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India has a comprehensive system of social security schemes and mandatory benefits designed to provide financial security and healthcare to employees and their families. These benefits are primarily governed by the Employees' Provident Funds and Miscellaneous Provisions Acts of 1952, and the Employees' State Insurance Act of 1948.
Statutory benefits include EPF/EPS, ESI (for eligible wages), gratuity, statutory bonus (eligibility‑based), paid leave and public holidays, and maternity benefits. Additional benefits are commonly provided by employers via policy (medical insurance, term life, allowances).
Employees and employers each contribute 12% of basic salary plus dearness allowance towards retirement and pension savings, with part of the contribution funding the Employees’ Pension Scheme (EPS) up to the statutory wage ceiling. Non-payment can result to interest and penalties.
Social insurance in India provides coverage for sickness, maternity, disability, and death due to employment injury for employees earning up to ₹21,000 per month, with employers contributing 3.25% of gross wages and employees contributing 0.75%.
Gratuity is a statutory severance benefit paid upon separation after five years of continuous service, calculated as 15 days’ wages for each completed year, with exceptions allowing earlier payment in cases of death or disablement.
Employees in India are entitled to earned or privilege leave accruals set by state laws, sick and casual leave under the Shops & Establishments Acts, three national holidays plus additional state-notified festival days, and maternity benefits of 26 weeks.
Group medical, accident, and life insurance are common supplementary benefits offered by employers in India, with some companies also providing outpatient, dental, and vision coverage, though these are less common.
Common allowances and reimbursements include internet/telecom, meal benefits (₹50/meal exemption under old regime), fuel/driver/company car, education assistance.
Equity and variable pay in India often include ESOP or RSU grants, performance-based bonuses, and supplemental retirement contributions under the National Pension Scheme (NPS) 80CCD(2).
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