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India Payroll Guide

Overview

India is the seventh-largest country by area, the second-most populous country, and the most populous democracy. By 2020, India is expected to be the world’s youngest country. With over one billion residents and a rapidly expanding consumer class, the economy is one of the fastest growing in the world. India is a strong focus for multinational companies as it provides business opportunities across a wide range of sectors and industries including Information Technology and the Auto sector.

Economy forecasts paint India as the fifth largest consumer market in 2025.

For more than a decade, India has been a favourite destination for foreign investment – with a FDI inflow of $64.37 billion during the fiscal year, ending in March 2019.

 

 

India Payroll Facts

  • Population : 1.339 Billion
  • Working Population : 295.79 Million
  • Currency : Indian rupee
  • Minimum Wage : $0.31 (varies by State)
  • Identity Number : Aadhaar, PAN
  • Number Of Pay Periods : 26
  • Main Languages : English, Hindi, Marathi, Bengali and Telugu
  • Capital City : New Delhi
  • Big Mac Index : $2.55
  • Fun Fact : • 70% of all the worlds spices come from India.

 

Taxes

Tax year: 1st April – 31st March

 

Taxes in India are levied by the Central Government and the state governments. Some minor taxes are also levied by the local authorities such as the Municipality.

 

Healthcare & Benefits

In India the provision of healthcare is the responsibility of the state government. Each state is responsible for ‘raising the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties’.

 

Employers are responsible for two major types of severance pay at the termination of employment, including a gratuity payment and a leave encashment. If there is a written contract, the employer is required to adhere to the tenants of that document as well.

 

Expatriates

All labour laws regulating employment relationships in India also apply to foreign nationals working in India. These include the Employees’ Provident Fund and Miscellaneous Provisions Act 1952, Employees’ State Insurance Act 1948, Industrial Disputes Act 1947, Maternity Benefit Act 1961 and the Payment of Bonus Act.

 

Work Leave & Holidays

Leave entitlements in India generally vary among states and industries, with local governments setting minimum leave entitlements and individual companies offering their own paid leave benefits. On average, Indians receive 18 days of paid leave a year. Employees are also entitled to 15-20 paid public holidays, depending on the region.

Maternity leave is provided to every woman employed in an establishment for at least 80 Days preceding the expected date of delivery, up to a maximum period of 26 weeks (of which not more than 8 weeks can precede the date of delivery). The employee receives her salary during the statutory maternity period. Indian employment law does not provide for paternity leave.

Adult workers in factories, mines, and plantations are entitled to one day off for every twenty days worked the previous year, which generally amounts to 12 days a year.

Minors are entitled to 15 days. This does not apply to employees of factories of government-owned railways, who are governed by a separate set of leave entitlements decided by the government.

India's National Holidays
January 26th
Republic Day
August 15th
Independence Day
October 2nd
Gandhi Jayanti
May 1st
Labour Day

 

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