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Last updated: Feb 27, 2022
Payroll and Benefits Guide
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Employer Payroll Contributions
Employer Payroll Contributions
Employee Income Tax
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.
The payroll cycle in India is generally monthly, with wages paid on or after the 28th of each month.
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.
The standard workweek is 48 hours, 9 hours per day.
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.
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.
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.
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.
While government employees are entitled to 15 days of paternity leave, there are no statutory paternity leave laws for the private sector.
There are no statutory laws on parental leave.
Each state generally sets other leave entitlements and policies.
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.
The notice period required is at least 30 days.
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 periods in India generally differ based on the employee’s role and their seniority, being between 3and 6 months.
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.
The standard rates of VAT in India are 18.00% and 12.00%, the reduced rate is 5.00%.