All About Offering Employee Benefits in India
Hire the best talent in India with the information you need to offer a competitive benefits package and stay compliant.
Required Benefits in India
Though India offers state-sponsored benefits through social security, offering additional benefits can go a long way towards attracting top talent. Through our employer of record services, Justworks provides expert guidance and access to localized benefits, helping small businesses save time and resources on local entity setup. Let's explore what employers should consider offering.
Social Assistance
The Employees’ Provident Fund (EPF) and Employees’ State Insurance Act (ESIA) are key components of India's social security system. The EPF is a mandatory savings program for retirement. Both employers and employees are obligated to contribute a percentage of the employee's salary towards EPF and ESIA. ESIA provides comprehensive health and social security benefits, including medical care, cash benefits during sickness and maternity leave, and compensation for employment-related injuries. Together, they offer crucial financial and healthcare support to Indian workers and their families.
Time Off
Each state in India has distinct leave policies. Private sector employees typically receive 15 days of earned leave annually. According to the Factories Act, employees who work at least 180 days in a calendar year are eligible for 12 days of annual leave. Generally, workers under 15 years old earn one day of leave for every 15 days worked and adult workers earn one day of leave for every 20 days worked.
Bonus Payment
In India, mandatory employee bonuses are regulated by the Payment of Bonus Act of 1965. This act applies to factories and companies with at least 20 workers. According to the act, employees who earn up to ₹21,000 per month are eligible for a bonus if they’ve worked at least 30 days in the past fiscal year. The bonus must be at least 8.33% of the employee’s salary but can go up to 20%.
Offer Competitive Benefits
Besides mandatory benefits, employers should consider offering additional perks to attract top talent in India.
Health Insurance
Private health insurance benefits aren’t widespread in India. Employers can stand out by offering supplemental benefits for access to services that social security doesn’t cover. This added coverage can make a huge difference.
Wellness Programs
Employers can introduce wellness programs to boost employee health and well-being. This might include gym membership stipends, wellness workshops, mental health support, and company-driven initiatives to promote healthy living. These programs can enhance well-being and increase employee satisfaction and productivity.
Financial Benefits
Supplementing an employee benefits package with additional financial perks can help motivate employees long-term. Common offerings include providing bonuses, profit-sharing plans, stock options, employee share programs, and contributions to retirement savings beyond required superannuation contributions.
Ready to Offer Benefits in India?
Justworks EOR makes building your global team seamless by helping you access localized benefits to attract top talent in India. Simplify international hiring today.
