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COUNTRY GUIDE » INDIA

Expand into India with Innovare

Explore India’s unique business landscape effortlessly with Innovare’s comprehensive EOR solutions. From intricate immigration services to seamless payroll administration.

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Brief Overview

Innovare India

Innovare empowers seamless business expansion into India’s dynamic and diverse economic landscape. Our comprehensive EOR services leverage our deep expertise and unwavering commitment to compliance, ensuring a smooth adaptation for your venture within the local business environment.

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Expert navigation through India’s complex regulations and legalities.

Streamlined processes for foreign worker employment and payroll management.

Unwavering dedication to adhering to local labour laws and tax requirements.

Experienced support for both expatriate and local talent acquisition in India.

Local Expertise

Country-Specific Solutions

Onboarding

Indian law mandates employers to provide a written employment contract outlining key terms of employment to new hires within one month of their start date. This contract fosters transparency by clearly outlining job duties, compensation details, work schedules, and leave entitlements.

Here’s a breakdown of the general elements an Indian employment contract should encompass:

  • Job Description: Clearly defined roles and responsibilities ensure a shared understanding of performance expectations.
  • Work Schedules: Outlining work schedules promotes transparency and adherence to regulations. The standard workweek in India is 48 hours, with a maximum limit of 10 hours per day. You get paid double your usual wage for those extra hours. However, there are exceptions for certain job roles like government workers and freelancers who might not qualify for this.
  • Compensation and Benefits: Specifying salary, benefits packages (if applicable), and any allowances ensures financial clarity. A national-level minimum daily wage is approximately INR 178 translating to around INR 5340 per month.
  • Leave Entitlements: Indian labour laws provide for various leave allowances, including annual leave, sick leave, and national holidays.
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Payroll Services

India mandates monthly salary payments paid on or after the 28th of each month. The standard workweek is 48 hours, with overtime pay mandatory for exceeding these hours. Here’s a general overview of payroll in India:

  • Salary Payment: Monthly on or after 28th of each month.
  • Standard Workweek: 48 hours.
  • Overtime Pay: Mandatory for exceeding 48 hours per week or 10 hours per day.
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Taxes

India operates a progressive tax system, meaning tax rates increase as income rises. Here’s a breakdown of the general tax structure for reference:

  • Income Tax: Ranges from 5% for taxable income below ₹6 lakhs (Indian Rupee) to 30% for income exceeding ₹15 lakhs.
  • Resident vs. Non-Resident:Residency status can impact tax rates. Generally, foreign residents in India are taxed on their India-sourced income. There may be tax treaties in place with your home country that can affect your tax obligations. Consulting a tax professional is recommended.
  • Social Security Contributions: The employees contribute a fixed rate of 12% of salary while the employer is required to make the matching contribution and deposit both the employer’s and employee’s contributions (i.e. 24%) to the provident fund of the employee by the 15th day of the following month.
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Leave

Indian labour law mandates various leave entitlements for employees to promote work-life balance and well-being. Here’s an overview of some key leave provisions:

  • Annual Leave: A minimum of one day of earned leave per 20 days worked, with an accumulation of up to 30 days. Some organisations may offer more generous leave policies.
  • Sick Leave: Employees are entitled to 7 days of sick leave and 8 days of casual leave per year, which can be used for sick leave or other personal purposes.
  • National Holidays: There are around 11-12 national holidays in India per year, with employees entitled to paid leave on these days.
  • Maternity Leave: Female employees are entitled to 26 weeks of paid maternity leave if it’s an employee’s first or second pregnancy. If it's the third child or more, they are only entitled to 12 weeks maternity leave for each subsequent pregnancy.
  • Paternity Leave: Employers are not required to offer paid or unpaid paternity leave. A paternity benefit is arranged at the discretion of the employer.
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Social Security Management

India enforces mandatory social security contributions for both employers and employees. These contributions fund various social welfare programs, providing a safety net for employees. Here’s a breakdown of the key points:

  • Programs: India's social security system comprises the Employees' Provident Fund (EPF), health and medical benefits, disability benefits, maternity, and gratuity.
  • Employee vs. Employer Contributions: The contribution for both is as follows:
  • Employee: In India, employees are required to contribute a minimum of 12% of their salary to the Provident Fund. Contributions are capped at 15,000 Indian rupees. Each state has its own contribution rate.
  • ‍Employer: Employers are also mandated to contribute 12% of employees' salary packages to the Provident Fund, plus 1% administrators' fees. Like employees, the Provident Fund contribution is capped at a maximum of 15,000 INR.
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Termination

Termination procedures in India require adherence to specific notice periods. Here’s a general overview of the termination process:

  • Notice Periods: An employee must give their employer between 15 and 90 days' notice, depending on their seniority within the organisation, and their contract. An employee who is still on probation does not have to give notice when resigning.
  • Procedure: An employee on probation, which in India can last from 3 months to 2 years, does not need any notice, reason or more compensation. Employees who are not on probation must be given enough notice, which depends on the state provisions, their industry and their seniority. Dismissal notices can range from 30 to 90 days, and a valid written explanation must accompany them.
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India Market
Insight

Economic Powerhouse

India boasts a rapidly growing economy, projected to be a leading global force in the coming years. This presents exciting opportunities for businesses seeking to expand into a vast and dynamic market.

Demographic Advantage

India possesses a young and increasingly skilled population, offering a substantial talent pool and a growing domestic consumer base.

Strategic Location

Situated in South Asia, India serves as a strategic gateway to the broader Asian market. This prime location offers access to a network of trade routes and potential customers across the region

Global Reach

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FAQ

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