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The individual income tax ranges from 5% to 30%. Income tax is calculated according to progressive rates. India Income comprises 2 regimes, the New Personal Tax Regime (NPTR) and the old regime. Taxpayers have the option to choose either one of the regimes.

The table below reflects New Personal Tax Regime (NPTR) effective 1 April 2020:

Estimated employer cost is 5% of the employee’s salary or INR 1950*.

During onboarding, the employee will decide how to contribute to the Provident Fund. Employees can choose to have their contributions calculated based on their basic monthly salary (40% of the gross monthly salary) or based on a fixed amount of INR 15,000. The employer costs for the Employee's Provident Fund (EPF) and the Provident Fund Office EPF Admin Fee will be calculated based on the employee's decision. The Employees' Deposit Linked Insurance (EDLI) cost will be 0.5% of INR 15,000 (INR 75) in both cases.

- Employee's Provident Fund (EPF): 4.8% of the employee’s monthly gross salary (12% of the basic salary) or  INR 1800
- Provident Fund Administrative Charges:  0.2% of the employee’s monthly gross salary (0.50% of the basic salary) or INR 75
-  Employees' Deposit Linked Insurance (EDLI): 0.5% of INR 15,000 (INR 75)

*Employees in India can choose their Provident Fund contribution, which needs to be matched by the employer. Employees can decide to contribute a percentage of their basic salary (40% of the employee's monthly gross salary) or a fixed fee. This will affect the employer costs.

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 can be done” at-will” (e.i. without cause) depending upon the employment agreement as long as required notice and severance are followed.

Compliant terminations include:

• Voluntarily by the employee
• By mutual agreement
• Unilaterally by the employer based on:
  • Probation period
  • Breach of duties and responsibilities
  • Gross default and misconduct contravening the terms and conditions of the agreement
• By the expiration of the contract

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

• Termination caused due to redundancy - Employees are entitled to severance pay worth 15 days' average pay for every 1 year of continuous service or part thereof in excess of 6 months
• Employees who are dismissed - Employers must pay termination benefits including leave accrued, gratuity payment (for employees with over 5 years of continuous service), payment in lieu of notice (if no notice is given), statutory bonus payment, and any other amounts due under the employment contract.
• Employees who are terminated due to misconduct - No entitlement to notice pay or severance pay

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