Employee Benefits in India: Go-To Guide for Employee Benefits in India
25 August 2023
Employee benefits are necessary to attract and retain talented professionals. Employee benefits in India encompass various offerings, including health insurance, life insurance, provident fund, gratuity, performance-linked or stock-based incentives, vacation and leave benefits, and employee assistance programs.
Having a comprehensive benefits package is an essential part of a successful organisation. It can attract and retain talented professionals and ensure that employees are provided benefits to maintain a good quality of life. This blog will discuss the different employee benefits in India and tips for creating the best employee benefits plan.
Types of Employee Benefits in India
Employee benefits packages are payments made by employers to employees that go above and beyond the range of wages. They are also non-monetary benefits. They may be legally mandated or made available voluntarily by employers. These benefits are designed to make employees feel valued.
Employers in India are legally required to provide gratuity to their employees at the time of retirement. This amount is usually calculated based on the years the employee has performed for the company. According to the Gratuity Payment Act, every employee is entitled to a gratuity, which is a massive payment of 15 days for every single year of employment. Employers can obtain a tax benefit of approximately Rs. 1,000,000 by paying gratuities.
The Union Budget of 2023 India proposes to raise the income tax exemption limit from the current Rs 2.5 lakh to Rs 5 lakh, thereby providing a tax rebate of up to Rs 7,500 to individuals in the 5-8% tax slab. The budget proposes to reduce the corporate tax rate from 30% to 25%. It will benefit the companies by allowing them to retain more profits. In addition, the government has announced a contribution of up to Rs. 12,000 to the National Pension Scheme for employees earning less than Rs. 15 lakhs per annum.
It is a rundown of the mandatory benefits and entitlements which employers must provide to their employees according to Indian law. In addition, employees may be eligible for a variety of statutory benefits, including:
Sick Pay: Employees may be eligible to receive Statutory Sick Pay (SSP) if they are ill or self-isolating and unable to work.
Maternity Pay: Female employees may be eligible for Maternity Allowance or Statutory Maternity Pay if they are expecting a baby.
Paternity Pay: Male employees may be eligible for Statutory Paternity Pay if their partner is expecting a baby.
Redundancy Pay: Employees may be eligible for a redundancy payment if their job is made redundant.
Flexible Working: Employees may be able to request flexible working arrangements to fit in with their responsibilities.
Employers can offer employees some additional benefits as part of their package, such as health insurance, pension plans and meal cards. For example, companies like Pluxee provide meal benefit cards that offer tax benefits to employees and improve work satisfaction. Pluxee Meal & Benefit Solutions are 2 in 1 personalized prepaid cards that can be used to pay for gifts, fuel, and groceries from participating merchants, including supermarkets, gas stations, restaurants, and more. Meal cards can be used to pay for food at various retailers. These cards are digital and can be managed through a single portal system.
Employees' Provident Fund Organisation (EPFO)
The EPFO is the main regulatory body responsible for administering EPF and other related schemes. Money saved in the EPF account can be used for various purposes, including retirement savings, medical expenses, house purchases, and education. The employer contributes 12% of the employee's basic salary, while the employee contributes 10%. The employee's contribution is eligible for tax deductions under section 80C of ITA (Income Tax Act) 1961. The EPFO also offers a range of other benefits, including insurance and pension plans.
Tips for Employers on Creating the Best Employee Benefits Package
Allowing employees to have flexible working arrangements is one of the best ways to form an attractive and engaging benefits package. It could include telecommuting, flexible hours, and compressed workweeks.
Provide Health Insurance: Health insurance is a great way to attract and retain talented employees. Make sure to offer comprehensive coverage that meets both the needs of the employee and the company.
Provide Paid Time Off: Offering paid time off is essential for employee morale and productivity. It includes vacation, sick days, and personal days available to all employees.
Offer Wellness Programs: Wellness programs can encourage employees to stay healthy and be more productive. It includes discounts on gym memberships, nutritional eating programs, and other wellness activities. You can also reward employees with Pluxee Meal & Benefit Solutions. These are prepaid cards which can be used at Pluxee retail partners PAN India.
Create a Positive Work Environment: An optimistic work environment is essential to employee satisfaction and engagement. It could include offering an open-door policy, flexible scheduling, and team-building activities.
Offering employee benefits Pluxee Gift Cards is an excellent way of making your employees feel valued and appreciated. Pluxee Meal & Benefit Solutions can prove helpful in saving taxes on meal expenses, groceries and other services. Employee benefits in India are an essential part of attracting and retaining talent. Benefits offered by employers can range from health and life insurance to retirement plans and education assistance. Companies in India also provide additional benefits such as performance bonuses, stock options, and other incentive schemes to motivate their employees.