Facts & stats
India, officially the Republic of India (Hindi: Bhārat Gaṇarājya), is a country in South Asia. It is the second-most populous country, the seventh-largest country by area, and the most populous democracy in the world. India has been a secular federal republic since 1950, governed in a democratic parliamentary system. It is a pluralistic, multilingual and multi-ethnic society and has become a fast-growing major economy, a hub for information technology services, with an expanding middle class.
Grow your team in India with Remote
Employing in India requires employers to own a legal entity in the country and manage payroll, tax, benefits and compliance through their own in-country resources. The complexity of employment regulations in India makes full compliance with employment laws a burdensome process.
Through Remote’s Global Employer of Record solution, your team is employed by our local legal entities in each country, and we take care of payroll, tax, benefits and compliance so you can focus on what matters most -- your people.
India, like many other countries, treats self-employed individuals or contractors and full-time workers differently and there are risks associated with misclassification.
Employing in India
Under the Constitution of India, labour falls within the concurrent list giving power to both the Central and the respective State Government to legislate on such items, with the residual law-making powers vesting with the Centre.
This has resulted in a plethora of central and state laws related to wages, employment, industrial relations, social security, etc. being enacted to protect the interests of employees and to increase employment opportunities. The following are only guidelines in the broadest sense, and professional legal services are recommended when employing in India.
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Minimum Wage: stipulated by law, but varies state-by-state. Ranges from 160 rupees per day in Bihar, 348/day in Mumbai and 750 rupees per day in Kerala. State government set a separate minimum wage for agricultural workers. The minimum wages are set according to the 1948 Minimum Wages Act.
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.
Competitive benefits package in India
Besides providing your employees with all statutory benefits in India, Remote can advise on and arrange for custom benefits and perks for your employees upon request.
Taxes in India
Learn how employment taxes affect your payroll and your employees’ paychecks in India.
- 12% - Provident Fund
- 4.75% - Health Insurance
- Minimum 12% - Provident Fund
- 1.75% - Health Insurance
- 0% - Up to 250,000
- 10% - 250,001-5,000,000
- 20% - 5,000,001-10,000,000
- 30% - Over 10,000,000
Types of leave
By law, full-time workers in India are entitled to 15 days of holiday leave per year.
- Pregnancy and
Expecting mothers are entitled to six months of paid pregnancy leave (before the due date) and at least 26 weeks maternity leave (after childbirth) for the first two children. For mothers with more than three children, each new child results in an entitlement of 12 weeks of paid maternity leave.
The private sector does not have mandatory parental leave and any parental leave policies are decided on a per-company basis. Male Indian government employees get up to 15 days.
- Casual leave: provided for urgent and unexpected matters. Companies commonly have a limitation of three days of casual leave per month and a total of six per year. Lapses automatically bye end of year if unused.
- Work related injury leave: intended for unforeseen personal circumstances for which an employee has to take time off immediately. Examples include making arrangements for the care of a sick family member or in the event of a death in the family.
Termination of the employment relationship can happen in the following ways:
- Voluntary termination by the employee (resignation);
- Retirement as per the employment contract;
- Non-renewal of the employment contract or expiry;
- Dismissal of the employee due to serious employee misconduct (f.ex. theft, fraud, etc.); or
- Collective dismissal due to economic reasons (f.ex. bankruptcy, restructuring, etc.).
For an employee that has worked for at least 3 months, a notice period of 30 days is required. No notice is required for termination for misconduct.
There is no legal stipulation for minimum and maximum probation periods. However, as a matter of trade practice, the probation period usually ranges from 2 to 6 months.