Day
- August 19th – Janmashtami
- October 2nd – Mahatma Gandhi Jayanti
- October 5th – Dussehra
- October 9th –Milad un-Nabi/Id-e-Milad (Tentative Date)
- October 24th – Diwali/Deepavali
- November 8th – Guru Nanak Jayanti
- December 25th – Christmas
Leave
Paid Leave / Vacation Days
- Paid leave
- Paid by employer
- Aged 15 and younger- 20 days per year
- Aged 16 and older- 15 days per year
Sick Leave
- Paid leave
- Paid by Social Security
- For white collar workers, sick leave is determined by the employment agreement
- All other employees who are covered by Employee State Insurance are entitled to up to 91 days in any two consecutive 6-month period
Maternity Leave
- Paid leave
- Paid by the employer and Social Security
- 26 weeks per year
Paternity Leave
- Paid leave
- Paid by the employer
- There is no statutory obligation to provide paternity leave for private sector employees
- Public sector employees can expect 15 days of paternity leave
Family Responsibility Leave (Casual Leave)
- Minimum of 3 days per month, maximum of 6 days per year
Marriage Leave
- There is no statutory obligation to provide marriage leave
- Employees can expect 3 days per year