4. Types of leave

There is no information about the types of leave for this country.
Learn more about 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 infants

If you have three or more girls, you will be paying for 12 weeks.

Paternity leave

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

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.

5. Employment termination

There is no information about employment information for this country.

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.

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.

Severance pay

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

6. Working hours

There is no information about the working hours for this country.

General working schedule

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

Overtime is compensated at twice the rate of regular pay.

7. Minimum wage

There is no information about the working hours for this country.

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.

8. Employee benefits

There is no information about the working hours for this country.

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.

9. Taxes

There is no information about the working hours for this country.

Corporate tax

Companies in India are imposed a corporate tax rate between 15 percent and 22 percent. These rates are also already inclusive of surcharge and cess.

Individual income tax

Income tax is a tax levied on people or organizations (taxpayers) based on their income or profits (taxable income). In most cases, income tax is calculated as the product of a tax rate multiplied by taxable income. Individuals, on the other hand, pay tax at slab rates. The Government established a new tax system for people in the Finance Act of 2020, offering them the choice of opting for the new regime or continuing with the previous regime.

The Income Tax Department collects the tax on behalf of the federal government. Farmers, who make up 70% of the Indian workforce, are usually exempt from paying income tax in India.

In India, income tax returns are usually due on the 31st of July, 30th of September, or 30th of November, depending on the taxpayer type.

Everyone in India who earns or receives an income is liable to income tax. The income was split into five categories by the I-T Department: income from salary, revenue from other sources, income from house property, income from capital gains, and income from business and profession.

VAT, GST and sales tax

The Goods and Services Tax (GST) is an indirect tax levied on the provision of goods or services.

Central Goods and Services Tax (CGST): A portion of the tax levied on intrastate transactions that is paid to the central government.

State Goods and Services Tax (SGST): A tax levied by the state on intrastate transactions.

Integrated Goods and Services Tax (IGST): a sales tax levied on interstate transactions.

For tax collection purposes, goods and services are split into five tax slabs: 0%, 5%, 12%, 18%, and 28%. Petroleum goods, alcoholic beverages, and electricity, on the other hand, are not taxed under GST and are instead charged individually by individual state governments, as was the case under the old tax regime.

10. VISA and work permits

There is no information about the working hours for this country.

In India, there are two sorts of visas: business visas (visits to India for up to six months to do business for a non-Indian firm) and employment visas.

Foreigners coming to India for work must get an employment visa. The maximum duration for this kind of visa is five years; however, if the job contract is longer than five years, an extension must be obtained before the visa expires.

This visa also allows you to live and work in India on a permanent basis. Visa applications must be submitted in the applicant's home country.

11. Employer Of Record service terms

There is no information about the working hours for this country.

Employment contracts

Names of the employer and employee

Address of the employer and location where work will be performed

Salary and payment intervals

Vacation and other leave entitlements

Work hours and days

Probation period (if applicable)

Notice periods and other details related to end of employment

Signatures of employer and employee

Minimum assignment length

There is no set length for assignments. This is usually indicated in the employment contract for fixed-term employments.

Payment currency

Indian Rupee (INR)

13.Opening a subsidiary in India

There is no information about the working hours for this country.

How to set up a subsidiary

Before establishing a subsidiary in India, you must examine a number of issues. Begin by deciding the area or business you want to join. India has varied FDI restrictions for different industries, and it is essential to get prior clearance from the Reserve Bank of India before establishing a commercial presence.

Incorporating a corporation in India is a lengthy and difficult procedure that may cost a large amount of money before the establishment is complete. The majority of firms select between a private limited and a public limited subsidiary depending on how active they would be in the nation. The following stages are involved in the incorporation process:

1. Get a Director Identification Number (DIN) online

2. Get a Digital Signature Certificate (DSC) online

3. Reserve a business name through the Registrar of Companies

4. Prepare the Memorandum and Articles of Association

5. File an incorporation application online

6. Request a certificate to commence operations

7. Create a company seal

8. Get a permanent account number (PAN)

9. File with the Employees’ Provident Fund Organization

10. Register for VAT

11. Apply for medical insurance

Subsidiary laws

Subsidiary laws in India vary greatly according on locality. Every state in India works nearly as if it were its own nation. Different cities and areas may have different restrictions, fees, and availability. Furthermore, each has distinct cultural customs and languages, which may make doing business challenging.

The procedures for incorporation also alter depending on whether you establish a public or private subsidiary:

Private limited companies are appropriate for small and medium-sized enterprises. Because of the minimal reporting requirements, they are the most popular. Subsidiary regulations in India mandate a minimum paid-up capital of $1,620 and a minimum of two subscribers. Private corporations must have at least two directors and a maximum of fifteen. You must also produce financial statements and submit them to a statutory audit within six months of the fiscal year's conclusion.

Limited liability corporation (LLC): The Securities and Exchange Board of India (SEBI) requirements must be followed by this subsidiary of a public business. Subsidiary regulations in India require a minimum paid-up capital of $8,100 and at least seven subscribers. A minimum of three directors, but no more than 15, are also required for public businesses. Accounting and auditing standards are the same for both public and private subsidiaries.

13. Why choose Rivermate as your Employer of Record / PEO in India

Establishing an entity in

India

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

India

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

India

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

India

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

India

via our Employer of Record / PEO solution.

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