# The India Employee Benefits Stack for Austrian companies

> Austrian parents are used to compulsory social insurance for health, pension, accidents and unemployment, a severance fund paid monthly and collectively agreed special payments. India's statutory layer is thinner, and its lump sum, gratuity, is unfunded unless the employer funds it. Health cover above ₹21,000 a month is a choice the employer makes.

By Akshay Golechha, Chief Business Officer at Plum (https://www.linkedin.com/in/akshaygolechha/). Published by Plum (https://www.plumhq.com). Canonical: https://www.plumhq.com/india-benefits-stack/austria. Updated 2026-10-05. Part of The India Employee Benefits Stack: https://www.plumhq.com/india-benefits-stack.

## In short

- There is no equivalent of Austrian statutory health insurance in India. Employees above ₹21,000 a month have no statutory health cover; employers buy Group Health Insurance, which candidates hired at ₹8 LPA and above expect.
- Abfertigung Neu maps to gratuity, but gratuity is a direct employer liability: 15 days' last drawn salary per year of service after five years, capped at ₹20 lakh. Pension insurance maps to EPF, at 12% employer plus 12% employee on basic.
- India has no 13th or 14th salary. Since 21 November 2025, allowances above 50% of total remuneration are added back into wages for EPF and gratuity, so test any Austrian-style pay structure against that rule.

## Questions

### Is gratuity the Indian version of Abfertigung Neu?

It is the closest match, but it works differently. Abfertigung Neu is a 1.53% monthly contribution to a fund. Gratuity is a statutory lump sum the employer owes directly: 15 days' last drawn salary per year of service after five continuous years, one year for fixed-term staff, capped at ₹20 lakh. Provision it from day one, ideally through an insured gratuity scheme.

### Is there an equivalent of Austrian statutory health insurance in India?

No. India has no statutory employer health insurance for salaried staff above ₹21,000 a month. Employees at or below that wage sit in ESI, funded 3.25% by the employer and 0.75% by the employee. Everyone else is covered only if the employer buys Group Health Insurance, which candidates hired at ₹8 LPA and above expect.

### Do we have to pay a 13th and 14th salary in India?

No. India has no statutory 13th or 14th salary, and offers are quoted as annual CTC. Employees earning up to ₹21,000 a month are owed a statutory bonus of 8.33% to 20% under the Payment of Bonus Act. Under the Labour Codes, allowances excluded from wages above 50% of total remuneration are added back into wages for EPF and gratuity.

### Do staff posted from Austria have to contribute to EPF?

Not if they hold a certificate of coverage under the India–Austria social security agreement, in force since 1 July 2015. It keeps them in Austrian social insurance for up to 60 months. Without the certificate, a foreign national employed in India is an International Worker and contributes to EPF on full salary, with no ₹15,000 ceiling, from day one.

### Who pays for maternity leave in India?

The employer. Under the Maternity Benefit Act a woman gets 26 weeks of full pay for her first two children and 12 weeks from the third, paid directly by the employer; ESI pays it for ESI members. There is no statutory paternity leave under central law. Group Health Insurance covers the hospital bill: about ₹1 lakh for a normal delivery and ₹1.25 lakh for a C-section.

## What changes when you come from Austria

### Assignees from Austria and India's EPF

**The rule.** Foreign nationals employed in India are International Workers under EPF. They must join from day one, with contributions on full salary: the ₹15,000 wage ceiling does not apply.
**Austria and India.** India and Austria have a social security agreement in force since 1 July 2015. Staff posted from Austria with a certificate of coverage stay in Austrian social insurance and are exempt from Indian EPF for up to 60 months. The agreement also counts insurance periods in both countries towards pensions. Get the certificate before the first Indian payroll run.

### Mapping Austrian benefits to India

**At home.** Compulsory pension, health, accident and unemployment insurance through payroll, 1.53% a month into a severance fund (Vorsorgekasse), and 13th and 14th salaries under collective agreements.
**In India.** EPF for pension, ESI below ₹21,000 a month and Group Health Insurance (GHI) for everyone else. Gratuity is the Indian severance: fund it through an insured gratuity scheme rather than carrying it as an unfunded liability.

### Overlap between Vienna and India

**Time difference.** India is 3½ hours ahead of Vienna during European summer time (late March to late October) and 4½ hours ahead in winter. India does not change its clocks, so 9:00 in Vienna is 12:30 or 13:30 in India.
**What to set up.** Agree who in India signs off endorsements, claims escalations and renewals, so nothing waits for headquarters' business hours.

### India–Austria tax treaty

**Treaty.** India and Austria have a double taxation avoidance convention, in force since 5 September 2001 and amended by a protocol in force from 1 May 2020. Short visits are usually exempt from Indian tax under the treaty's 183-day and employer conditions; check the exact article before relying on it.
**Secondments.** Long secondments can create a permanent establishment for the parent. Structure recharges and employment contracts with a tax advisor before staff move.

## What you call it in Austria, and what it is called in India

Austrian employers pay 1.53% of monthly pay into a severance fund (Abfertigung Neu) from the second month of employment, and the fund carries the liability. India's closest match, gratuity, works the other way round: a statutory lump sum of 15 days' last drawn salary per year of service after five years, capped at ₹20 lakh, owed by the employer directly. Health is the other surprise. Austrian social insurance covers employees through payroll; in India an employee earning more than ₹21,000 a month has no statutory health cover, and the employer's statutory health obligation is zero.

| At home in Austria | In India | What changes for the employer |
| --- | --- | --- |
| Health insurance (Krankenversicherung): Compulsory health insurance through employment: 7.65% of pay up to €6,930 a month (2026), 3.78% from the employer and 3.87% from the employee. | ESI for employees at or below ₹21,000/month; Group Health Insurance (GHI) for everyone else | No statutory cover above the ESI wage ceiling. GHI is voluntary in law and expected by candidates hired at ₹8 LPA and above. India's median sum insured is ₹5 lakh; global startups in India carry ₹10 lakh. Family members are covered only if the policy includes them. |
| Pension insurance (Pensionsversicherung): 22.8% of pay up to €6,930 a month (2026): 12.55% from the employer, 10.25% from the employee. | EPF and EPS (Employees' Provident Fund and Pension Scheme) | 12% employer plus 12% employee on basic wages, with 8.33% of the employer share going to EPS. The statutory wage ceiling is ₹15,000 a month, but most MNC subsidiaries contribute on full basic, and International Workers always contribute on full salary. |
| Severance fund (Abfertigung Neu (Betriebliche Vorsorge)): 1.53% of monthly pay into a Vorsorgekasse from the second month of employment; the account stays with the employee across jobs. | Gratuity under the Payment of Gratuity Act 1972 | Gratuity is a defined lump sum the employer owes directly: 15 days' last drawn salary per year after five continuous years, one year for fixed-term staff under the 2025 Labour Codes, capped at ₹20 lakh. Nothing is paid into a fund unless the employer sets one up, usually an insured gratuity scheme. |
| 13th and 14th salaries (Urlaubszuschuss und Weihnachtsremuneration): Holiday and Christmas payments, the 13th and 14th salaries, set by collective agreement or contract; there is no statutory entitlement. | Statutory bonus under the Payment of Bonus Act (8.33% to 20%) for employees earning up to ₹21,000 a month | India has no 13th or 14th salary; offers are quoted as annual CTC, so special payments are usually folded into it. Before copying them, check how they sit against the Labour Codes' 50% wages rule, which feeds EPF and gratuity. |
| Unemployment insurance (Arbeitslosenversicherung): 5.9% of pay up to €6,930 a month (2026), 2.95% each from employer and employee. | No direct equivalent | Nothing to contribute. Exit costs in India sit in notice pay and gratuity rather than in an insurance scheme. |
| Accident insurance (Unfallversicherung (AUVA)): Statutory accident insurance at 1.1% of pay, paid by the employer alone. | Employees' Compensation Act 1923 (or ESI where covered) plus Group Personal Accident (GPA) | There is no accident insurer to pay into. The employer carries the Employees' Compensation Act liability for staff outside ESI and insures it. Group Personal Accident is the usual voluntary top-up for injury and disability. |
| Sick pay (Entgeltfortzahlung im Krankheitsfall): Employer pays full salary for at least six weeks of illness, longer with service; health insurance then pays sickness benefit (Krankengeld). | Sick and casual leave under state law; ESI for employees at or below ₹21,000/month | Leave days are set by each state's Shops and Establishments Act or the Factories Act, and no insurer takes over afterwards. Above the ESI line, salary in a long illness is whatever the employer's leave policy says. |
| Paid leave (Urlaub (Urlaubsgesetz)): Five weeks of paid leave a year, rising to six after more than 25 years of service. | Earned leave under the state Shops and Establishments Act (offices) or the Factories Act (factories) | Earned leave is typically 12 to 18 days a year, plus casual and sick leave, and varies by state. Public holidays vary by state; only three are national. A five-week group standard is well above the Indian legal floor. |
| Maternity pay (Mutterschutz und Wochengeld): Maternity leave around birth paid by health insurance (Wochengeld), followed by parental leave (Karenz). | Maternity Benefit Act: 26 weeks of full pay for the first two children, 12 weeks from the third; no statutory paternity leave | The employer pays the salary directly, not a social insurer, unless the employee is in ESI. GHI covers the hospital bill: about ₹1 lakh for a normal delivery and ₹1.25 lakh for a C-section. A crèche is required at 50+ employees. |
| Company pension (Betriebliche Altersvorsorge (Pensionskasse)): Voluntary company pension through a Pensionskasse or a direct commitment, on top of statutory pension insurance. | EPF on full basic, plus EDLI life cover of up to ₹7 lakh through EPFO | Most MNC subsidiaries contribute to EPF on full basic rather than the ₹15,000 ceiling, which plays the top-up role. For death cover, Group Term Life at 3 to 5 times CTC is common for white-collar staff. |

## What Austrian companies get wrong when they set up in India

1. **The severance fund contribution covers our exit liability, as at home.** Gratuity has no fund unless you create one. It is owed directly: 15 days' last drawn salary per year after five years, one year for fixed-term staff, capped at ₹20 lakh. Provision it from the first payroll and consider an insured gratuity scheme.
2. **Everyone is in statutory health insurance.** Only employees earning up to ₹21,000 a month are, through ESI. Above that line India has no statutory health obligation at all. Group Health Insurance is voluntary in law and expected by candidates hired at ₹8 LPA and above.
3. **We should pay a 13th and 14th salary, as at home.** India has neither; offers are quoted as annual CTC. If you pay special payments anyway, check the structure against the Labour Codes: where allowances excluded from wages exceed 50% of total remuneration, the excess is added back for EPF and gratuity.
4. **Maternity pay comes from health insurance, not from us.** Under the Maternity Benefit Act the employer pays 26 weeks of full salary directly for the first two children, 12 weeks from the third. Only ESI members are paid by ESI. GHI covers the delivery bill, about ₹1 lakh for a normal delivery.
5. **Accident insurance is a payroll levy we simply pay.** There is no AUVA equivalent. The Employees' Compensation Act makes the employer liable for work injuries of staff not in ESI, and the employer insures that liability itself. Group Personal Accident is the usual voluntary top-up.
6. **Five weeks' leave is the legal minimum in India too.** Leave is set by each state's Shops and Establishments Act or the Factories Act: earned leave of typically 12 to 18 days plus casual and sick leave. A group standard above that is a choice, and public holidays vary by state.
7. **Posted staff stay in Austrian social insurance automatically.** Only with a certificate of coverage under the India–Austria social security agreement, in force since 1 July 2015, and for up to 60 months. Without it, an Austrian national employed in India is an International Worker and contributes to EPF on full salary from day one.

## Austria vs India, benefit by benefit

| Benefit | Austria | India |
| --- | --- | --- |
| Statutory health cover | Universal, through compulsory social insurance tied to employment; family members can be co-insured. | ESI for employees earning up to ₹21,000 a month. Nothing above that line. |
| Employer health cost | 3.78% of pay up to €6,930 a month (2026). | 3.25% of wages into ESI below the line. Above it, a voluntary GHI premium per person. |
| Employer social insurance | 20.98% of pay up to €6,930 a month (2026), plus 1.53% for the severance fund. | EPF at 12% of basic, ESI at 3.25% below the line, gratuity provision and statutory bonus where it applies. |
| Pension | 22.8% of pay: 12.55% from the employer, 10.25% from the employee. | EPF and EPS at 12% employer plus 12% employee on basic pay. |
| Severance | Abfertigung Neu: 1.53% a month into a Vorsorgekasse; the fund pays out. | Gratuity: 15 days' last drawn salary per year after five years, capped at ₹20 lakh, owed by the employer. |
| Special payments | 13th and 14th salaries under collective agreements or contracts. | None statutory. Statutory bonus of 8.33% to 20% for employees earning up to ₹21,000 a month. |
| Sick pay | At least six weeks of full pay from the employer, then Krankengeld from health insurance. | Sick leave days under state law. Above the ESI line, nothing statutory beyond that. |
| Maternity | Wochengeld from health insurance around birth, then parental leave (Karenz). | Employer pays 26 weeks of full salary. GHI covers the hospital bill. No statutory paternity leave. |
| Paid leave | Five weeks a year, six after more than 25 years of service. | Earned leave typically 12 to 18 days plus casual and sick leave, set by state law. |
| Accident cover | Statutory accident insurance at 1.1% of pay, employer only. | Employees' Compensation Act, insured by the employer; Group Personal Accident bought voluntarily. |
| Unemployment insurance | 5.9% of pay, split equally. | None. Exit costs sit in notice pay and gratuity. |

## Staff seconded from Austria

Posted staff often keep an Austrian or international health policy, but an India-admitted GHI is still worth adding: it gives cashless admission at network hospitals without an advance deposit. Under the India–Austria social security agreement, a posted employee with a certificate of coverage stays in Austrian social insurance and is exempt from EPF for up to 60 months. Without the certificate, EPF applies on full salary from day one, so apply before the posting starts.

## Where Austrian companies set up in India

- **Delhi NCR, Haryana.** AVL's Indian business and Plasser India's track-machine plant in Faridabad. Office staff follow Haryana's Shops and Establishments rules; plants the Factories Act.
- **Bengaluru and Mysuru, Karnataka.** AT&S's circuit-board plant at Nanjangud near Mysuru and engineering centres in Bengaluru. Part of a plant workforce may sit below the ₹21,000 ESI line, so plan ESI and GHI together.
- **Pune, Maharashtra.** Fronius India at Bhosari, and Austrian machinery and automotive suppliers serving the Chakan and Pimpri-Chinchwad auto belt alongside their German customers.
- **Mandideep and Bhopal, Madhya Pradesh.** Andritz's hydropower equipment plant at Mandideep. The hospital network is thinner than in the metros; check the GHI network near the plant before renewal.

Austrian companies with operations in India include AVL, Andritz, AT&S, voestalpine, Plasser & Theurer, Fronius, Swarovski, Red Bull.

## Benchmarks: what MNCs and GCCs offer in India

From [The Standard of Employee Benefits 2026–27](https://www.plumhq.com/standard-of-employee-benefits), Plum's report on 15,312 benefit plans, 5,20,100 claims and 74,543 checkups from Plum's FY26 book.

- **1.6×** MNC and GCC benefits spend per employee in India, against a funded Indian startup (nearly 3× a local Indian business). ([source](https://www.plumhq.com/standard-of-employee-benefits#s2-3))
- **43%** of MNCs and GCCs in India are Holistic Leaders: deep insurance plus real breadth of healthcare beside it. ([source](https://www.plumhq.com/standard-of-employee-benefits#s2-3))
- **₹7,50,000** median MNC/GCC sum insured, covering parents or in-laws, with ₹1,00,000 maternity cover and no copays or sub-limits. ([source](https://www.plumhq.com/standard-of-employee-benefits#s2-3))
- **~2%** of payroll buys India's top-quartile plan, against roughly 15% in the US, 10–25% across Europe and 8–15% across APAC. ([source](https://www.plumhq.com/standard-of-employee-benefits#s2-3-coverage))

## Further reading on plumhq.com

- [How MNCs structure health insurance for Indian subsidiaries](https://www.plumhq.com/blog/mnc-health-insurance-india-subsidiary-structure): Global programmes, local policies and who signs what.
- [Do you need to match headquarters' benefits in India?](https://www.plumhq.com/blog/gcc-match-headquarters-benefit-standards-india): Where to mirror the parent plan, and where India needs its own design.
- [Insurance for expatriate employees in India](https://www.plumhq.com/blog/insurance-coverage-expatriate-employees-gcc-india): Covering seconded staff alongside the local plan.
- [Group insurance vs ESI: a guide for employers](https://www.plumhq.com/blog/group-insurance-vs-esi-employers-guide): Who must be in ESI, and where group health insurance takes over.
- [How to calculate gratuity in India](https://www.plumhq.com/blog/how-to-calculate-gratuity): Formulas, worked examples and a free calculator.
- [The Standard of Employee Benefits 2026–27](https://www.plumhq.com/standard-of-employee-benefits): Benchmarks from 4,500+ Indian employee health plans.

Sources: Wirtschaftskammer Österreich (WKO), Beitragswesen Dienstnehmer 2026: contribution rates, Höchstbeitragsgrundlage €6,930 and BMSVG 1.53%; Arbeitsmarktservice (AMS), Urlaubsanspruch in Österreich and Sonderzahlungen; Abkommen zwischen der Republik Österreich und der Republik Indien über soziale Sicherheit, BGBl. III Nr. 60/2015, in force 1 July 2015; India–Austria Double Taxation Avoidance Convention, Notification GSR 682(E), 20 September 2001, amended by Notification S.O. 1370, 24 April 2020 (incometaxindia.gov.in); Code on Social Security 2020 and Code on Wages 2019, in force 21 November 2025; Payment of Gratuity Act 1972 and Maternity Benefit Act 1961.