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Your Guide to Hiring Employees and Contractors in India

Capital city

New Delhi

Currency

Indian rupee (₹, INR)

Language(s)

English, Hindi, and 22 Regional Languages

Ease of doing business

Easy

Payroll frequency

Monthly

Employer taxes

16.75%

Payroll

Monthly Payroll

All employee payments will be made in equal monthly installments on or before the last working day of each calendar month, payable in arrears

Minimum Wage Requirements:

The national minimum wage in India is fixed by the respective state governments. It uses a complex method of setting minimum wages that defines thousands of different jobs for unskilled workers and over 400 categories of employment, with a minimum daily wage for each type of job.

Individual Income Tax:

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 following information reflects the New Personal Tax Regime (NPTR) effective 01 April 2020, based on gross annual income:

Income up to INR 2,50,000

Tax rate: Exempt

Income between 2,50,001 – 5,00,000

Tax rate: 5%

Income between 5,00,001 – 7,50,000

Tax rate: 10%

Income between 7,50,001 – 10,00,000

Tax rate: 15%

Income between 10,00,001 – 12,50,000

Tax rate: 20%

Income between 12,50,001 – 15,00,000

Tax rate: 25%

Income above 15,00,000

Tax rate: 30%

Employer Cost:

The employer cost is generally estimated at 13.0% of the employee salary.

Employees’ Provident Fund – 3.67%

Employees’ Pension Scheme – 8.33%

Administrative charges – 1.0%

Working Hours

Work Week

Monday to Friday.

Overtime Pay & Maximum Hours

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.

Employment Termination

The termination process is standard in India, with notice periods required unless an employer can provide sufficient cause for dismissal without notice due to misconduct, disobedience, lack of skill, neglect of duties, or absence without permission.

Notice period:

The notice period required is at least 30 days.

Probation periods:

Probation periods in India generally differ based on the employee’s role and their seniority, being between 3 and 6 months.

These details are subject to change by the respective government and regulatory authorities in each country.

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