Hire and pay employees in
India, hassle-free

India employs a progressive income tax system. Individuals can choose between two tax regimes: the old regime and the new regime. 

New Tax Regime

Old Tax Regime

Please note: tax rates and thresholds vary for employees over the age of 60.

Provident Fund contributions must be mutually agreed upon by the employee and employer. Contributions to the Provident Fund can be calculated on either the employee's basic salary, which amounts to 40% of the employee's total gross salary for EOR Employees, or on a fixed amount of INR 15,000 per month. 

The estimated employer cost is 12.5% of the employee’s basic salary + INR 75 or 12.5% of the fixed amount of INR 15,000, for a total of INR 1,950 per month.

Monthly Costs

Annual and Conditional Costs

• Labour Welfare Fund - INR 40 annually in December for EOR
• Employee State Insurance (ESI) - 3.25% monthly for each employee earning under INR 21,000 gross per month
• Gratuity - Variable depending on years of service, paid at offboarding from the 5th year of employment

These costs are provided as estimates and are intended solely for general informational purposes. To fully comprehend all associated costs and fees related to the terms of any employment agreement for this country, please contact our Sales team for a quote.

Standard working hours are 8 hours per day, 40 hours per week. The standard workweek is from Monday to Friday.

There are no statutory requirements for employees in the private sector outside of factory roles. 

Overtime payment is mandatory for factory workers. For additional hours worked, industry practice is to compensate employees with pro-rate PTO or additional pay at 100% of their regular salary.

Pregnant employees who have worked with the same employer for 80 days in the last year are entitled to 26 weeks of paid leave. No more than 8 weeks may be taken before the child's birth.

The employee will receive 100% of their average salary during this period, and the employer will be responsible for this pay.
The employee can extend leave without pay.

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

Terminations in India cannot be carried out “at will”. Compliant terminations include:

• Termination With Cause
• Termination due to Poor Performance
• Resignation
• Mutual Termination
• Termination During Probation Period

Minimum 1 month, or if the EA provides for a longer duration then the longer duration applies.

Employees are entitled to severance pay based on the reason for termination.

For terminations not due to employee misconduct, the statutory minimum is 15 days average wage per year of continuous service or part thereof in excess of 6 months for all employees with at least 1 year of continuous service (i.e. 240 days of work) along with other statutory payments.

For terminations due to employee misconduct, no notice or severance is required.

Note: In the event of a mutual termination agreement, the best practice is to include an ex-gratia severance pay on top of the above statutory requirements.

To protect you from unforeseen financial risks arising from terminations, Deel applies a Severance Accrual to all employment agreements in this country.  Deel has extensive expertise in managing litigation risk globally and our Severance Accrual calculation is based on the prevailing common-law or statutory entitlements and local best practices. In the event your employee resigns or is not entitled to severance, all unused amounts will be returned to you.

National holidays include:

1. New Year’s Day
2. Lohri
3. Makar Sankranti
4. Republic Day
5. Maha Shivratri
6. Holi
7. Ugadi
8. Ram Navami
9. Mahavir Jayanti
10. Good Friday
11. Eid al-Fitr
12. Buddha Purnima
13. Bakri Eid
14. Muharram
15. Rakshabandhan
16. Independence Day
17. Janmashtami
18. Ganesh Chaturthi
19. Onam
20. Gandhi Jayanti
21. Dussehra
22. Eid-e-Milad
23. Diwali
24. Guru Nanak Jayanti
25. Christmas

Contracts must be in English and can be bilingual. They must be in writing and signed by both parties.

A contract must include:

• Name
• Job role and job description
• Leaves
• Employee obligation
• Termination conditions