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Phone, internet, and coworking costs can be reimbursed tax-free when they are business-related and supported by proper documentation. A tax invoice or receipt must show when and where you paid, the amount and currency, what service was purchased, and the employee’s name.
Employment in India
Minimum wage
INR 17,500
Employer costs
7.60%
Employee contribution
0–12%
Employee tax
0–30%
In India, the indicative minimum wage in this dataset is 17,500 INR per year. Typical employer payroll costs are illustrated by components such as provident fund contributions, gratuity provision, and EDLI, with an overall employer burden shown at 7.60%. Employees face income tax that is progressive, with an indicative range of 0–30%, and may also be subject to health and education cess and surcharge. Employee-side payroll deductions in this dataset are shown in a 0–12% range, depending on individual circumstances.
Onboarding time
We can help you get a new employee started in India fast. The minimum onboarding time we need is only 48 hours. Our team ensures fast, compliant employee onboarding and payroll processing. The onboarding timeline starts once the employee submits all required information via the NEO platform.
Payroll
Payroll in India includes employer-side costs such as provident fund contributions, gratuity provision, and EDLI, alongside employee-side deductions like health and education cess and surcharge. The figures below are indicative headline ranges from this dataset and do not represent a single flat rate for all employees or employers.
Employer payroll costs
| Component | Notes |
|---|---|
| Pf contribution | Part of statutory retirement-related costs |
| Gratuity provision | Provision for statutory gratuity obligations |
| Edli | Linked to employee deposit-linked insurance |
Illustrative employer payroll burden (headline)
7.60%
Employee payroll deductions
| Component | Notes |
|---|---|
| Health education cess | Applied in addition to income tax |
| Surcharge | Applied in addition to income tax for certain income levels |
Illustrative employee payroll range (headline)
0–12%
Minimum wages
Indicative annual minimum wage
17,500 INR
Working hours
Standard working time in this Indian framework is based on a five-day workweek. Employers should ensure that weekly hours and scheduling comply with these parameters and any applicable local regulations.
Standard working hours
| Work pattern | Hours | Working days |
|---|---|---|
| Full-time | 48 per week | Monday to Friday |
Leave
Indian employees under this framework have separate policies for general paid time off and sick leave. Each policy has its own accrual pattern, carryover rules, and, for sick leave, medical certificate requirements.
Leave policies
| Type | Accrual | Carryover | Maximum accrual | Medical certificate |
|---|---|---|---|---|
| Paid time off | 15 days per year | No carryover | Not specified | Not required |
| Sick leave | 1 day per month | Carryover allowed | Up to 45 days | Required from day 3 of illness |
Public holidays
India observes a mix of national, religious, and cultural public holidays. The list below shows key nationwide holidays for 2026 that employers should plan around for scheduling and staffing.
Public holidays 2026
| Date | Holiday |
|---|---|
| 2026-01-26 | Republic Day |
| 2026-03-04 | Holi |
| 2026-03-20 | Eid al-Fitr |
| 2026-04-03 | Good Friday |
| 2026-05-27 | Eid al-Adha |
| 2026-08-15 | Independence Day |
| 2026-10-02 | Gandhi Jayanti |
| 2026-10-21 | Dussehra |
| 2026-11-08 | Diwali |
| 2026-12-25 | Christmas Day |
Expenses
India does not set a statutory deadline for submitting expenses, and both current and prior year expenses can still be submitted and approved, subject to company policy. Employees are encouraged to submit claims promptly so reimbursements can be processed in a timely manner.
Submission deadlines
| Expense type | Action and timing |
|---|---|
| Current year's expenses | No fixed deadline; submit promptly |
| Prior year's expenses | May still be submitted and approved; submit promptly |
All expenses must be reviewed and approved by the employee's manager. Expenses submitted without the necessary documentation will be treated as taxable.
Communication and workspace
| Expense | Taxation |
|---|---|
| Phone subscription | Non taxable |
| Internet subscription | Non taxable |
| Coworking | Non taxable |
Equipment and supplies
Work equipment and office supplies are generally reimbursed on a non-taxable basis when supported by a tax invoice or receipt that clearly shows the date, amount, merchant, description of the item or service, and the employee’s name where applicable.
| Expense | Taxation |
|---|---|
| Laptop | Non taxable |
| Office equipment | Non taxable |
| Office supplies | Non taxable |
| Software subscription | Non taxable |
| Postal charges | Non taxable |
Travel
Business travel costs are typically reimbursed tax-free when backed by appropriate documents such as tax invoices, receipts, tickets, or booking confirmations that show the date, amount, merchant, description, and the employee’s name where required. Mileage claims must include a detailed travel log; if these details are missing, the payment is treated as a taxable allowance. Public transport within India or abroad requires receipts below INR 2,000 and a tax invoice above that amount, with the employee’s name on the tax invoice.
| Expense | Taxation |
|---|---|
| Business travel insurance | Non taxable |
| Visa fee | Non taxable |
| Accommodation | Non taxable |
| Flight | Non taxable |
| Taxi or rideshare | Non taxable |
| Train | Non taxable |
| Public transport (India or abroad) | Non taxable |
| Car rental | Non taxable |
| Fuel | Non taxable |
| Mileage | Non taxable with full travel log; Taxable if no supporting documents |
| Parking or toll fees | Non taxable |
Meals and entertainment
Everyday meals, groceries, and business meals with clients or partners can be reimbursed on a non-taxable basis when they are business-related and supported by detailed documentation. Claims should be backed by a tax invoice or receipt, and for card or app-based orders, order details and payment confirmations may also be required, especially for expenses incurred abroad.
| Expense | Taxation |
|---|---|
| Breakfast, lunch and dinner | Non taxable |
| Groceries | Non taxable |
| Meal with client or partner | Non taxable |
Other expenses
A range of other business-related costs can be reimbursed, generally on a non-taxable basis when supported by proper tax invoices or receipts that show the date, amount, merchant, description, and the employee’s name. Medical insurance and medical costs have specific tax treatments depending on whether the employee is already covered by employer-provided insurance and whether the costs are recurring.
| Expense | Taxation |
|---|---|
| Training, courses, and books | Non taxable |
| Promotional items | Non taxable |
| Gifts | Non taxable |
| Medical insurance | Non taxable if no employer-provided cover; Taxable as an allowance if employer cover exists |
| Medical cost | Recurring costs taxable as an allowance |
| Utilities | Non taxable |
Per diem is not used in India under this framework. Employees should submit actual expenses with supporting documentation for approval and reimbursement.
Allowances
Allowances in India can be offered on a one-time or recurring basis, and are typically discretionary benefits such as work-from-home support, wellness, or insurance-related payments. When a payment is treated as an allowance rather than a reimbursed business expense, it is taxable, and employers may choose whether to gross up the amount if there is no supporting documentation.
The allowances listed here are optional and may be offered to one or more employees entirely at the employer’s discretion. All of them are treated as taxable income when paid as allowances.
| Type | Status | Taxation | Limitations |
|---|---|---|---|
| Work from home allowance | Optional | Taxable | May be offered selectively at employer's discretion |
| Gym membership | Optional | Taxable | May be offered selectively at employer's discretion |
| Life insurance | Optional | Taxable | May be offered selectively at employer's discretion |
| Relocation | Optional | Taxable | May be offered selectively at employer's discretion |
| Wellness | Optional | Taxable | May be offered selectively at employer's discretion |
Termination
Indian employment arrangements typically include both a probation period and a notice period for termination. The exact terms may vary by contract, but the figures below illustrate common parameters in this framework.
Termination-related policies
| Policy | Standard duration | Notes |
|---|---|---|
| Notice period | 30 days | At least 7 days during probation |
| Probation period | 0–270 days | Exact length set in the employment contract |
