Learn All About Employee Benefits In India
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Learn All About Employee Benefits In India

  • Highlights

  • Follow government mandates

  • Offer superannuation, gratuity, and statutory bonuses

  • Insure your employees with Group Health Insurance

  • Buy Employee Health Insurance via Bajaj Finserv

In India, the formal job sector comprises only 13% of all firms. The other 87% firms are purely informal in orientation. These research numbers mean that they are outside both the tax and social security brackets. So, as an employer in India, it is important for you to be aware of the benefits your employees are entitled to. Providing fair compensation to employees who serve, or have served your company and are now retired is a must, and is legally-binding too.

With the points given below you can understand how to abide by government mandates and at the same time, provide employees with superior benefits. When you incentivise employees, they are more likely to better their performance and pledge their loyalty to you, instead of another company. Besides, such incentives also promote job satisfaction and increase retention, which will directly affect your growth as a company.

Employee Provident Fund

Employee Provident Fund or EPF is the most basic benefit that you can offer. Here, a part of the employee’s salary is set aside to increase their stability upon retirement or if they are unable to continue working in the future. You, as an employer, have to match their contribution and deposit it in their EPF account as well. As per government rules, if you employ over 20 employees, you are liable to register with the Employees’ Provident Fund Organisation. Once this is done, you will have to make contributions each month.

Superannuation

In a nutshell, superannuation is an organisational pension programme structured to offer employees retirement benefits. The upper limit of the contribution towards superannuation is 15% of the employee’s basic, plus dearness allowance. Upon resignation, an employee may withdraw the amount or choose to preserve the amount until retirement in the event that the employee’s new workplace doesn’t have a superannuation scheme in place.

Gratuity

Gratuity can be defined as a part of an employee’s salary given to them on leaving the company, after they complete 5 years of service. The reason for leaving could be retirement, resignation or getting better opportunity elsewhere. You are liable to pay gratuity if you have more than 10 employees according to the Payment of Gratuity Act of 1972. There are many forms that an employee needs to fill to collect the gratuity amount, which is capped at Rs.10 lakh.

Statutory bonuses

This is a bonus you are liable to pay if you employ more than 20 people. It is calculated by taking into account the employee’s salary along with the employer’s profits, and is issued by way of the Payment of Bonus Act of 1965. A minimum of 8.33% and maximum of 20% is payable on the salary of an employee if it is lower than Rs.21,000 per month.

Employee State Insurance

This is reserved for employees in the organised sector. The Employee State Insurance Act of 1948 safeguards employees from ill health, disablement or sudden death due to an employment injury. An employee is eligible for insurance if they earn a salary that is less than Rs.21,000 per month.

However, to truly prioritise the interests of your employees, offer them a comprehensive insurance policy. Consider taking an Employee or Group Health Insurance policy from a trusted insurance provider such as Bajaj Finserv. You can purchase coverage from Rs.1.5 lakh to Rs.50 lakh per person, offer coverage to employees’ families as well. In addition, you can buy this policy and benefit from discounts and waivers. Also, you have the option to customise the policy’s tenor as per the group size.

Encashment benefit

This benefit allows employees to cash the leaves that they are entitled to take but haven’t taken. With regards to this benefit, you do have the flexibility to determine if a particular leave can be cashed or not. The taxation rate varies according to the type of organisation you run. This is important to know as a certain amount can be exempted at the time of filing your company’s returns.

When your employees feel cared for and know that you are paying attention to their future, they are more likely to perform well. Apply online for Group Health Insurance via Bajaj Finserv after you check your pre-approved insurance offer for customised premiums and other added benefits.

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