Foundational

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Income Protection & Disability

Key Features – How Does It Work?

In India, income protection insurance or disability insurance is not a common component of an employee benefits offering. Instead, the focus is on insurances which offer a lump sum payout rather than ongoing income replacement. This typically includes policies such as group health insurance, life cover, and personal accident or critical illness policies.

There is a statutory disability benefit under the Employees’ State Insurance scheme. This includes both a temporary and permanent disability benefit for employees injured at work.

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Life Insurance

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Key Features – How Does It Work?

Group life insurance provides a lump sum payment to designated beneficiaries if an employee passes away during the coverage period. In India, this typically operates as a term insurance plan, with a predefined sum insured as part of the policy agreement. This coverage amount may differ between employees, determined as a multiple of annual salary. It may also vary based on seniority or tenure at the company. Life insurance is commonly bundled with critical illness and personal accident cover.

Cost and Funding

The cost of a group life insurance policy is lower than individual life insurance policies and has fewer barriers to entry, with no requirement for medical examinations. This insurance benefit is typically funded by the employer, who is responsible for paying the premiums, with an option for employees to pay an additional contribution for an enhanced policy.

Taxation

For employers, the premiums paid for life insurance are usually tax-deductible as a business expense. For employees, the premium may be considered a perquisite and subject to income tax, depending on how the policy is structured. If the employee pays a part or all of the premium, this will be deductible.

For recipients of the benefit, any payout from a claim is tax-free.

Implementation and Administration

Employers should select an insurance provider that suits their needs and agree on policy terms. Once agreed, the employer is responsible for communicating information about the policy to employees, and sharing the employees’ information with the insurance company. This includes updates on onboarding and leaving employees. Most policies operate on an annual renewal basis, which allows employers to negotiate terms. Any claims are processed and paid by the insurer.

Other Considerations

Flexibility is becoming increasingly popular, allowing employees to choose a policy that suits them, including additional coverage or the addition of family members. The policy only applies when the employee works for the employer who holds the insurance. Employers should communicate what happens to the policy when an employee leaves the company.

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Private Health Insurance

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Key Features – How Does It Work?

India operates a universal health care model that offers free public health care to citizens. In practice, however, the private sector is responsible for the majority of care with a number of government incentives to support its expansion.

Private health insurance gives employees access to medical treatment in the private sector. Basic policies typically include preventive check-ups, hospitalisation, emergency care, outpatient care, and maternity care.

The government-based insurance programme, Ayushman Bharat Yojana, covers low-income workers. States and territories had to choose to participate, which means it does not offer full coverage, though some states have implemented their own programmes.

Cost and Funding

The policy is purchased by the employer who is responsible for paying premiums. Most employers will fully fund the insurance, though some operate a cost-sharing model that allows employees to enhance their coverage or add dependents.

Taxation

For employers, the premiums paid for health insurance are usually tax-deductible as a business expense. For employees, the premium is not considered a perquisite, which means it is exempt from income tax. If the employee pays a part or all of the premium, this would be tax deductible.

Implementation and Administration

Employers choose a health insurance provider and agree on policy terms. For smaller companies, this is likely to be a basic plan, whereas for larger companies, they offer premium packages. HR or payroll is typically responsible for managing enrolment for employees and communicating with the insurer. Once registered, an employee works directly with the insurer (or TPA) to access providers, track coverage, and submit claims. Most insurance companies now offer this via an online portal.

In India, Third-Party Administrators (TPAs) act as intermediaries between insurance companies and policyholders, streamlining policy management. Their duties include issuing identity cards, operating 24-hour helplines, providing hospital authorisation letters, and processing healthcare payments. Employers using TPAs should direct their employees to these services.

Other Considerations

It is important for employers to clearly communicate the details of the health insurance policy to employees, including what is covered, any exclusions, and what happens to the policy when an employee leaves the company. Given that health insurance in India operates on a network model, employers should also ensure that suitable network providers are available in all locations where their employees are based.

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Retirement Funds

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Key Features – How Does It Work?

India has a layered retirement system that combines compulsory state schemes with optional employer and individual contributions. The National Social Assistance Scheme is a non-contributory state pension for the elderly poor. The National Pension System is compulsory for civil servants and voluntary for others.

In the private market, all employers with 20 or more employees are covered under the EPF Act, which is administered by the Employees’ Provident Fund Organisation (EPFO). This is voluntary for smaller companies. Under this system, retirement contributions are split between two schemes. The Employees’ Provident Fund (EPF) functions as an individual retirement account. The Employees’ Pension Scheme (EPS) is a state-managed pension. Employees are required to contribute 12% of their basic salary plus dearness allowance. This full amount goes into their EPF account. Employers also contribute 12%. Of this, 3.67% goes to the employee’s EPF, and the remaining 8.33%, capped at ₹1,250 per month, is directed to EPS.

The EPF is contribution-based, and the full accumulated amount is available to the employee upon retirement. The EPS is an eligibility-based public pension scheme. It pays a monthly pension to all qualifying retirees, and the amount depends on the pensionable salary and the completed years of service.

Most employers use the standard EPF model. However, they may choose to establish an exempted provident fund through a private trust. In that case, the fund is managed internally rather than by the EPFO. Even then, employers must meet the statutory compliance requirements, and the 8.33% EPS contribution, up to the cap, must still be paid into the public system.

Some employers offer additional pension or retirement products as part of their benefits package. These are intended to complement the existing statutory schemes. The most common of these are group superannuation schemes, where employers contribute a defined amount to a superannuation fund managed by an insurer.

Cost and Funding

The compulsory nature of the pension system means that most employers consider this part of payroll expenses. The contribution amount of 12% should be accounted for by both employer and employee. There are additional administrative fees that are paid by the employer for the running of EPF accounts.

If offering a superannuation account, the employer contributes a fixed percentage, up to 15%. The employee can also choose to make contributions.

Taxation

Employer EPF contributions are tax-free up to 12% of an employee’s income. Employee contributions are made from taxable income, but can be deducted up to ₹1.5 lakh per year. The EPF is also exempt from tax on interest earned, provided the interest rate does not exceed 9.5% and the employee’s annual contribution does not exceed ₹2.5 lakh, and on withdrawal after five years of service. The EPS has different treatment, with any amount disbursed taxable as income.

Employer contributions to a superannuation fund are tax deductible as a business expense. It will be tax-free for an employee up to ₹1,50,000. Any amount above this is considered a perquisite and subject to income tax. If the employee chooses to contribute, this amount may also be a deduction.

Implementation and Administration

Employers with more than 20 employees must register with the EPFO. This includes those that are self-managing a scheme, as EPFO still has an oversight role. Employers are responsible for the administration of the scheme, including deducting contributions from employees payroll and transferring contributions. The EPFO runs a unified portal which allows employees to track their individual fund.

Other Considerations

EPF schemes have historically offered higher returns compared to private funds, which has led some companies to return to the public system. When leaving a company, because EPF accounts belong to an individual employee, they can be transferred between employers. For private funds or superannuation accounts, employers should clearly outline any transfer processes when employees leave the company.

The Atal Pension Yojana (APY) is another offering in India. This is a more recent initiative, launched in 2015, for workers who are not covered by formal retirement systems. It allows subscribers to pay monthly contributions directly to the government scheme, and gives them a monthly pension upon retirement. This exists outside the formal employee benefits landscape.

Family

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Assisted Reproduction

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Key Features – How Does It Work?

In India, assisted reproduction is becoming a popular way for companies to attract and retain talent. Most employers offer support through direct financial support or through health insurance policies that cover fertility treatments. Both options give employees access to a range of treatments, including IVF, IUI, and egg or sperm freezing, as well as surrogacy support. Many companies also offer flexible working and additional leave to support employees undergoing treatment.

Cost and Funding

The cost to the employer depends on how the benefit is structured. If employers extend health insurance to include assisted reproduction, they usually pay higher premiums. If they offer financial support, they often set an annual or lifetime limit that employees can use. In both cases, employers tend to share the cost with employees, either through co-pays or capped reimbursements.

Taxation

Contributions towards employee health insurance premiums, including those covering fertility treatments, are generally tax-deductible as a business expense. For employees, the premium is not considered a perquisite, which means it is exempt from income tax. If an employer provides direct financial assistance for fertility procedures outside of an insurance framework, these payments will be considered taxable perquisites and subject to income tax.

Implementation and Administration

Employers should decide how to provide this benefit in a way that best serves its workforce. A fixed financial contribution can be managed internally, while insurance policies will need to be organised through a third-party. Both should include a clear policy on who is eligible for support and any limits. Some companies may also partner with fertility providers.

Other Considerations

Employers should make sure their benefits comply with India’s laws on assisted reproduction and surrogacy. Benefits should also be inclusive of all employees, regardless of gender, marital status, or sexual orientation. Offering counselling or mental health support, as well as flexible working, can ensure employees are supported through their journey.

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Carer's Support

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Key Features – How Does It Work?

In India, carer’s support, targeted towards employees who are caring for elderly family members, is an emerging area within corporate wellbeing strategies. While not yet standard, a growing number of large employers now offer eldercare leave, counselling services, and access to care coordination platforms that help manage medical appointments, emergency services, and day-to-day assistance for dependents. These offerings are usually paired with flexible working arrangements to help employees balance work and caregiving duties more effectively.

Cost and Funding

Employers typically fund carer’s support through subscriptions to eldercare service platforms, which are priced annually or per employee. Costs will vary depending on the level and extent of support. Basic packages may include online consultations and emergency assistance, while more comprehensive options may cover home visits, care assessments, and coordination of ongoing services. Employers may also choose to subsidise part of the care costs or cover specific services through a capped benefit structure.

Taxation

If the employer directly provides access to caregiving services for all employees, it is generally not treated as a taxable benefit under Indian tax law. However, if the employer offers reimbursements or direct payments to individual employees for dependent care, this may be considered a taxable perquisite and included in the employee’s income.

Implementation and Administration

HR teams are typically responsible for managing the relationship with a third-party provider. They should communicate the benefit to staff and ensure employees can self-enrol or request services directly through the provider. Where financial support is involved, payroll teams usually process claims and monitor usage. An employer should have clear internal policies to define eligibility, limits, and privacy safeguards.

Other Considerations

Because caregiving needs differ widely between individuals, employers should build flexibility into the benefit structure. Support should be inclusive and accessible regardless of the employee’s gender, marital status, or family structure. Where possible, employers should align with government services and schemes to avoid duplication. Ensuring confidentiality and protecting employee data are also critical when dealing with personal and family health matters.

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Childcare Support

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Key Features – How Does It Work?

Every company employing 50 or more employees must set up a crèche within a prescribed distance of the place of work or of the employee’s neighbourhood. This may take the form of building the facility or partnering with a third-party childcare provider. The facilities must be available to all female employees regardless of their employment contract, and must cater to children up to 6 years of age. Women must be informed of the facility when they start at the company.

Cost and Funding

Employers are responsible for the cost / expenditure for providing crèche facilities. They should come at no cost to the employee.

Taxation

Employer spending on crèche facilities is treated as a deductible business expense under the Income Tax Act. The provision of a crèche is not specifically excluded from the definition of a taxable perquisite, which means it may be considered part of the employee’s taxable income. If an employer partners with a provider, the cost per employee is easier to calculate. When running their own facility, it may be harder to attribute specific costs to individual employees for tax purposes. In practice, this means treatment may vary depending on how the benefit is structured.

Implementation and Administration

Employers can meet the requirement either by setting up an on-site facility, establishing a near-site option, or partnering with a third-party provider. HR teams are responsible for ensuring that the service is available, accessible, and complies with relevant state-level rules. Companies should maintain records of usage, costs, and communication with employees.

Other Considerations

While the requirement is federally mandated, the compliance is done at a state level. There are some reports that this practice has not been widely implemented. If operating an on-site facility, employers should ensure that the crèche is staffed with qualified caregivers and meets safety and hygiene standards as outlined in local regulations.

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Spouse & Partner Critical Illness Cover

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Key Features – How Does It Work?

In India, it is common for employers to extend group insurance benefits, including critical illness cover, to an employee’s family members, often encompassing spouses, children, and parents. This is typically offered as a voluntary add-on at the employee’s expense, although some employers may subsidise premiums or include dependants at a lower insured sum than the employee. Coverage terms for family members usually mirror the employee’s policy in terms of covered conditions and exclusions. Employees are generally given the option to enrol family members at the point of joining the policy.

Cost and Funding

The cost of premiums may vary depending on the age and health of dependants, particularly in the case of parents. In most cases, the employer is able to select the level of cover, which will impact the cost. The inclusion of dependants on a group policy makes premiums more affordable than individual policies.

Taxation

For employers, premiums paid for insurance are generally tax-deductible as a business expense. For employees, if the employer covers the cost, it is treated as a taxable perquisite and subject to income tax. When employees fund the premium themselves, it is usually deducted from post-tax income. They can claim the amount of the premium as a tax deduction, subject to separate limits for spouse or children, and for parents. If the critical illness cover is structured as a rider within a life insurance policy, any lump sum payout would typically be exempt from tax, in line with the broader tax treatment of life insurance.

Implementation and Administration

Dependants can be added to a critical illness policy during enrolment periods. HR teams are typically responsible for managing enrolment and communicating the details of any policy to employees, including the process for opting in. Once enrolled, administration is usually managed through an online portal, where employees can access policy information and manage claims. Payouts are handled directly by the insurance provider.

Other Considerations

Critical illness policies are prescriptive about covered illnesses, as well as the application of any waiting and survival periods. Employers should communicate this information clearly and emphasise the importance of checking exclusions. Depending on the age and health of the dependants, there may be some medical underwriting required.

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Spouse & Partner Life Insurance

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Key Features – How Does It Work?

In India, it is common for employers to extend group insurance benefits, including life insurance, to an employee’s family members, such as spouses, children, and parents. This is typically offered as a voluntary add-on funded by the employee, although some employers may subsidise the cost or offer cover for dependants at a lower insured sum than the employee. Employees are generally given the option to enrol family members during initial enrolment or renewal periods. The coverage amount is usually offered as a fixed lump sum.

Cost and Funding

The cost of premiums may vary depending on the age of dependants, particularly in the case of parents. In most cases, the employer is able to select the level of cover, which will impact the cost. The inclusion of dependants on a group policy makes premiums more affordable than individual policies. Dependant life insurance is typically funded by the employee through payroll deductions.

Taxation

For employers, premiums paid for insurance are generally tax-deductible as a business expense. For employees, if the employer covers the cost, it is treated as a taxable perquisite and subject to income tax. When employees fund the premium themselves, it is usually deducted from post-tax income. They can claim the amount of the premium as a tax deduction under the old tax regime, subject to separate limits for spouse or children, and for parents. This deduction is not available under the new tax regime. Any lump sum payout from a life insurance policy would typically be exempt from tax.

Implementation and Administration

Dependants can be added to a life insurance policy during enrolment periods. HR teams are typically responsible for managing enrolment and communicating the details of any policy to employees, including the process for opting in. Once enrolled, administration is usually managed through an online portal, where employees can access policy information and manage claims. Payouts are handled directly by the insurance provider.

Other Considerations

The policy only applies while the employee remains with the employer who holds the insurance. Employers should clearly communicate what happens to the cover when an employee leaves the company. Depending on the age and health of the dependants, some medical underwriting may be required.

Finance

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13th Month Pay

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Key Features – How Does It Work?

In India, there is a statutory requirement to pay bonuses to certain lower-income workers in companies that employ 20 or more workers. Employees who have worked for at least 30 days and earn less than ₹21,000 per month are eligible. The bonus amount is determined by the employer’s performance during the accounting year, with a minimum of 8.33% of salary or ₹100, whichever is higher, and a maximum of 20%. Many employers disburse this bonus around the Diwali festival, leading to its common reference as the Diwali bonus. In addition to the statutory requirement, some companies choose to offer a separate Diwali bonus as a discretionary benefit for all staff.

Cost and Funding

Employers bear the full cost of statutory bonuses. The total cost will vary each year depending on the company’s performance and the number of eligible employees. Companies usually budget for these amounts as part of their operational costs.

Taxation

In India, bonuses are treated as part of an employee’s income and are subject to income tax. However, most statutory bonus recipients earn less than the basic exemption limit under the current tax regime. As a result, while the bonus is technically taxable, it usually does not affect the tax liability of lower income earners.

Implementation and Administration

A bonus is organised internally and completed via payroll. Employers can use payroll software to calculate who is eligible for the statutory bonus and the amount owed.

Other Considerations

Diwali bonuses have become an important cultural benefit, helping workers cover expenses like gifts and celebrations. It is best practice to have a clear policy on bonus eligibility, especially for companies that offer more than the statutory requirement.

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Critical Illness Cover

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Key Features – How Does It Work?

Critical illness insurance is a type of coverage that provides a lump sum payout to an employee upon the diagnosis of a serious medical condition. Policies tend to have a waiting period before commencement of cover and a survival period. In India, these policies are typically bundled with life insurance. They can be offered by the employer or as an additional voluntary benefit.

Cost and Funding

Most employers will purchase these policies as add-ons or riders, which makes them cheaper than purchasing a new policy. Combined with group pricing, it makes this insurance a low-cost addition to a benefits package.

Taxation

For employers, the premiums paid for insurance are usually tax-deductible as a business expense. For employees, the premium would be a perquisite, which means it is subject to income tax. If the employee pays a part or all of the premium, they can claim this amount as a tax deduction under the old tax regime. This deduction is not available under the new tax regime. Life insurance lump sum payouts qualify for a tax exemption, so if operating as a rider, critical illness cover would also enjoy tax-free treatment.

Implementation and Administration

Most employers will hold a group life insurance policy to which they can add critical illness cover. HR teams are typically responsible for managing employee enrolment and communicating the details of any policy to employees. This should include any process for opting into an agreement if it is voluntary. Once enrolled, administration is usually managed through an online portal, where employees are able to access policy information and manage claims. Payouts are handled directly by the insurance provider.

Other Considerations

Critical illness policies are prescriptive about covered illnesses, as well as the application of any waiting and survival periods. Employers should communicate this information clearly and emphasise the importance of checking exclusions. There may be some medical underwriting required for certain groups based on age or health.

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Earned Wage Access

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Key Features – How Does It Work?

Earned wage access allows employees to request a portion of their already earned salary before the usual payday. The advance is only available for wages that have been accrued, and employers can set limits on how much can be withdrawn ahead of the regular pay cycle. Funds are typically transferred directly to a bank account or to a prepaid debit card. The service is usually managed through a third-party app, giving employees an easy way to track their earnings and access their pay.

Cost and Funding

Earned wage access platforms tend to be free for employers. Instead, most providers charge the employee a flat fee per transaction for accessing funds. Because the disbursed amount is from wages already earned, there are no interest charges or similar fees.

Taxation

Funds accessed through earned wage access are considered part of regular salary and are subject to the same tax rules. The process of tax deduction depends on the provider’s integration with payroll systems. Some platforms calculate and deduct applicable taxes at the time of disbursement, with the net amount transferred to the employee. If this functionality is not available, and no tax is deducted during disbursement, the full salary is processed at the end of the pay cycle, with income tax calculated on the total amount. Integrations with HR and payroll systems ensure accurate tracking and compliance with tax regulations.

Implementation and Administration

Employers should work with an earned wage access provider to offer this benefit. Implementation involves integrating the platform with existing payroll and HR systems. Once set up, employees can register directly and manage their requests through the provider, who handles disbursements.

Other Considerations

Employers should communicate that this is a voluntary benefit and explain how early withdrawals may impact the employee’s regular pay amount. To enhance the effectiveness of earned wage access and help employees make informed financial decisions, employers can provide complementary resources such as financial coaching, budgeting tools, or workshops on money management.

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End of Service Pay

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Key Features – How Does It Work?

In India, gratuity is a form of statutory payment made to employees as a reward for long-term service. It applies to most private companies with 10 or more employees. The gratuity is payable when an employee leaves a company, whether through resignation, retirement, or termination, if they have completed at least five years of continuous service. If an employee dies during service, the five-year requirement is waived. The amount is calculated as 15 days’ pay for every year of service completed, based on the salary at the time of leaving. The maximum gratuity is ₹20 lakh.

Cost and Funding

Employers are responsible for funding gratuity payments. Some companies partner with a third-party insurance provider that offers a group gratuity plan. This allows employers to contribute regular amounts to ensure they can finance these payments.

Taxation

The gratuity payment is tax-free for the employee up to the maximum gratuity amount, currently ₹20 lakh. Any amount above this would be considered income and subject to tax.

Implementation and Administration

Employers must ensure that paying gratuity is part of their exit process. The payment is typically managed through payroll systems. If the employer has set up a gratuity trust or uses an insurer, the disbursement process may be handled in coordination with that provider. In the event of death, gratuity is paid to the employee’s nominee or estate.

Other Considerations

Employers must ensure they have sufficient funds to pay gratuity. It is helpful to clearly explain the eligibility, calculation method, and payout process to employees to avoid any confusion.

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Financial Advice & Coaching

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Key Features – How Does It Work?

Financial advice and coaching aim to enhance employees’ financial literacy and support better money management. Employers typically partner with fintech platforms or advisory firms to offer personalised guidance on budgeting, debt management, and investment planning. These services may include workshops, one-on-one sessions with an advisor, or access to digital resources. This benefit is increasingly delivered via online platforms, making it accessible to a broader workforce.

Cost and Funding

The cost of providing financial advice and coaching services is typically borne by the employer. Employers may engage external financial advisors or platforms to deliver these services, with costs varying based on the scope and delivery method. Digital tools provide a cost-effective way for employers to offer this benefit at scale, with group rates and packages, while personalised one-on-one coaching sessions are a more premium benefit. Some employers may offer this as a voluntary benefit which is paid for by the employee.

Taxation

In India, the tax treatment will depend on how this benefit is offered. Services that are part of a wider programme, offered to all employees, are likely to be considered a business expense and not taxable for the employee. However, if offered as a specific, personal benefit, this is likely to be considered a perquisite for the employee and subject to income tax.

Implementation and Administration

Employers should select a provider and service level that aligns with their organisation’s goals and workforce needs. HR teams typically manage the administration, including promoting the benefit, coordinating any workshops, and sharing guidance on how to access the service. Employees can usually log in to the provider’s digital platform directly to browse resources or book one-to-one sessions.

Other Considerations

Employers should make sure the benefit is accessible to all employees, taking cultural, linguistic, and regional differences into account. It is important to embed financial advice and coaching within a broader financial wellbeing strategy and consider how it complements other offerings, such as retirement benefits.

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Personal Accident Cover

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Key Features – How Does It Work?

Personal accident cover is a common employee benefit that provides financial protection in case of accidental death or disability. Coverage usually extends beyond the workplace, offering protection for accidents that occur outside of work. When an employee or a covered family member suffers an accident, the policy pays out a lump sum based on the severity of the injury. In India, it is typically employer-funded as part of a group policy.

Cost and Funding

Premiums for personal accident cover are determined by factors such as the number of employees covered, the nature of their occupations, and the sum insured. It is generally cost-effective for employers when offered as a group policy. Employers tend to fund coverage for their employees, with the option to add dependants as a voluntary benefit.

Taxation

In India, premiums paid by employers for group personal accident insurance should be considered a business expense and are tax-deductible. From the employee’s perspective, the premium is typically not treated as a taxable perquisite when the policy is provided uniformly to all employees and serves a business purpose, such as covering accidental risks broadly. However, if the cover is extended selectively or is structured in a way that provides a personal benefit to specific employees, the premium may be treated as a taxable perquisite. Payouts received from an insurance policy are usually tax-free.

Implementation and Administration

Most employers will hold a group personal accident insurance policy that covers all employees by default. HR teams are typically responsible for managing enrolment records and communicating the details of the policy to employees. This includes outlining the scope of coverage, eligibility, and the claims process. Once the policy is active, administration is generally handled through an insurer-provided portal, where employees can access policy documents and submit claims if needed. Payouts are processed directly by the insurance provider.

Other Considerations

When offering personal accident insurance, employers should ensure the policy provides comprehensive coverage that meets the needs of their workforce, including accidents that occur outside of work. It should be accessible to all employees, keeping in mind the different needs and backgrounds across a workforce. It is important to clearly communicate the details of the coverage, including the benefits, exclusions, and the claims process.

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Will Writing

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Key Features – How Does It Work?

Will writing is an emerging employee benefit in India, offered as part of broader financial wellness programmes. It gives employees access to tools and support to create a legally valid will, helping them plan how their assets will be distributed. Employers typically partner with estate planning providers that offer digital platforms, legal templates, and expert consultations. It may also be offered in partnership with insurance companies as part of a life insurance policy.

Cost and Funding

Will writing services typically operate a partnership model, with no upfront costs and fees charged only for advice. The cost of the service can be covered by the employer, subsidised, or made available as an optional benefit under a flexible benefits scheme. Digital platforms are generally affordable and easy to scale, with tiered pricing models so employees can choose the option that suits them best.

Taxation

In most cases, will writing services are an employee-funded benefit. If they are funded or subsidised by the employer, the value of the benefit would be considered a perquisite for the employee and subject to income tax.

Implementation and Administration

Employers usually implement will writing services through third-party providers that offer online platforms. HR teams are responsible for communicating the availability of the benefit, guiding employees on how to access it, and coordinating with the provider. The service may include guided online forms, helplines, or legal reviews, depending on the plan.

Other Considerations

Employers should ensure any platform is easy to use, available in multiple languages, and culturally accessible. There should be options for all employees whatever their financial situation or estate planning requirements. Regular communication about the service, including positioning it as an important financial planning tool, can help employees make the most of this benefit.

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Workplace Loans

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Key Features – How Does It Work?

In India, workplace loans are increasingly being offered through partnerships with platforms that are focused on employee financial wellbeing. These platforms allow employees to apply for personal loans with payroll integration features that mean repayments are deducted from the employee’s salary.

Some companies may offer loans directly to employees. In this case, there should be a clear written policy on eligibility and repayment, and the process is managed via payroll.

Cost and Funding

Loan platforms are typically free for employers, with fees charged to employees when they access the service. The loan amount is funded entirely by the third-party provider. Providers set the interest rate, in line with what is available in the general market.

Taxation

If the loan is offered through a provider, this operates as an ordinary loan, with payroll deductions taken from net pay (after-tax). If the interest rate is below the market rate as defined by the State Bank of India, the rate charged is treated as a taxable perquisite. This is most likely to arise if loans are offered directly by the employer.

Implementation and Administration

Implementing workplace loans involves either partnering with a third-party provider or setting up internal systems to manage loan applications and repayments. HR teams usually oversee employee access to the scheme, while payroll handles integration for automatic salary deductions. Employers may also choose to set eligibility criteria, such as a minimum length of service, before employees can apply for a loan.

Other Considerations

Employers should clearly communicate how workplace loans work, including how repayments are handled and how they may affect an employee’s regular take-home pay. Employers should consider offering broader financial wellness programmes to help employees borrow responsibly. Loan agreements should outline what happens if an employee leaves the company before fully repaying the loan. This may involve deducting the remaining balance from the employee’s final salary or, if a third-party provider is used, continuing repayments through direct debit arrangements.

Health

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Cancer Screening

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Key Features – How Does It Work?

Cancer screenings are tests focused on the early detection of common cancers. Employers can partner with diagnostic providers to offer screenings for employees. While not yet widespread in India, the benefit is becoming more common as part of a broader focus on employee health and wellbeing.

Cost and Funding

The cost of a cancer screening programme will vary based on the model and scope of screenings. Providers may offer corporate or group discounts. Employers can choose whether to offer subsidies or offer screening as a voluntary benefit paid by the employee.

Taxation

When cancer screening is offered as a voluntary, employee-paid benefit, there are generally no tax implications for the employer, as the cost is borne by the employee. If opting for the old tax regime, employees may be able to claim a tax deduction for preventive health check-ups, including cancer screenings. This deduction is not available under the new tax regime. If the employer offers a subsidy, this amount would be considered a taxable perquisite for the employee.

Implementation and Administration

A cancer screening benefit typically involves partnering with an accredited diagnostic provider, and communicating the offering to employees. Employees contact the provider for appointments and receive the outcome directly from the partner, ensuring confidentiality.

Other Considerations

When introducing cancer screening as a benefit, employers should take into account the varied needs of their workforce. Offering tests for multiple types of cancer can help create a more inclusive programme. Raising awareness around the value of early detection is key to encouraging participation, especially in workplaces where regular screenings might not be the norm. It is also important to reassure employees that their health information will be kept confidential. Offering a comprehensive health and wellbeing package, including mental health support and private health insurance, can ensure employees have access to any care they need.

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Dental Insurance

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Key Features – How Does It Work?

In India, dental insurance is not commonly offered as a standalone employee benefit. When it is available, it is typically included as an optional add-on to a group health insurance policy. These plans may include routine check-ups, cleanings, fillings, and sometimes more complex procedures. However, the inclusion of dental benefits is still relatively rare and often limited to larger organisations or those aiming to provide comprehensive wellness packages.

Cost and Funding

Given its optional nature, the uptake and funding approach can differ significantly between companies. The cost of adding dental coverage to a group health plan varies based on the extent of services covered and the insurer’s pricing. Employers may fully fund this add-on as part of their benefits package or offer it as a voluntary benefit, where employees can opt in and pay the additional premium themselves.

Taxation

For employers, premiums paid for dental insurance add-ons are usually tax-deductible as a business expense. For employees, if dental cover is bundled as part of a broader group health insurance policy, it is typically not treated as a taxable perquisite. However, if the dental insurance is offered as a standalone benefit or optional rider with a defined monetary value, it may be considered a taxable benefit. If the employee contributes to the cost, the amount may be eligible for a tax deduction under the old tax regime. This deduction is not available under the new tax regime.

Implementation and Administration

Employers should work with their existing health insurance provider to customise their policy to include dental. HR teams are typically responsible for managing employee enrolment and communicating the details of any policy to employees. This should include any process for opting into an agreement if it is voluntary. Once enrolled, administration is usually managed through an online portal, where employees are able to access policy information, the network of providers, and manage claims.

Other Considerations

As dental insurance is not a common offering, clear communication about the scope of coverage, any waiting periods, and the process for accessing dental services is crucial to ensure employees understand and utilise the benefit effectively.

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Fitness Memberships

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Key Features – How Does It Work?

In India, a fitness membership benefit can take the form of a direct partnership or an allowance model. Employers choose a provider, either a gym chain or fitness subscription network, that gives employees access to locations and services.

Cost and Funding

Fitness memberships can vary greatly in cost depending on the offer and the funding model. Some providers will charge based on headcount, while others only charge for employees using the service. Memberships are usually charged monthly. Local gyms will likely be more cost-effective than subscription services that offer greater access opportunities. Employers may also choose to give each employee a set allowance or subsidy to spend on their own membership choice.

Taxation

Fitness memberships paid for by the employer are generally treated as a taxable perquisite and the value of the benefit may be added to the employee’s taxable income. If the employee contributes to the cost, this is taken from post-tax income.

Implementation and Administration

Employers should choose a partner that suits their workforce, taking into account location and work schedules. Employers should communicate the available options to employees and manage sign-ups or establish a process for applying for funds. Depending on the agreement, if employee funded, the fees can be deducted through payroll or made directly to the provider as direct debit. Once joined, administration can be managed via an online portal where employees can access benefits, including booking classes.

Other Considerations

Employers should think about accessibility for hybrid and remote workers, the variety of fitness activities available, and how to keep employees engaged when designing these programmes. Providing flexible options that suit different fitness levels and personal interests can help increase participation and make the benefit more inclusive.

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Health Screening

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Key Features – How Does It Work?

Health screenings are typically offered as annual check-ups aimed at detecting health issues early and encouraging preventive care. These may include tests for blood pressure, blood sugar, cholesterol levels, body mass index, and general physical examinations. Screenings can be organised on-site at the workplace, through partnerships with diagnostic centres, or at home as a testing kit. In some cases, screenings are included in the coverage of group health insurance plans.

Cost and Funding

In India, the cost of health screenings is typically covered by the employer. This may take the form of a fixed allowance for employees, or a partnership with a provider where the employer is invoiced directly. Working with a single provider allows employers to negotiate group discounts or corporate pricing.

Taxation

If the health screening is part of a group insurance policy, the cost is typically treated as a business expense and is tax deductible for the employer and not taxable for the employee. However, if offered outside of an insurance plan, and especially if it includes a cash reimbursement or fixed wellness allowance, the benefit may be treated as a taxable perquisite. If the employee funds some part of the screening, this may be eligible for a tax deduction under the old tax regime. This deduction is not available under the new tax regime.

Implementation and Administration

Employers can implement health screenings by partnering with a provider or setting up a reimbursement system. Many providers offer online booking systems and marketing support to streamline the process. Screenings can be conducted on-site or at designated locations, with results securely shared directly with the employee. Employers should ensure that the process is confidential, seamless, and accessible to all employees.

Other Considerations

To maximise participation, employers should ensure screenings are accessible to all staff, including remote and field workers. It is important to communicate the benefits clearly and reassure employees about the confidentiality of their results. Linking screening outcomes to follow-up services such as nutrition advice, fitness benefits, or mental health support can help create a more complete wellbeing offering.

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Mental Health Support

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Key Features – How Does It Work?

In India, mental health support is increasingly being offered as a standalone benefit. These initiatives differ from EAP in their proactive focus on mental health and access to professional therapists. A mental health benefit may include access to counselling services, typically in an online format, as well as resources and programmes on topics such as stress, anxiety, and burnout.

Cost and Funding

Employers typically cover the full cost of mental health services as part of their wellness budget. This may involve a subscription-based model with a mental health platform, or pay-per-use arrangements with therapy providers. Some companies may also offer a fixed number of counselling sessions per employee.

Taxation

The cost of mental health support services paid by the employer is generally considered a business expense and is tax deductible for the employer. If the benefit is provided uniformly to staff, it is typically not treated as a taxable perquisite for the employee. This is because the service is delivered directly and not as a cash or reimbursed benefit. However, if the employer reimburses employees for support booked independently or outside of an approved platform, the amount may be treated as a taxable benefit.

Implementation and Administration

Employers usually implement mental health benefits through third-party mental health platforms. HR teams are responsible for promoting the service and driving awareness. Partners then handle onboarding, session booking, and user support. Employees typically self-register with the platform, and all sessions are kept strictly confidential. In most cases, these benefits are offered entirely virtually.

Other Considerations

When designing mental health benefits, employers should prioritise inclusivity, accessibility, and long-term support. This means offering services in regional languages, making platforms mobile-friendly, and ensuring therapists are culturally competent. Creating a workplace culture that supports mental wellbeing is key to the success of these benefits. Employers can support this by training managers to recognise signs of mental health issues and encouraging open conversations in the workplace.

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Nutrition Support

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Key Features – How Does It Work?

Nutrition support is an emerging benefit in India, often included within broader corporate wellness programs. It provides employees access to dietitians or certified nutritionists through digital platforms and virtual consultations. Services may include personalised diet plans, lifestyle coaching, meal tracking, and resources targeting common goals such as weight management and improving overall health. Nutrition support is delivered via third-party wellness providers and is typically offered alongside fitness and mental health services.

Cost and Funding

Nutrition benefits are generally employer-funded as part of a bundled corporate wellness plan, though funding models may vary by employer. Employers often pay for platform access through a subscription model, while some may offer nutrition support as a voluntary benefit or under a wellness allowance.

Taxation

In India, the tax treatment of nutrition benefits depends on how the benefit is offered. If provided as part of a broader wellness programme for all employees, the cost is generally considered a tax-deductible business expense and not taxable for the employee. However, if nutrition support is offered as a specific, personalised benefit to an individual employee, it may be treated as a perquisite and subject to income tax.

Implementation and Administration

Employers usually partner with digital wellness providers to deliver nutrition support. HR teams are responsible for handling communication around the benefit and encouraging engagement, often as part of wider wellness initiatives. Employees typically access these services directly through a third-party app or portal.

Other Considerations

When implementing a nutrition support programme, employers should consider the diverse needs of their workforce. This might include taking into account cultural diversity in dietary requirements, and offering support in multiple languages.

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Optical Care

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Key Features – How Does It Work?

Optical care is a relatively uncommon employee benefit in India. When offered, it is typically included as an add-on to a group health insurance policy, instead of as a standalone benefit. These add-on policies may include routine eye care services such as eye exams, prescription glasses, and contact lenses. More comprehensive offerings, such as eye surgery, fall under outpatient treatment or hospitalisation policies. Some insurers also enable access to optical care through discount partnerships with eyewear brands or optometry chains, rather than offering full insurance coverage.

Cost and Funding

Group optical care benefits are usually low-cost and flexible in structure. In many cases, the employer pays a small additional premium to include optical coverage within an existing group health plan. Alternatively, employers may offer this benefit on a voluntary basis, allowing employees to opt in and pay the premium themselves. Where the benefit is offered via discount arrangements rather than insurance, there is no direct cost to the employer.

Taxation

If the employer pays the premium for optical care as part of a group insurance policy, the cost is treated as a tax-deductible business expense. For employees, if optical cover is bundled as part of a broader group health insurance policy, it is typically not treated as a taxable perquisite. However, if offered as a standalone benefit or optional rider with a defined monetary value, it may be considered a taxable benefit. If the employee contributes to the cost, the amount may qualify for a tax deduction under the old tax regime. This deduction is not available under the new tax regime.

Implementation and Administration

Employers should work with their existing health insurance provider to customise their policy to include optical care. HR teams are typically responsible for managing employee enrolment and communicating the details of any policy to employees. This should include any process for opting into an agreement if it is voluntary. Once enrolled, administration is usually managed through an online portal, where employees are able to access policy information, the network of providers, and manage claims.

Other Considerations

Due to its limited availability and low uptake, optical care is not considered a standard benefit in most Indian companies. Clear communication about the scope of coverage, any waiting periods, and the process for accessing optical services is crucial to ensure employees understand and utilise the benefit effectively.

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Seasonal Vaccinations

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Key Features – How Does It Work?

Seasonal flu vaccinations are an emerging element of employer-provided health benefits in India, particularly within larger organisations and multinational corporations. They are typically offered through annual workplace vaccination drives, conducted in partnership with healthcare providers. Flu shots are usually administered on-site at company premises or through voucher systems that allow employees to get vaccinated at partner clinics.

Cost and Funding

Seasonal flu vaccination programmes are usually fully funded by the employer, either by paying per dose to a healthcare provider or through a bulk corporate plan. Costs are generally low relative to other healthcare benefits, and pricing is often negotiated at scale with providers offering on-site services. In some cases, employers may extend the offer to employee family members at an additional cost, either subsidised or paid out-of-pocket. This benefit is typically not part of a group insurance plan, but rather a separate health and wellness initiative.

Taxation

The cost of employer-funded flu vaccinations is typically treated as a business expense and is tax deductible for the employer. For employees, the vaccination is generally not treated as a taxable perquisite, as it is a non-cash, in-kind health and safety measure made available to all staff. As long as the benefit is provided broadly and not as an individualised or reimbursed perk, it is unlikely to attract personal income tax liability.

Implementation and Administration

Employers partner with corporate vaccination providers who specialise in workplace health services. Providers usually manage everything from supply logistics to post-vaccination monitoring. HR teams are responsible for planning, employee communication, and ensuring smooth execution on-site. For off-site solutions, providers may issue digital vouchers redeemable at partner clinics.

Other Considerations

Providing clear FAQs and educational material ahead of vaccinations can help improve participation. For companies with diverse and distributed workforces, using providers that support both on-site and off-site administration ensures accessibility for all employees.

Lifestyle

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Car Leasing

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Key Features – How Does It Work?

Car leasing is a well-established, tax-efficient employee benefit in India. The employer partners with a third-party leasing provider to lease a car on behalf of the employee. The car is used by the employee for commuting and personal use, typically over a 3–5 year lease term. At the end of the lease, employees may return the car, extend the lease, or purchase it at a residual value. Many plans bundle in vehicle insurance, routine maintenance, road tax, and roadside assistance, simplifying administration for both employee and employer.

Cost and Funding

Car leasing is typically funded by the employee. The employer facilitates the lease by partnering with a leasing provider, but the monthly lease rentals are deducted from the employee’s gross (pre-tax) salary. This allows employees to save income tax. It also means that the benefit is cost-neutral for the employer. In some executive-level roles, employers fully fund the lease as a perk, which is then treated as a taxable perquisite.

Taxation

While the leasing cost is deducted from an employee’s pre-tax salary, these contracts are typically structured such that the lease is in the employer’s name. This means that the employer should report the value of the lease as a perquisite benefit. The value is calculated as ₹1,800 per month for cars with an engine less than 1.6L and ₹2,400 per month for cars with an engine more than 1.6L, plus ₹900 per month if a driver is provided. If the car is leased directly by the employee or used solely for business purposes, different tax rules will apply.

Implementation and Administration

Employers should partner with a car leasing provider that specialises in employee schemes. Employees then opt into the programme with their employer. HR is responsible for managing enrolment, salary deductions, and income reporting. The employer is also responsible for lease payments. Providers typically offer an online platform for employees to browse car options, track documents, and manage renewals or buyouts.

Other Considerations

The scheme works best for employees in higher income brackets who can take advantage of the tax savings. There should be a clear process for when an employee leaves a company, including options to transfer, cancel, or buy out the lease.

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Commuter Scheme

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Key Features – How Does It Work?

In India, commuter schemes are becoming an increasingly popular employee benefit, particularly among companies managing large workforces in urban centres. These schemes allow employers to facilitate safe, efficient, and sometimes subsidised commuting options for their staff. This may take the form of organised transport, such as scheduled taxis or buses, or prepaid commuting allowances that can be used for public transport expenses.

Cost and Funding

The cost of commuter schemes is typically borne by the employer, although there are flexible models depending on the company’s budget and workforce size. Transport management platforms usually charge employers based on the number of trips or active users, often bundled into monthly billing. Prepaid card solutions also operate on a monthly basis, with payment instead made upfront. Some companies choose to fully subsidise commuting, while others operate co-pay models where employees cover a portion of the cost.

Taxation

When employers provide organised transport, the benefit is generally considered tax-free for the employee, provided it is for commuting between home and office. If employers offer commuting allowances through cash payments or prepaid cards, the tax treatment can vary. Cash allowances or reimbursements are taxable as part of salary unless they are structured under specific exemptions or capped benefits.

Implementation and Administration

Employers should partner with a specialised third-party provider that suits their workplace. In locations where public transport is reliable, prepaid card options offer greater flexibility. In areas where public transport is less reliable or shift timings are irregular, organised transport management solutions like scheduled cabs or buses offer employees greater safety, convenience, and predictability. Both options operate through online platforms and apps which employees can access directly. HR teams are typically responsible for managing enrolment, communication, and compliance with the commuter scheme.

Other Considerations

Employers should consider shift timings, security (especially for women travelling at night), and regional transport infrastructure when choosing a solution. Working with a provider that offers a mobile-first platform, multilingual support, and frequent service updates can help maintain engagement and ensure the scheme remains effective as company needs evolve.

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Employee Assistance Programme

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Key Features – How Does It Work?

An Employee Assistance Programme (EAP) is a confidential service provided by employers to support employee wellbeing. These programmes typically include online resources, workshops, and a confidential 24/7 hotline. EAPs serve as an important point of escalation, with some counselling offered as well as referrals to more specialised help.

Cost and Funding

EAPs are fully funded by the employer. The cost structure depends on the number of employees and the range of services offered. Tiered pricing models mean that larger companies have a nominal cost per employee per year. More comprehensive offerings, such as counselling sessions or in-person workshops, are likely to incur higher costs.

Taxation

The costs incurred by employers are considered deductible business expenses. For employees, the services they receive through an EAP are typically not treated as a taxable perquisite, as they are available to all employees and considered part of general welfare measures.

Implementation and Administration

Employers should partner with a provider that offers an EAP. They are responsible for communicating the programme to employees, including how to access the service and support line. Employees can then engage directly with the provider, either online or over the phone, to access the service.

Other Considerations

To improve access and encourage employees to use EAP services, employers should partner with a provider that supports multiple languages, including regional ones. Making the service available through various channels such as a website, mobile app, or via phone also helps ensure it is easy to reach. For a more well rounded approach to mental health, EAPs should be part of a wider wellbeing strategy that includes additional mental health programmes and resources.

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Language Training

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Key Features – How Does It Work?

In India, voluntary language training is an emerging employee benefit, especially among companies with international operations or diverse client bases. Employers offer language courses to enhance global collaboration, support market expansion, and improve client engagement. These programmes are typically optional and are positioned as part of broader learning and development initiatives. Training can be delivered through in-person classes, online platforms, or blended learning models, providing flexibility to employees. Some employers may offer access to language learning apps as a more affordable alternative to formal classes.

Cost and Funding

The cost of language training programmes varies based on factors such as the language offered, mode of delivery, and duration. Language learning apps are typically charged on a per employee basis. Employers may fully fund these programmes or share costs with employees.

Taxation

Expenses incurred by employers on language training programmes are generally considered deductible business expenditures. For employees, if the training is provided uniformly and is related to their professional duties, it is typically not treated as a taxable perquisite. If language training is offered as an optional benefit and is not directly related to an employee’s professional duties, any amount paid by the employer may be treated as a taxable perquisite. If the employee chooses to fund the training themselves, the amount is deducted from post-tax income.

Implementation and Administration

To implement a language training programme, employers often partner with language training providers or institutions. The programme should be tailored to the specific needs of the organisation and its employees, considering factors such as the languages most relevant to the business and the preferred mode of learning. Employers should speak with employees to properly understand their interest and availability when designing any programme. If offering in-person classes, they should be scheduled during work hours when possible.

Other Considerations

Providing training in multiple languages and offering it through different formats can make it more accessible and increase participation. Employers can encourage uptake by creating a supportive learning environment, which might include offering extra leave for classes or introducing incentives to keep employees engaged.

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Long Service Award

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Key Features – How Does It Work?

In India, long service awards are a benefit offered by employers to recognise and appreciate employees who have dedicated a significant number of years to the organisation. These awards are typically given at 5-year milestones to recognise continuous service. The awards can take various forms, including cash bonuses, certificates, trophies, or other tokens of appreciation. Some companies may choose to work with a third-party provider to organise awards.

Cost and Funding

The cost of long service awards is fully borne by the employer. The amount allocated for these awards varies depending on the employer’s budget and the significance of the service milestone. These are typically structured as fixed amounts based on years served. Some organisations may also choose to offer non-monetary rewards, such as additional leave days or special recognition events, which can be more cost-effective.

Taxation

Long service awards provided in cash are considered perquisites for the employee and the employer will be required to deduct tax at source. Awards given in kind are exempt from tax up to ₹5,000 per financial year.

Implementation and Administration

Implementing a long service award programme involves establishing clear policies outlining the eligibility criteria, award types, and the process for selecting recipients. HR teams typically manage these programmes, maintaining records of employee service durations and coordinating the award ceremonies or distributions. Employers should communicate the programme effectively to all employees, ensuring transparency and encouraging long-term commitment.

Other Considerations

To maximise the impact of the award as an employee benefit, it is best practice to complement the award with some form of company-wide recognition or event. Many employers also work with third-party providers who offer catalogues of gifts or experiences, giving employees the flexibility to choose something that suits their interests.

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Recognition Programme

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Key Features – How Does It Work?

Recognition programmes are a popular way for companies to celebrate employee achievements and improve employee morale. These programmes may include shout outs and awards, as well as gifts and cash bonuses. Many companies now run structured programmes through third-party providers.

Cost and Funding

Recognition programmes are usually employer-funded, and costs can vary depending on how formal the programme is. Some companies set aside fixed budgets for quarterly or annual awards, while others focus on low-cost peer-to-peer recognition tools. Third-party platforms often operate on a subscription or per-user pricing model, making it easy to scale the programme across locations and teams.

Taxation

The cost incurred by employers in purchasing a platform is considered a deductible business expense. For employees, rewards like cash, gift cards, or vouchers are treated as taxable perquisites. Non-cash gifts are tax-free up to ₹5,000 per financial year.

Implementation and Administration

To implement a recognition programme, employers usually partner with a third-party provider that manages the platform and curates social recognition features and reward options. HR teams can set rules for nominations, approval workflows, and budgets. Employees can log in to a web portal or mobile app to give or receive recognition, and many tools allow public sharing of awards through email, chat platforms, or internal social feeds.

Other Considerations

Using a platform makes recognition more consistent, scalable, and data-driven. Employers should look for providers that align with their company culture and offer the flexibility to adjust reward types and recognition criteria.

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Retail Discounts

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Key Features – How Does It Work?

Retail discount programmes in India typically operate through online platforms that aggregate exclusive offers for employees. These platforms provide discounts on a wide range of products and services, including electronics, travel, dining, and wellness. Employees can access these deals via web portals or mobile apps, using their corporate credentials.

Cost and Funding

Retail discount programmes are generally cost-effective for employers. Many platforms offer their services at minimal or no cost to the employer, generating revenue through partnerships with vendors.

Taxation

For employers, expenses related to setting up and maintaining retail discount programmes are typically considered deductible business expenses. For employees, the discounts received are generally not taxable, as they are considered benefits provided by third-party vendors and not direct compensation. However, if an employer provides cash equivalents or vouchers directly, these may be considered taxable perquisites.

Implementation and Administration

Employers can implement retail discount programmes by partnering with third-party providers who manage the platform. The process involves onboarding the company onto the platform, after which employees can register using their official email addresses. The platform handles the curation of deals, user support, and analytics, reducing the administrative burden on the employer. Regular communication and promotion can help ongoing employee engagement.

Other Considerations

Employers should look for platforms that offer a wide range of discounts to suit employees at different life stages, with varying interests, and based in different locations. Including regional or industry-specific offers can make the benefit feel more relevant and personalised. It also helps to choose a platform that refreshes its deals regularly, so there is something new for employees.

Leave & Remote Working

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Additional Leave

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Additional leave includes any paid or unpaid leave that is offered by employers for non-statutory purposes. Examples include company days, mental health days, volunteer leave, and birthday leave. Employers set their own policies for requesting and recording these days.

In India, the most common form of additional leave is marriage leave, particularly in the public sector and larger private organisations, where employees are granted one to three days of paid leave to celebrate their wedding.

Annual Leave

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Annual leave is paid time off work that all employees are entitled to, designed for personal activities.

In India, annual leave is referred to as Earned Leave or Privilege Leave. It works on an accrual basis, with days earned based on service. For factory workers, there is a national framework. Employees earn 1 day of leave for every 20 days worked. Leave is accrued during the first year of work for employees who have worked 240 days in a year, and it becomes available to use in the following year. For non-factory workers, leave entitlements are governed by state-specific rules. Employees typically accrue earned leave at a rate of 1 day for every 20 to 30 days worked, with most states allowing use of leave within the same year.

For workers who do not use their leave, they can carry forward unused days up to 30–45 days, depending on local and national rules. Employees also have the option to receive monetary compensation, known as leave encashment, for their unused leave. This is most common when retiring or leaving a role, but can also be exercised during service. The tax rules will differ based on when the payment is received.

Employers may also offer additional days or implement more favourable accrual and usage policies.

In addition to earned leave, most states provide for casual leave, typically ranging from 7 to 12 days per year. This leave is intended for short-term, unforeseen personal needs and is generally not carried forward or encashed. It complements earned and sick leave as part of the statutory leave package in many jurisdictions.

Childcare Leave

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In India, childcare leave is available to female central government employees and, in specific cases, to single male employees. It allows for up to 2 years of paid leave to care for children under the age of 18. There is no equivalent statutory entitlement for private sector employees, although some employers are beginning to include similar provisions as part of family-friendly policies.

Compassionate & Bereavement Leave

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Compassionate and bereavement leave is time off work for personal loss or other family emergencies.

India does not have any statutory rules around compassionate and bereavement leave. However, it is widely adopted across industries. Companies offer between 2 to 10 days of paid leave following the death of an immediate family member.

Flexible Working

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Flexible working means finding a way of working that suits an employee’s needs. This may include having flexible start and finish times, or working from home. Some examples of flexible working include job sharing, remote working, hybrid working, part time hours, compressed hours, flexitime, annualised hours, staggered hours, or phased retirement.

Flexible working is becoming more common in India, particularly in large organisations, even in the absence of statutory mandates. Larger companies may have clear policies on requesting flexible working arrangements, while smaller companies operate on a more informal basis.

Maternity Leave

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Maternity leave is paid or unpaid time off for mothers before and after childbirth or adoption.

In India, female employees are entitled to 26 weeks of paid maternity leave for their first two children. This amount is reduced to 12 weeks from the third child onwards. Women who adopt or have a baby via surrogacy are entitled to 12 weeks. Leave is also provided in cases of miscarriage or medical termination of pregnancy. The regulation that governs these rules does not apply to companies with fewer than 10 employees.

Paternity Leave

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Paternity leave is paid or unpaid time off for fathers and supporting partners after childbirth or adoption.

There is no statutory provision to paternity leave in India. Male employees in the central government sector are entitled to 15 days paid paternity leave. In the private sector, many employers have a discretionary offering as part of their employee benefits.

Remote Working

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Remote working policies provide employees with the flexibility to work from locations outside of the office, typically from their own homes. While these arrangements can fall within the definition of flexible working requests, many employers have begun to offer remote working as a standard practice.

Remote working is a popular offer as part of flexible working arrangements that are increasingly common in India. Larger companies tend to have clear policies on hybrid set-ups and remote options.

A specific provision allows nursing mothers to work from home. If the nature of the work allows, a woman can work from home in a format agreed upon with her employer. This provision applies after the 26 week maternity benefit period has expired.

Sick Leave

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Sick leave is time off for employees to recover from illness.

In India, sick leave entitlements are determined by the state labour laws. Most states require employers to provide 12 days of sick leave per year. Leave can generally be used without advance notice but may require a medical certificate if the absence extends beyond two or three days. Sick leave is paid, and in many states, unused sick leave may be carried forward up to a certain cap, often one to two years. Many employers choose to offer more generous sick leave policies than the statutory requirement.

Spending Allowances

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Commuter Allowance

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Commuter allowance, known in India as a conveyance allowance, is money given by employers to help employees cover the cost of travelling to and from work. In most cases, up to ₹1,600 per month can be received tax-free. This allowance is meant for regular daily travel, like using public transport or driving to the office. If an employee receives more than ₹1,600 a month, the extra amount is taxed as part of their salary. The tax relief is only available if there is no employer-organised transport.

Holiday Allowance

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In India, companies offer leave travel allowance (LTA), which helps cover domestic travel costs (air, rail, or public transport) for the employee and their family for two trips every four years. Employees should keep proof of travel to qualify for the tax-free benefits. This exemption is not available under the new tax regime. If employees do not submit proof, or if the employer gives extra money just as a holiday bonus, it is usually taxed. 

Housing Allowance

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House rent allowance (HRA) is an allowance given by employers to help employees pay for rented housing. Part of the HRA can be tax-free, depending on how much rent the employee pays, their salary, and whether they live in a metro city. The tax-free amount is worked out using a government formula, and employees need to show rent receipts to claim the exemption.

Learning & Development Allowance

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Learning and development allowance is funding for employees to grow their skills. It can be used for things like online courses, professional certifications, or attending workshops. In India, this allowance is often given as a reimbursement when employees complete training. Companies use this benefit to encourage career development and help employees stay competitive. Some companies also offer a fixed yearly budget employees can use for approved courses.

Meal Allowance

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Meal Allowance is money or vouchers given by employers to help employees cover the cost of meals during work. In India, meal benefits are often provided through prepaid cards which can be used at restaurants, grocery stores, and food apps. Up to ₹50 per meal is tax-free, usually adding up to around ₹2,200 per month. If employers give meal money directly without using cards or vouchers, it is usually taxed. This exemption is not available under the new tax regime.

Wellbeing Allowance

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A wellbeing allowance is a budget to support employees’ physical, mental, or emotional health. In India, this could include help with gym memberships, therapy sessions, or health apps. Most wellbeing allowances are offered as reimbursements, and unless tied directly to a business expense, they are treated as taxable income. More companies are offering wellbeing allowances as part of a broader focus on employee happiness and mental health.

Work from Home Allowance

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A work from home allowance is a budget to help employees set up or maintain a home office. This could cover expenses like internet bills, desks, chairs, or other equipment. Some companies give a one-time setup amount, while others offer a small monthly allowance. This allowance is usually taxable.

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