EOR.net.au
Employing in India
India gives Australian businesses access to one of the largest pools of software, engineering and analytics talent in the world. Bengaluru, Hyderabad, Pune and other cities have mature technology sectors used to working with Australian and global teams.
The legal landscape is in transition. Four new labour codes came into force in November 2025, replacing 29 central laws, while states are still finalising their rules. Leave, holidays and sick leave also vary by state. An EOR handles provident fund, gratuity and state registrations while the new framework beds in.
Why Australian businesses go there
- Very large technology and engineering talent pool
- Time difference of 4.5 to 5.5 hours allows overlap with Australian mornings
- Established outsourcing and global capability centre ecosystem
- Competitive salaries for skilled roles
What to watch
- The four labour codes took effect on 21 November 2025, with state rules still being finalised
- Provident fund contributions of 12% from employer and employee
- Gratuity is payable after 5 years (1 year for fixed-term employees)
- Restraints that apply after employment ends rarely survive in court
Hiring and contracts
- Employment contracts
- Four labour codes took effect on 21 November 2025 and replaced 29 central laws, although state rules are still being settled. Appointment letters are required, and each state's Shops and Establishments Act adds local requirements.
- Probation
- There is no national probation rule. Contracts or standing orders usually set 3 to 6 months.
- Working hours
- The general limits are 8 hours a day and 48 hours a week, with overtime paid at double the ordinary rate. Detailed limits come from state Shops and Establishments Acts.
- Minimum wage
- A national floor wage is set by the central government, and states set minimum wages by region, industry and skill level, so the rates differ a great deal.
Leave and holidays
- Annual leave
- Earned leave varies with the law that applies. A common rule gives 1 day for every 20 days worked once the employee has worked 180 days in the year.
- Sick leave
- Each state's Shops and Establishments Act sets sick leave, so the entitlement depends on where the employee works.
- Parental leave
- Women receive 26 weeks of paid maternity leave for their first two children, paid by the employer or through ESI for covered employees. Most private sector employees have no statutory paternity leave.
- Public holidays
- India has 3 national holidays, Republic Day, Independence Day and Gandhi Jayanti, with state and festival holidays that differ from state to state.
Employer costs
- Retirement and social security
- Employer and employee each contribute 12% of basic wages to the Employees' Provident Fund, and part of the employer contribution goes to the pension scheme. ESI covers lower earners.
- Payroll taxes
- Income tax is deducted at source (TDS) from salaries. Some states also charge professional tax and labour welfare fund contributions.
- Mandatory benefits
- Provident fund, ESI where it applies, gratuity and statutory bonus for eligible employees.
Ending employment
- Notice periods
- Contracts set notice, typically 1 to 3 months. A worker with at least 1 year of service who is retrenched must receive 1 month of notice or pay instead.
- Dismissal protection
- The Industrial Relations Code strongly protects non-managerial "workers". Retrenchments and closures at larger establishments need government permission.
- Severance
- Workers who are retrenched receive 15 days of average pay for each completed year of service. Gratuity of 15 days of wages per year of service is due after 5 years, or after 1 year for fixed-term employees.
Contract terms and visas
- IP and restraint clauses
- Section 27 of the Indian Contract Act generally makes post-employment non-competes void. Courts are more willing to uphold confidentiality and non-solicitation clauses, and IP assignments must be in writing.
- Visas and right to work
- Foreign nationals working in India need an Employment Visa, usually subject to a minimum salary. The sponsoring entity must be registered in India.
Compared with Australia
| India | Australia | |
|---|---|---|
| Annual leave | Earned leave varies with the law that applies. A common rule gives 1 day for every 20 days worked once the employee has worked 180 days in the year. | Full-time employees get 4 weeks of paid annual leave a year (5 weeks for some shift workers), built up progressively. Unused leave is paid out when employment ends, and many awards add 17.5% leave loading. |
| Sick leave | Each state's Shops and Establishments Act sets sick leave, so the entitlement depends on where the employee works. | Full-time employees get 10 days of paid personal/carer's leave a year, plus 2 days of unpaid carer's leave and 2 days of paid compassionate leave per occasion. Every employee can also take 10 days of paid family and domestic violence leave a year. |
| Notice | Contracts set notice, typically 1 to 3 months. A worker with at least 1 year of service who is retrenched must receive 1 month of notice or pay instead. | Under the National Employment Standards an employer gives 1 week of notice for up to 1 year of service, rising to 4 weeks for more than 5 years, plus an extra week for employees over 45 with at least 2 years of service. Pay in lieu is allowed, and awards set the notice employees must give. |
| Retirement and social security | Employer and employee each contribute 12% of basic wages to the Employees' Provident Fund, and part of the employer contribution goes to the pension scheme. ESI covers lower earners. | On top of wages, employers pay the Superannuation Guarantee at 12% of qualifying earnings. Payday Super has applied since 1 July 2026, so contributions go out with each pay and must arrive in the fund within 7 business days. Australia has no separate employer social security levy. |
| Dismissal protection | The Industrial Relations Code strongly protects non-managerial "workers". Retrenchments and closures at larger establishments need government permission. | After the minimum employment period, employees can claim unfair dismissal if an award or agreement covers them or they earn under the high income threshold, $190,100 from 1 July 2026. Protection against adverse action under the general protections starts on day one, and small businesses may rely on the Small Business Fair Dismissal Code. |
Frequently asked questions
How much annual leave do Indian employees get?
It varies with the law and state that apply. Many employees earn a day of leave for each 20 days they work, once they reach 180 days of work in the year.
Can we use a non-compete clause in India?
Usually not after employment ends. Indian courts treat such restraints as void under section 27 of the Contract Act, so rely on confidentiality and non-solicitation terms instead.
What changed with the labour codes?
Four labour codes on wages, industrial relations, social security and workplace safety replaced 29 central laws from 21 November 2025. State rules are still being finalised.
