Employee Benefits in India

Bonuses and additional payments 

In India, the Payment of Bonus Act of 1965 mandates a minimum annual bonus of 8.33% of annual wages for certain workers. The maximum bonus allowed by law is 20%, and the percentage the employer applies for must be the same for all eligible employees. Those who earn higher wages/salaries may receive the “13th month pay” as a bonus, though this is not mandatory. 

Annual leave  

For non-factory employees, vacation leave entitlements, referred to as "annual" or "privilege" leave, are governed by the Shops and Establishments Act and vary from state to state, but workers can expect at least 15 days of leave each year. 

Factory workers, protected by the national Factories Act, receive one day off for every 20 days worked (up to a maximum of 12 days off).   

Employees also receive “casual leave,” which is typically five to 12 days per year for unplanned absences.  

Sick leave 

Personal and sick leave are generally governed by the Shops and Establishments Act. Each state in India separately defines sick leave and employee entitlements vary from seven to 12 days. 

In the manufacturing sector, sick leave is governed by the Industrial Employment Act and employees are entitled to up to 10 days of leave. 

Maternity leave  

Employers must provide 26 weeks of paid leave during an employee's first two pregnancies and 12 weeks of paid leave for any additional child as well as for adoptive and surrogacy-commissioning mothers. 

Pregnant employees who have worked for an employer for at least 80 days in the 12 months prior to the date of expected delivery are eligible for benefits, with written notice seven weeks before the due date.