Overview

Capital
New Delhi
Currency
Indian Rupee
Date Format
dd/mm/yyyy

Taxes

Employer
Up to 12% - Pension fund
4.75% - Health insurance
Employee
0% - 0 Rs - 2,50,000 Rs
10% - 2,50,001 Rs - 5,00,000 Rs
20% - 5,00,001 Rs - 10,00,000 Rs
30% - Above 10,00,000 Rs
Up to 12% - Provident fund
1.75% - Health insurane

Minimum Wage

General

Minimum wages in India differ according to the governing state and workers skill set.

Working Hours

General

A full-time work week is 48 hours. 

Overtime

Overtime is paid double the rate of the normal pay.

VAT

General

VAT is 5% standard rate.

Mandatory Benefits

Pension Fund

Pension is comprised of a pension scheme and a provident fund.

Contributions are made by the employee, employer and government.

  • Employee - (Provident Fund) 12% of basic wages
  • Employer – 8.33% of monthly payroll. (Provident Fund) 3.67% of monthly payroll and .5% of monthly payroll for administrative cost. 8.33% of monthly payroll is contributed for employees 58 or older.
  • Government – 1.16%of basic wages.
Social Security

India’s social security is comprised of the Employees Provident Fund (mandatory if the company has over 20 employees), the Miscellaneous Provisions Act, Employees State Insurance and a pension scheme. It covers pension, health, injury and unemployment.

Health Insurance

Healthcare is made of contributions by the employee, employer and government.

  • Employee – 1.75% of wage
  • Employer – 4.75% of payroll

Government – 12.5% of medical bill costs

Payroll

Payroll Cycle

Employees must be paid by the last day of the month, however, it is customary to pay employees from the 28th of the month onward. 

Overtime Payment

 

Termination

Termination Process

If termination isn’t specified in a contract, an employer must give 30 days’ notice or payment in lieu to an employee who has worked for at least 3 months. No notice is required for termination due to misconduct.

Advance Notice

A 30 days’ notice period should be given.

Severance Pay

Severance payment is given to workers who have been continuously employed for 2 years and are terminated for redundancy. Severance payment reflects duration of employment, performance and salary.