You are currently viewing The 4 Secrets About Employee Benefits In India 2021
  • Reading time:7 mins read
  • Post category:Services
  • Post published:December 13, 2021

Employee benefits in India, also known as perks or perquisites, are given to employees so that they feel content and appreciated in their companies. It basically covers the indirect pay of the workforce other then their wages.

As an employer, it is your duty to provide employee benefits beyond salaries, which can include health Insurance or Mediclaim (Medical Insurance or Medical Benefits), traveling costs, paid vacations, retirement benefits or Pensions, Accident insurance (for treatment cost, disability or compensation), gratuity payment, and more.

Employees are the pillars of a successful workplace and are the most solid asset and thus, they should feel valued. You have to understand that a talented individual might join Company A and not Company B even though both offer the same profile and exact same salary.


Because Company A may have more perks and may be providing employee benefits!

Perks are lucrative to people because they obviously are a better financial proposition. It also makes your employees feel that you care about them and their beloved families. These non-financial benefits can keep your company in the good books of employees.

Some of these perks are mandated by the government as well.

What are the Employee benefits in India?

Employee benefits are a great investment for employers as they can significantly boost productivity and keep them focused. They are great for attracting talented job seekers as well as effective in employee retention. Employee perks create a sense of loyalty amongst workers.

For instance, during the COVID-19 pandemic, many companies arranged service for vaccination drives for employees and their families. This was definitely appreciated by their employees.

In this blog, we are going to highlight the importance of employee benefits in India.

Employee benefit plans are important to enhance productivity and make employees feel valued. These benefits are not given due to specific performance. They are given irrespective of an individual’s contribution to the company.

During their Employment, these perks eventually help in retaining employees and make them more productive.

Talent retention strategy

As mentioned before, employee benefits are used for retaining talents in the organization. Make them feel that you care about their needs.


When you are providing these perks or benefits to employees, they would likely be loyal to you and not switch fast.

Your employees will prefer working with you rather than moving to a new company as they know that the entire package in your company is quite lucrative.

Reduction in absenteeism

Apart from enhancing the quality of work, employee perks also reduce the rate of absenteeism in a company. This is because your employees would be relaxed as their financial and other requirements are being taken care of by you.

Better recruitment

You are attracting eligible candidates when you provide all these benefits. They would be asking you about the perks apart from checking the salary structure. Make this your USP when you post a vacancy advert.

Promote employee wellness

This also reflects the fact that you care about the health of your employees. If you provide health insurance, doctor visit reimbursement, free health check-ups, etc., then you are promoting employee health and wellness.

Beat your competitors:

If you want to stay ahead of your peer companies, then you should take this seriously.

We will also be discussing some classic employee benefits examples. Read on to know more. Here are the various types of employee benefits in India.

Employee Benefits in India 2021

4 Types of Employee Benefits in India

Employee benefits in India can be of various types. While one company provides employer-paid health insurance, other focus on offering retirement benefits. Here are some of the most common types.

Let’s dig deep into the same.

Paid leaves in India

One of the most common types of employee benefits is paid leaves. This includes casual leaves, sick leaves as well as maternity leaves. Every employer needs to provide these leaves to their employees.

Under the Maternity Benefit Act, maternity leave is now stretched from 12 to 26 weeks. 8 weeks of prenatal leaves are also provided.

Moreover, adoption leave of 12 weeks is also granted to employees when they are adopting babies less than three months of age.

Group Health Insurance for Employees

Secondly, employers also provide group health insurance. This is one of the most lucrative employee benefit programs in India. It is extremely beneficial as employees can also add their parents, spouse, or kids to the plan.

The benefit includes reimbursement of medical bills, health check-ups that are free, additional discounts, etc. Generally, the sum insured in a group plan is from 2 to 5 lakhs.

This makes employees feel relaxed as they know their company would back them up incase of medical emergencies.

Retirement Benefits in India

This consists of Employees Provident Fund(EPF), Gratuity, pension plans in India, et al.

Employees Provident Fund (EPF) is governed by the Employees Provident Fund and the Miscellaneous Provision Act and is a part of the social security contributions.

Per the terms of EPF, employers, as well as employees, contribute a fixed amount of 12% of their salary to the Employees Provident Fund. Out of this, approximately 8.33% of contributions go to the pension fund.

The Gratuity employee benefit is managed by the Gratuity Management Act. An employee must be engaged with a company for 5 years to get gratuity.

Very few private companies offer pension plans in India as a part of employee benefits. This is a great plan as employees are not financially burdened after retirement if they have a pension plan.

Wellbeing Programs

This is also an important part of employee perks. These benefits are mainly aimed at the physical and mental well-being of workers. It includes Zumba classes, meditation services, counseling and therapies, gym memberships, etc.

Companies also provide company cars for commute to employees. Subsidized transportation, subsidized cafeteria access, meal allowances, and education assistance are also some of the most common forms of employee perquisites.

Companies also reimburse internet and mobile phone bills and provide loans to eligible employees. Senior employees also get housing allowance, relocation allowance, etc. During the pandemic, private organizations across India allowed employees to work from home.

Organizations also give Diwali or Puja bonuses to their employees to enhance their value. Sodexo and other coupons are also provided by various private firms. There are other retirement benefits, such as VPF, Private plans, etc.

To be honest, there are multiple employee benefits that employers can provide for the general well-being of employees. To know more about statutory benefits in India, please keep an eye here.