Back
Menu
SALARY PAYMENT IN Indian Rupee (INR)
CONTRACT LANGUAGES Hindi / English
PAYROLL TAX 16.75%
PAYROLL CYCLE Monthly
TIME TO HIRE 12 hours
Get Started
Hire and pay talents
with Horizons in
180+ countries
India
India has a robust social security program requiring contributions from both employees and employers. Read below for details about this system.
Companies with more than 20 employees must make mandatory contributions to the Provident Fund (PF) and Employee’s Pension Scheme (EPS). The Provident Fund is designed as a retirement savings plan for employees.
For employees that make less than 21,000 INR per month, there is a health insurance is contributed by both the employee and employer. This scheme is called the Employees State Insurance Cooperation (“ESIC”). This social insurance covers sickness maternity, disablement, death and workplace injury for lower paid workers. Employees must contribute at least 1.75% and employers must contribute at least 4.75% or a minimum of 137 INR a day per employee to this scheme. This is compulsory for companies with more than 10 employees.
If an employee gets injured or dies at work, then the employer is formally responsible to compensate the employee or paid to the employees significant other.
Employers are responsible for covering maternity leave for eligible employees. Employees are entitled to 100% of their salary for 26 weeks. The female employee must have been employed for at least 80 days in last 12 months prior to the due date.
Gratuity must be collected by the employer to give to an employee once they leave an organisation after 5 years of service. Those who leave before 5 years will not receive a gratuity payment from their employer.
The PF is only available to employees who are employed in the organized sector which includes employees employed by foreign companies.
Employees in India are mandated to contribute a minimum of 12% of their salary package towards the Provident Fund. Contributions are capped up to15,000 INR. On top of this contribution, employees must also contribute to the Labor Welfare Fund. The rate of contribution varies by each state.
Employers are also mandated to contribute at least 12% of their employees salary package to the Provident Fund, plus a 1% administrators charge. Like employees, the Provident Fund contribution is capped at a maximum of 15,000 INR. It is possible for employers to contribute more to the PF as part of an employee’s benefit package. Similarly, employers also need to contribute to the Labor Welfare Fund, but rates are different between states.
India has one of the highest employer contribution rates in comparison to many surrounding countries. However, these schemes are only catered to a very small proportion of the population.
Your business can easily hire employees in India without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.
For an employee that makes more than 21,000 INR per month, employers must contribute at least 13% of an employee’s salary package.
Social security covers workers for the following situations Pension or retirement, Health and Medical if an employee falls sick, Disability for when an employee gets injured or dies at work, Maternity leave for female employees and a Gratuity payment if they cease employment with an employer after more than 5 years of service.
Headquarters
71 Robinson Road #13-153
Singapore 068895
+65 3158 1382
Europe
Skalitzer Str. 85/86
10997, Berlin
+49 30 3119 9653
Americas
1700 S. Lamar Blvd Suite 338
Austin, Texas 78704
+1 (737) 265-6065
See more locations
71 Robinson Road #13-153
068895, Singapore
+65 3105 1170
Skalitzer Str. 85/86
10997, Berlin
+49 30 3119 9653
1700 S. Lamar Blvd Suite 338
Austin, Texas 78704
+1 (737) 265-6065
See more locations
Horizons © 2024 – Privacy Imprint & Terms Third-Party Processor GDPR Policy
