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India 2022
Day Date Holiday Notes
Wednesday Jan-26 Republic Day
Friday Mar-18 Holi
Friday Apr-15 Good Friday
Tuesday May-3 Ramzan/Eid al-Fitr
Monday Aug-15 Independence Day
Friday Aug-19 Janmashtami Day
Sunday Oct-2 Gandhi Jayanthi
Wednesday Oct-5 Dussehra
Monday Oct-24 Diwali/Deepavali
Tuesday Nov-8 Guru Nanak Jayanti
Sunday Dec-25 Christmas Day
Countrypedia

India
Payroll and Benefits Guide

Last updated: Feb 27, 2022
Currency
Indian Rupee (INR)
Payroll Frequency
Monthly
Employer Taxes
16.75%

Papaya Offers Complete Payroll, PEO and Contractor Management Services For India

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Overview

Capital
New Delhi
Currency
Indian Rupee (INR)
Date Format
dd/mm/yyyy
Public holidays calendar

Contributions

Employer

Employer Payroll Contributions

12.00%
Employee’s Provident Fund (EPF) and Employee’s Pension Scheme (EPS) (Compulsory for employers with more than 20 employees & a maximum monthly salary of 15,000.00 INR)
4.75%
Employee’s State Insurance (ESI) (Compulsory for employers with more than 10 employees)
16.75% Total Employment Cost

Employer

Employer Payroll Contributions

12.00%
Employee’s Provident Fund (EPF) and Employee’s Pension Scheme (EPS) (Compulsory for employers with more than 20 employees & a maximum monthly salary of 15,000.00 INR)
1.75%
Employee's State Insurance (ESI)
4.00%
Health and Education Cess (levied at the rate of 4.00% on the amount of income-tax plus surcharge)
17.75% Total Employee Cost

Employee

Employee Income Tax

0.00%
0.00 INR - 2,50,000.00 INR
5.00%
2,50,001.00 INR - 5,00,000.00 INR
10.00%
5,00,001.00 INR – 7,50,000.00 INR
15.00%
7,50,001.00 INR – 10,00,000 INR
20.00%
10,00,001 INR – 12,50,000 INR
25.00%
12,50,001 INR - 15,00,000 INR
30.00%
Over 15,00,001 INR
Employer Taxes
3 HIGHEST
3 LOWEST
Mexico
Russia
South Korea
India
Georgia
Lithuania
Macedonia
43.72%
38.5%
34.93%
16.75%
2%
1.77%
0%
Employee taxes
3 HIGHEST
3 LOWEST
Romania
Germany
Netherlands
India
Belarus
Ukraine
Cambodia
35%
31.05%
30.35%
17.75%
1%
0.6%
0%

Minimum Wage

General

The national minimum wage in India is fixed by the respective state governments. It uses a complex method of setting minimum wages that defines thousands of different jobs for unskilled workers and over 400 categories of employment, with a minimum daily wage for each type of job.

Payroll

Payroll Cycle

The payroll cycle in India is generally monthly, with wages paid on or after the 28th of each month.

13th Salary

The 13th salary in India is usually mandatory, paid as a percentage of the annual salary and within eight months of the end of the financial year.

Working Hours

General

The standard workweek is 48 hours, 9 hours per day.

Overtime

All work in excess of the standard 48 hours a week is to be paid as overtime and is regulated by employment contracts, generally calculated at 200% of the regular pay rate.

Leave

Paid Time Off

The regulations regarding paid leave in India are set in the employment contract as a minimum of 15 days paid holiday a year (following completion of 240 days of employment).  However, it is common practice for additional leave days to be included in the contract, together with rules on how many days can be carried over to the following year.

All paid time off requests must be applied for at least 15 days prior to the start of the leave and approved by the employer, works committee, and the manager to ensure continuity of work.

Vacation days
Public holidays
3 HIGHEST
3 LOWEST
Azerbaijan
United Arab Emirates
Brazil
India
Mexico
Malaysia
Federal
21
24
45
30
15
45
30
13
43
15
3
18
6
8
14
8
6
14
10
10

Sick Days

Employees who have been continuously employed for at least 3 months are entitled to 15 days paid sick leave per year and must provide a medical certificate within 48 hours of the first day of sickness.

The sick pay is calculated at 70% of the regular daily salary rate.

Maternity Leave

Eligible expectant mothers are entitled to 100% of their regular salary rate for 26 weeks for their first two children, decreasing to 12 weeks for any subsequent children.

To be eligible, the employee must have been employed for at least 80 days of the preceding 12 months before the expected due date.

PAID MATERNITY LEAVE (DAYS)
413
410
365
182
40
30
0
Norway
Bulgaria
Serbia
India
Malawi
Tunisia
Federal
3 HIGHEST
3 LOWEST

Paternity Leave

While government employees are entitled to 15 days of paternity leave, there are no statutory paternity leave laws for the private sector.

Parental Leave

There are no statutory laws on parental leave.

Other Leave

Each state generally sets other leave entitlements and policies.

Termination

Termination Process

The termination process is standard in India, with notice periods required unless an employer can provide sufficient cause for dismissal without notice due to misconduct, disobedience, lack of skill, neglect of duties, or absence without permission.

Notice Period

The notice period required is at least 30 days.

Severance Pay

Severance pay in India depends on several factors, including the terms of the employment contract, the position and role of the employee, and the reason for termination.

Probation Period

Probation periods in India generally differ based on the employee’s role and their seniority, being between 3and 6 months.

VISA

VISA

There are two main types of visas in India: a business visa (visits to India of up to 6 months to conduct business for a non-Indian company) and an employment visa.

An employment visa is required for foreigners going to India for employment. The maximum length for this type of visa is 5 years, however, if the employment contract is longer than five years, then an extension will need to be sought before the end of the visa.

This visa also offers the possibility to live and work in India on a more permanent basis.

Visa applications must be made in the applicant’s country of residence.

VAT

General

The standard rates of VAT in India are 18.00% and 12.00%, the reduced rate is 5.00%.

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    Questions & Answers

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    2 Comments
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    Devi
    Devi
    9 months ago

    When do you need to start contributing to the Provident Fund? 

    Emily Kuhnert
    Admin
    9 months ago
    Reply to  Devi

    If a company has less than 20 employees, the employer is not required to contribute to the PF, however, this can be a voluntary contribution. Once there are more than 20 employees, this becomes a mandatory contribution.

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