What are the most common employee benefits in India?

The most common employee benefits in India are provident fund, gratuity, group health insurance, group term life insurance, group personal accident insurance, paid leave, and maternity benefit. Provident fund and gratuity are statutory and now governed by the Code on Social Security 2020, which took effect on 21 November 2025 and repealed the older standalone Acts. Group health insurance is the most widely offered voluntary benefit among private employers.

Which employee benefits are mandatory in India?

Provident fund, gratuity, employees’ state insurance, and maternity benefit are mandatory, subject to eligibility thresholds. The Employees’ Provident Fund applies to establishments with 20 or more employees, with employer and employee each contributing 12% of wages. Gratuity is payable after five years of continuous service, and under the Code on Social Security 2020 the qualifying period drops to one year for fixed-term employees. Employees’ state insurance covers workers earning up to ₹21,000 a month (₹25,000 for persons with disability), with medical and cash benefits administered by ESIC. Maternity benefit provides 26 weeks of paid leave for eligible women employees.

What voluntary benefits do Indian employers offer most?

Group health insurance is the most common voluntary benefit, followed by group term life and group personal accident cover. A group health policy covers employees and usually their dependents for hospitalisation on a cashless or reimbursement basis. Group term life pays a fixed sum assured to an employee’s nominee on death during service. Group personal accident cover pays for accidental death and disability. Employers fund these to compete for talent, since the cover sits outside salary and is cheaper per head than retail policies because the risk is pooled across the group.

What other benefits are common in Indian workplaces?

Beyond insurance and statutory funds, employers commonly offer paid annual leave, sick leave, wellness programmes, telehealth and mental-health support, meal and transport allowances, and learning budgets. Many companies add outpatient consultation cover, dental and vision riders, and parental support such as creche reimbursement. The mix has shifted toward health and financial-wellness benefits since 2020, with employers using them to reduce attrition rather than as a compliance formality.

How Plum approaches this

Plum sets up group health and group term life cover for companies with a minimum of 7 employees. The claims experience is measured: Plum holds a claims NPS of 79 and a median pre-authorisation turnaround of 45 minutes, well inside the one-hour cashless pre-authorisation window set by the IRDAI Master Circular of May 2024. Cashless access depends on the insurer underwriting the policy, so the hospital network varies; Plum places cover with insurers including ICICI Lombard, HDFC ERGO, Bajaj Allianz, Star Health, Niva Bupa, and Aditya Birla Health Insurance, and matches the network to where a company’s employees actually live and work.

Frequently asked questions

Is provident fund mandatory for all companies in India?
Provident fund applies to establishments with 20 or more employees. Smaller establishments can opt in voluntarily.

Is group health insurance a statutory benefit?
No. Group health insurance is a voluntary benefit. Statutory medical cover for lower-wage employees runs through ESIC, now under the Code on Social Security 2020.

What is the difference between gratuity and provident fund?
Provident fund is a monthly retirement contribution split between employer and employee. Gratuity is a lump sum the employer pays on exit after the qualifying service period.