Guide to employment, payroll and benefits in


Rivermate offers complete payroll, benefits and compliance services for


01. Overview

Last updated: 

August 19, 2021

Indian Rupee
New Delhi
Ease of doing business
Hindi, English
GDP growth

02. Grow your team in


with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in


, particularly if you don't have established local relationships. You can hire employees in


effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

India is a nation in South Asia that is formally known as the Republic of India. It is the world's second most populous nation, the seventh largest by land area, and the world's most populous democracy. It shares land boundaries with Pakistan to the west, China, Nepal, and Bhutan to the north, and Bangladesh and Myanmar to the east, all of which are bounded by the Indian Ocean on the south, the Arabian Sea on the southwest, and the Bay of Bengal on the southeast. India borders Sri Lanka and the Maldives in the Indian Ocean, and its Andaman and Nicobar Islands share a maritime boundary with Thailand, Myanmar, and Indonesia. 55,000 years ago, modern humans arrived on the Indian subcontinent from Africa. Their long occupation as hunter-gatherers, which began in various types of isolation, has resulted in a area that is highly diverse, second only to Africa in terms of human genetic diversity. Settled life first appeared on the subcontinent 9,000 years ago, on the western outskirts of the Indus river basin, and eventually evolved into the Indus Valley Civilisation of the third millennium BCE. An ancient form of Sanskrit, an Indo-European language, had diffused into India from the northwest by 1200 BCE, emerging as the language of the Rigveda and documenting the birth of Hinduism in India. In India's northern and western parts, the Dravidian languages were supplanted. Within Hinduism, caste stratification and exclusion had emerged by 400 BCE, and Buddhism and Jainism had emerged, declaring social orders unrelated to heredity. The loose-knit Maurya and Gupta Empires centered in the Ganges Basin arose from early political consolidations. Their period was characterized by a wide range of ingenuity, but it was also marked by the decline of women's status and the integration of untouchability into an organized culture of belief. The Middle Kingdoms of South India exported Dravidian-language scripts and religious cultures to Southeast Asian kingdoms in the early medieval period. Christianity, Islam, Judaism, and Zoroastrianism all founded themselves on India's southern and western coasts. Muslim armies from Central Asia invaded India's northern plains on many occasions, eventually creating the Delhi Sultanate and pulling northern India into medieval Islam's cosmopolitan networks. The Vijayanagara Empire founded a long-lasting composite Hindu culture in south India in the 15th century. Sikhism arose in the Punjab, rejecting institutionalized religion. In 1526, the Mughal Empire brought two centuries of relative prosperity to India, leaving a legacy of luminous architecture. The British East India Company gradually expanded its rule, turning India into a colonial economy while also consolidating its sovereignty. In 1858, the British Crown took control of the nation. The rights given to Indians were slowly granted, but technological advancements were made, and ideas about schooling, modernity, and public life began to take hold.

04. Public holidays

05. Types of leave

Paid time off

Employees are entitled to a total of 15 paid holiday days each year. The full number of vacation days that can be rolled forward to the next year is 30.

Public holidays

Republic Day, Independence Day, and Ghandi Jayanti are three national holidays on which companies must close. Furthermore, each region has its own set of public holidays that are celebrated.

Sick days

Employees are given a limit of 15 paid vacation days each year and are paid 70% of their regular monthly pay over this period.

Maternity leave

In the six months leading up to childbirth, employees are paid at 100% of their annual salary. The amount of fully compensated days off an employee is entitled to is determined by the number of children he or she has.26 weeks charged for the first two infantsIf you have three or more girls, you will be paying for 12 weeks.

Paternity leave

While obligatory leave is not required in the private sector, male government employees often receive 15 days off.

Parental leave

India currently has no statutory laws and regulations regarding parental leave.

Other leave

Casual leave is available in the event of an emergency or unforeseen circumstance. Typically, businesses have a rigid monthly limit of three days and an annual limit of six days. Casual leave cannot be redeemed. Unused leave is automatically forfeited at the end of the year.Work-related disability leave: Work-related injury payments are funded by employee premiums to workers' compensation and state insurers. Temporarily affected employees are paid 50% of their monthly wages.

06. Employment termination

Termination process

In India, either the employer or the employee may end an employment contract. Generally, notice is required.

Notice period

Depending on whether or not the employee is still on probation, the notice period is between 15 and 30 days. It is possible to pay in lieu of notice.

Severance pay

Severance pay is available in certain circumstances and is calculated as 15 days of pay for each year of service.

Probation period

Probationary periods are commonly used in India with 3 months being a typical probation timeframe. The maximum initial probation is 3 months, and then the employer can extend the probation for up to an additional 3 months.

07. Working hours


Employees typically work between 40 and 48 hours per week, but hours vary according to the type of work and industry. Between workdays, Indian workers receive 10.5 hours of rest.


Overtime is compensated at twice the rate of regular pay.

08. Minimum wage


Minimum wage laws in India vary by state and sector. For example, state governments set a separate minimum wage for the agriculture sector. Employers are required to provide employees with payslips, and it is common for employers to pay employees directly from their bank accounts.

Employers typically pay employees on the first of each month. According to the Wages Act, all businesses with fewer than 1,000 employees are required to pay wages on or before the 7th of each month, while businesses with more than 1,000 employees are required to pay on or before the 10th.

Salary inflation is prevalent in India, with employees anticipating an annual increase in title and wage of approximately 10% to 15%. While India's compensation laws do not require this increase, employees who do not receive one are likely to seek alternative employment, particularly in the technology sector.

09. Employee benefits


In India, there is a mix of public and private insurance, and some candidates request a stipend for additional medical coverage.

Many employers also provide supplemental insurance.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in


to hire a team takes time, money, and effort. The labor law in


has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into


simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in


give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in


via our Employer of Record / PEO solution.

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