Hire in India
Currency
Indian Rupee (INR)
Capital
New Delhi
Official Language
Hindi and 22 additional languages
Payroll Cycle
Monthly
Our quickstart guide to hiring in India
Learn everything you need to know about hiring an employee in India
Wage & Tax Obligations
Minimum Wage Requirements
The minimum wage in India is complex. There is no statutory minimum wage for organizations in the private sector outside of regulated “factory” sectors.
For factory sectors, India uses a complex method of setting minimum wages set at a state and sub-state level that are updated regularly. India defines nearly 2,000 different types of jobs for unskilled workers and over 400 categories of employment, with a minimum daily wage for each kind of job.
The monthly minimum wage calculation includes the variable dearness allowance (VDA) component, which accounts for inflationary trends.
Individual Income Tax
India employs a progressive income tax system. Individuals can choose between two tax regimes: the old regime and the new regime.
New Tax Regime
| Tax Rate | Income Tax Thresholds |
| 0% | From INR 0 to 300,000 |
| 5% | From INR 300,001 to 700,000 |
| 10% | From INR 700,001 to 1,000,000 |
| 15% | From, INR 1,000,001 to 1,200,001 |
| 20% | From 1,200,001 to 1,500,000 |
| 30% | Over INR 1,500,001 |
Old Tax Regime
| Tax Rate | Income Tax Thresholds |
| 0% | From INR 0 to 250, 000 |
| 5% | From INR 250,001 to 500, 000 |
| 20% | From INR 500,001 to 1,000,000 |
| 30% | Over INR 1,000,000 |
Please note: tax rates and thresholds vary for employees over the age of 60.
Payroll Cost
Estimated employer cost is 5% of the employee’s salary or INR 1950*.
During onboarding, the employee will decide how to contribute to the Provident Fund. Employees can choose to have their contributions calculated based on their basic monthly salary (40% of the gross monthly salary) or based on a fixed amount of INR 15,000. The employer costs for the Employee's Provident Fund (EPF) and the Provident Fund Office EPF Admin Fee will be calculated based on the employee's decision. The Employees' Deposit Linked Insurance (EDLI) cost will be 0.5% of INR 15,000 (INR 75) in both cases.
- Employee's Provident Fund (EPF): 4.8% of the employee’s monthly gross salary (12% of the basic salary) or INR 1800
- Provident Fund Administrative Charges: 0.2% of the employee’s monthly gross salary (0.50% of the basic salary) or INR 75
- Employees' Deposit Linked Insurance (EDLI): 0.5% of INR 15,000 (INR 75)
*Employees in India can choose their Provident Fund contribution, which needs to be matched by the employer. Employees can decide to contribute a percentage of their basic salary (40% of the employee's monthly gross salary) or a fixed fee. This will affect the employer costs.
These costs are provided as estimates and are intended solely for general informational purposes. To fully comprehend all associated costs and fees related to the terms of any employment agreement for this country, please contact our Sales team for a quote.
Overtime Pay & Maximum Hours
Standard working hours are 8 hours per day, 40 hours per week. The standard workweek is from Monday to Friday.
There are no statutory requirements for employees in the private sector outside of factory roles.
Overtime payment is mandatory for factory workers. For additional hours worked, industry practice is to compensate employees with pro-rate PTO or additional pay at 100% of their regular salary.
Leave Policy
Maternity Leave
Pregnant employees who have worked with the same employer for 80 days in the last year are entitled to 26 weeks of paid leave. No more than 8 weeks may be taken before the child's birth.
The employee will receive 100% of their average salary during this period, and the employer will be responsible for this pay.
The employee can extend leave without pay.
Paternity Leave
There is no paternity leave currently required by law.
Parental Leave
In India, no law covers parental leave. However, employees may be entitled to maternity leave.
Sick Leave
Employees are entitled to paid sick leave for up to 12 days. Sick leave accrues at one day of sick leave per month. The employee is paid at 100% of their average salary, and the employer is responsible for this payment.
Termination
Termination Requirements
Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.
Terminations in India cannot be carried out “at will”. Compliant terminations
Terminations in India cannot be carried out “at will”. Compliant terminations include:
Termination With Cause
Termination due to Poor Performance
Resignation
Mutual Termination
Termination During Probation Period
Notice Period
Minimum 1 month, or if the EA provides for a longer duration then the longer duration applies.
Severance for Employees
Employees are entitled to severance pay based on the reason for termination.
For terminations not due to employee misconduct, the statutory minimum is 15 days average wage per year of continuous service or part thereof in excess of 6 months for all employees with at least 1 year of continuous service (i.e. 240 days of work) along with other statutory payments.
For terminations due to employee misconduct, no notice or severance is required.
Note: In the event of a mutual termination agreement, the best practice is to include an ex-gratia severance pay on top of the above statutory requirements.
Statutory Time Off
Paid Time Off
PTO is established in the employment agreements. The minimum PTO is 18 days.
Public Holidays
National holidays include:
New Year’s Day
Lohri
Makar Sankranti
Republic Day
Maha Shivratri
Holi
Ugadi
Ram Navami
Mahavir Jayanti
Good Friday
Eid al-Fitr
Buddha Purnima
Bakri Eid
Muharram
Rakshabandhan
Independence Day
Janmashtami
Ganesh Chaturthi
Onam
Gandhi Jayanti
Dussehra
Eid-e-Milad
Diwali
Guru Nanak Jayanti
Christmas
Disclaimer
The information contained in this Country Guide is provided for informational purposes only and should not be construed as legal advice on any subject matter. The contents of this Country Guide contain general information and may not reflect current legal developments or address your situation. You should not act or refrain from acting on the basis of any content included in this Country Guide without seeking the advice or representation of a licensed attorney. Anemone HR disclaims all liability for actions you take or fail to take based on any content included in this Country Guide.
Information provided in this Country Guide is provided “as is” without warranty of any kind, either express or implied, including without limitation warranties of merchantability, fitness for a particular purpose, or non-infringement. Anemone HR periodically adds, changes, improves, updates, or removes information without notice, and assumes no liability or responsibility for any errors or omissions in the contents of this Country Guide. This Country Guide may contain links to other websites. Anemone HR disclaims all liability for the privacy practices or the content of such websites.