Explore our EOR & PEO services in INDIA

As your EOR in India, we would support your growth by contracting personnel and handling their payment without establishing a local branch office or subsidiary.

In compliance with regional labor laws, your individual is employed by a PEO in India and can be onboarded in days as opposed to the usual months. Your new employee will start working for you soon, similarly to the rest of your team.

EOR in India

Country Overview

India is the second most populous country in the world, with over 1.3 billion people. It is a diverse country with many different cultures and languages, and it has a rich history and cultural heritage. India is a democratic republic with a parliamentary system of government. It is a rapidly developing country with a growing economy and a large middle class. India is also home to a large number of multinational companies, which have set up operations in the country to take advantage of its large pool of skilled labor.

General Information

Population: ~1.400.000.000

Capital City: New Delhi (population: ~28.000.000)

GDP: ~$11.6 trillions

GDP per capita: ~$8.293

Currency: Indian rupee (INR)

Unemployment: ~6%

Employer Taxes: 16.75%

Employee Taxes: 0% – 30%

INDIA EOR SPECIFICS

Employment contracts in India

Employment contracts are legal agreements between an employer and an employee that outline the terms and conditions of the employment relationship. These contracts can be written or oral, and they typically outline the duties and responsibilities of the employee, the duration of the employment, and the compensation that will be provided.

There are several types of employment contracts in India, including fixed-term contracts, temporary contracts, and permanent contracts. Fixed-term contracts specify a specific period of employment, while temporary contracts may be for a specific project or task. Permanent contracts, on the other hand, are ongoing and do not have a fixed end date.

Probation period in India

The length of the probation period is typically specified in the employment contract, and it can range from a few weeks to several months. At the end of the probation period, the employer will review the employee’s performance and decide whether to confirm their employment or terminate their contract.

In India, the terms and conditions of probation periods are governed by the Probation of Apprentices Act of 1961 and various labor laws and regulations at the national and state level. These laws establish minimum standards for probation periods, including the length of the period, the rights and obligations of the employer and employee, and the process for evaluating and terminating employment.

Working hours in India

According to the Factories Act of 1948, the maximum number of working hours for employees in factories is 48 hours per week, and 8 hours per day. This can be averaged out over a period of up to 3 months. The Act also requires that employees be provided with at least one day of rest per week, and that they be given a rest break of at least half an hour after every 5 hours of continuous work.

For employees in other sectors, such as retail, the working hours may vary. However, the maximum number of working hours per week is generally 48 hours, and employees are entitled to at least one day of rest per week.

Vacation days in India

Adult workers are generally entitled to earn one day of leave for every 20 days of service. This means that they are entitled to 15 working days of annual leave, while young workers are entitled to 20 working days. These entitlements may vary by state and sector, as different labor laws and regulations apply. During the term of their annual leave, workers are typically paid their full daily wages. This is intended to ensure that workers are able to take time off without experiencing a loss of income.

Sick leave in India

In India, sick leave, also known as medical leave, is time off from work that is granted to employees who are unable to work due to illness or injury. The entitlements to sick leave vary depending on the employer and the sector in which the employee works, and they may be subject to national and state labor laws and regulations.

According to the Factories Act of 1948, employees in factories are entitled to sick leave with pay for up to 12 weeks in a year. For the first two weeks of sick leave, employees are entitled to receive their full wages, while for the remaining 10 weeks, they are entitled to receive half of their wages.

Wages and Salary Payment in India

There is no national minimum wage that applies to all workers across the country. Instead, minimum wages are set by individual states or sectors of industry. As a result, wages in India can vary significantly, with some workers earning as little as INR 5300 per month and others earning as much as INR 22000 per month. The specific minimum wage that applies to a worker depends on the state or sector in which they work, and it may be subject to change over time. In India, salary payments are typically made on a monthly basis, although some employers may choose to pay their employees on a biweekly or weekly basis. Salaries may be paid in cash, by check, or by direct deposit into the employee’s bank account.

Public Holidays in India

India is a culturally diverse society that celebrates a wide range of holidays and festivals. Some of the most well-known national holidays in India include Republic Day on January 26, Independence Day on August 15, and Gandhi Jayanti on October 2. These holidays are celebrated throughout the country and are marked by parades, flag-hoisting ceremonies, and other patriotic or cultural events. In addition to these national holidays, there are also numerous regional and local holidays that are celebrated in specific states or regions of the country.

These holidays may be based on cultural or religious traditions, and they may vary from one region to another. According to the Delhi S&E Act of 1954, employees in India are entitled to 14 days of public holidays per year. In addition to these public holidays, there are also many grand festivals that are celebrated in major parts of the country, as well as numerous state festivals. The specific festivals that are celebrated in a given region may depend on the prevalent religious and linguistic demographics of that region.

Employer Taxes in India

In India, social security contributions refer to the payments that are made by both employers and employees to fund various social security benefits, such as healthcare and unemployment insurance. These contributions are typically required by law, and they are used to support the welfare of workers and their families.

Currently, social security regulations in India apply mandatorily to establishments that employ 20 or more people, or to establishments that voluntarily seek registration with the authorities. Employees who work for these establishments, including foreign nationals, are required to contribute towards the social security fund at a fixed rate of 13% of their monthly basic salary, up to a maximum of INR 15000. These contributions are deducted from the employee’s salary and are used to fund various social security benefits.

Employee Taxes in India

In India, employers are required to contribute to various insurance programs on behalf of their employees. The specific contribution required may vary depending on the salary of the employee, and it can range from 10% to 33%.

One such insurance program is the Employees’ State Insurance (ESI), which is funded through contributions from both employers and employees. For employees, the contribution to ESI is 3.25% of their monthly gross salary, up to a maximum of INR 21000. This contribution is deducted from the employee’s salary and is used to fund various social security benefits such as healthcare and unemployment insurance.

Notice Period in India

The length of the notice period is typically negotiated between the employer and the employee, and it may range from a few days to several weeks or months. If the employee fails to give the required notice, they may be required to pay damages to the employer for any losses incurred as a result.

Termination / Severance in India

It is important to serve a notice period when terminating an employee. The notice period must be given in writing and must state the reason for the termination. The notice period must be given 30 to 90 days before the termination date. There is a lagislation that requires employers to pay gratuity to terminated employees. Gratuity is calculated using the formula: (15 days x last drawn salary x years of service) / 30.

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