# Hiring in India: employment costs, payroll and compliance

> Machine-readable page from EOR Overview (https://eoroverview.com/), an independent research platform for Employer of Record services.
> Canonical page: https://eoroverview.com/hiring-guides/india/
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> Statutory data last updated: 2026-07-12. Every figure below carries its own source year.

## Country

| Field | Value |
|---|---|
| Region | Asia |
| Currency | INR (Indian Rupee) |

## Pay & working time

| Field | Value | Source year |
|---|---|---:|
| Minimum wage | ₹4,628 | 2024 |
| Statutory work week | 48 hours/week | 2024 |
| Payroll cycle | monthly | 2026 |
| 13th-month salary | mandatory | 2026 |

## Employer cost & tax

| Field | Value | Source year |
|---|---|---:|
| Employer social security | 19.8% | 2024 |
| Employee social security | 12.8% | 2024 |
| Corporate tax rate | 25.2% | 2025 |

## Termination

| Field | Value | Source year |
|---|---|---:|
| Notice period | 4.3 weeks | 2019 |
| Severance pay | 11.4 weeks | 2019 |

## Leave & time off

| Field | Value | Source year |
|---|---|---:|
| Paid annual leave | 12 days | 2026 |
| Public holidays | 17 days | 2026 |
| Maternity leave | 26 weeks | 2026 |
| Paternity leave | 0 weeks | 2026 |

## Labour market

| Field | Value | Source year |
|---|---|---:|
| Retirement age | 58 | 2024 |
| Unemployment rate | 4.2% | 2025 |
| GDP per capita | $2,695 | 2024 |
| Union density | 19.8% | 2017 |

## Overview

India's employer social security cost lands at 16.25% on top of gross salary, and for that you're covering a provident fund, a pension scheme, deposit-linked insurance, and state health insurance for lower-wage workers. That's a real bundle of statutory protections built into every employment relationship, not optional extras. The labour force here is enormous, over 617 million people, so talent access is rarely the problem. The compliance layer is where foreign employers need to pay attention.

Running payroll through an Employer of Record (EOR) in India means monthly pay cycles, a mandatory 13th-month salary, and 12 days of paid annual leave per year as the statutory floor. The minimum wage sits at 4,628 INR per month at the national reference level, though actual rates vary by state and sector, so your EOR needs to track the right floor for each worker's location. With a 48-hour statutory work week and a retirement age of 58, the framework is well-defined once you know where to look.

## Cost context

The 16.25% employer social security figure in India breaks down into four distinct contributions: 12% for the Employees' Provident Fund (EPF), of which 8.33% routes specifically into the EPS pension scheme; 0.5% for Employees' Deposit Linked Insurance (EDLI); 0.5% in EPF administrative charges; and 3.25% for Employees' State Insurance (ESI), which applies only to employees below the wage ceiling. Each piece has its own rules, and the ESI portion can drop out entirely for higher-earning employees, so the effective rate you pay depends on your specific hire's salary level.

## Things to watch

A few things in India's employment rules catch foreign employers off guard, so it's worth having these on your radar before you hire.

- Mandatory 13th-month salary. This is not discretionary. Budget for it from day one, because it's a legal obligation, not a bonus you can skip in a slow year.

- ESI wage ceiling matters. The 3.25% Employees' State Insurance contribution only applies to employees below a certain wage ceiling. If your hire earns above it, ESI drops out of the calculation entirely, which changes your cost model depending on who you're hiring.

- Severance adds up. At 11.4 weeks of pay, severance in India is meaningful. Factor this into your total cost of employment, especially if you're hiring for roles that may be project-based or short-term.

- Notice periods are real. The statutory notice period averages around 4.3 weeks, so you can't exit an employment relationship quickly. Plan your offboarding timelines accordingly.

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