# The India Employee Benefits Stack for Canadian companies

> Canadian parents are used to a public health base, CPP and EI deducted at source, and maternity and parental benefits paid by EI rather than the employer. In India the employer funds health cover, maternity pay and gratuity directly, and EPF replaces CPP at a higher rate on basic pay.

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/canada. Updated 2026-10-05. Part of The India Employee Benefits Stack: https://www.plumhq.com/india-benefits-stack.

## In short

- India and Canada have a social security agreement in force since 1 August 2015. Staff seconded from Canada with a certificate of coverage can stay in CPP and be exempt from Indian EPF for up to 60 months.
- India has no provincial health plan. Employees earning up to ₹21,000 a month are in ESI; above that the employer's statutory health obligation is zero, so Group Health Insurance carries the hospital costs a province pays at home.
- CPP maps to EPF (12% of basic from employer and employee), provincial severance pay to statutory gratuity after five years, and EI maternity benefits to 26 weeks of maternity leave paid in full by the employer.

## Questions

### Do Canadian assignees have to contribute to EPF in India?

Not if they are CPP-covered and hold a certificate of coverage under the India–Canada social security agreement, in force since 1 August 2015. They can stay in CPP for up to 60 months and be exempt from Indian EPF. Without the certificate, a foreign national contributes to EPF from day one on full salary, with no ₹15,000 ceiling. Quebec-based staff should confirm their position with Retraite Québec.

### Is there an equivalent of provincial health insurance in India?

No. India has no public health cover for salaried employees above ₹21,000 a month. Those at or below it sit in ESI, with 3.25% from the employer and 0.75% from the employee. Everyone else is covered only if the employer buys Group Health Insurance; the India median sum insured is ₹5,00,000 and global startups carry ₹10,00,000.

### Who pays for maternity leave in India?

The employer. The Maternity Benefit Act requires 26 weeks of full pay for the first two children and 12 weeks from the third; ESI covers it for ESI members. Unlike EI maternity and parental benefits, there is no public insurer to claim from. There is no statutory paternity leave under central law, so any paternity or parental leave is company policy.

### What replaces CPP and a group RRSP?

EPF. Establishments with 20+ employees contribute 12% of basic plus DA, with 8.33% to the pension scheme (EPS) and the balance to EPF, and employees contribute another 12%. That compares with CPP's 5.95% each on earnings up to $74,600 in 2026. Most MNC subsidiaries contribute on full basic rather than the ₹15,000 statutory wage ceiling.

### Is there severance pay in India?

Gratuity is India's statutory exit payment. Establishments with 10+ employees pay 15 days' last drawn salary per year of service after five continuous years, or after one year for fixed-term staff, capped at ₹20 lakh. Unlike Ontario severance pay, it is owed on resignation as well as dismissal. Notice periods are set in the employment contract.

## What changes when you come from Canada

### Assignees from Canada 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.
**Canada and India.** India and Canada have a social security agreement in force since 1 August 2015. CPP-covered staff seconded to India with a certificate of coverage can stay in CPP and be exempt from Indian EPF for up to 60 months, extendable in some cases. Quebec runs its own pension plan, so confirm the position for Quebec-based staff with Retraite Québec before relying on it.

### Mapping Canadian benefits to India

**At home.** Provincial health insurance as the base, an extended health and dental plan on top, CPP and EI through payroll, often a group RRSP, and group life and disability cover.
**In India.** Group Health Insurance (GHI) for health, EPF for retirement, Group Personal Accident and Group Term Life for accident and life cover, and gratuity as the statutory exit payment, funded through an insured gratuity scheme.

### Overlap between Toronto and India

**Time difference.** India is 9½ hours ahead of Toronto during daylight saving (March to early November) and 10½ hours ahead in winter, so the Toronto morning overlaps the Indian evening. Vancouver is three hours further behind.
**What to set up.** Agree who in India signs off endorsements, claims escalations and renewals, so nothing waits for headquarters' business hours.

### India–Canada tax treaty

**Treaty.** India and Canada have a double taxation avoidance agreement, signed in 1996 and in force since 6 May 1997. Short visits are usually exempt from Indian tax under its 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 Canada, and what it is called in India

Canadian employers build on a public base: provincial health plans pay for medically necessary hospital and physician care, and the group benefits plan adds drugs, dental and vision. India has no such base for salaried staff. Above ₹21,000 a month an employer's statutory health obligation is zero, and Group Health Insurance carries the hospital risk a province would carry at home. The statutory money goes elsewhere: EPF at 12% of basic from the employer and 12% from the employee, gratuity after five years and 26 weeks of employer-paid maternity leave.

| At home in Canada | In India | What changes for the employer |
| --- | --- | --- |
| Canada Pension Plan (CPP and CPP2): 5.95% each from employer and employee on earnings between $3,500 and $74,600, plus 4% each up to $85,000 (2026). | EPF and EPS (Employees' Provident Fund and Pension Scheme) | 12% of basic plus DA from the employer (8.33% to EPS, the balance to EPF) and 12% from the employee, for establishments with 20+ employees. Seconded staff with a certificate of coverage can stay in CPP for up to 60 months instead. |
| Employment Insurance (EI): Employee premium of 1.63% of insurable earnings up to $68,900; the employer pays 1.4 times that (2026). | No direct equivalent | Nothing to contribute for unemployment. What EI pays for at home, maternity and parental leave above all, becomes a direct employer cost in India: 26 weeks of full pay under the Maternity Benefit Act. |
| Provincial health insurance (OHIP, RAMQ, MSP and others): Public cover for medically necessary hospital and physician services under the Canada Health Act. | ESI below ₹21,000 a month; nothing statutory above it | There is no public base for salaried staff above the ESI ceiling. Group Health Insurance pays the hospital bills a province would pay at home, and candidates hired at ₹8 LPA and above expect it. |
| Employer health payroll tax (Ontario Employer Health Tax (EHT)): Up to 1.95% of Ontario payroll, with a $1 million exemption for eligible employers. | ESI: 3.25% employer, 0.75% employee | Applies only to employees earning up to ₹21,000 a month. Above that ceiling there is no health payroll levy; the employer buys a GHI premium instead. |
| Extended health and dental (Group benefits plan): Employer plan for prescription drugs, dental, vision and paramedical care that provincial plans do not cover. | Group Health Insurance (GHI), with an optional outpatient add-on | GHI is built around hospitalisation, the reverse of a Canadian plan. Most insurers need a group of at least 7. The India median sum insured is ₹5,00,000; global startups carry ₹10,00,000. Routine dental and vision sit in an outpatient add-on, if covered. |
| Group retirement savings (Group RRSP / DPSP): Voluntary, often employer-matched retirement savings on top of CPP. | EPF, which is statutory | There is no separate matched plan to design: EPF is set by law at 12% of basic from each side. Most MNC subsidiaries contribute on full basic rather than the ₹15,000 wage ceiling. |
| Maternity and parental benefits (EI maternity and parental benefits): 15 weeks' maternity and up to 35 weeks' standard parental benefit per parent, at 55% of earnings up to $729 a week. | Maternity Benefit Act: 26 weeks of full pay | Paid in full by the employer, not by a public insurer: 26 weeks for the first two children, 12 weeks from the third (ESI covers it for ESI members). Crèche required at 50+ employees. No statutory paternity leave under central law. |
| Vacation (Vacation time and vacation pay): Set by province. In Ontario, two weeks and 4% vacation pay, rising to three weeks and 6% after five years. | Earned leave under the state Shops and Establishments Act | Earned leave is typically 12 to 18 days a year plus casual and sick leave, set state by state much as vacation is set province by province. Public holidays vary by state, with three national holidays. |
| Termination and severance (ESA notice and severance pay): Ontario: up to eight weeks' notice, plus a week's pay per year of service, up to 26, after five years at larger employers. | Gratuity under the Payment of Gratuity Act | Owed on any exit after five continuous years, including resignation: 15 days' last drawn salary per year of service, capped at ₹20 lakh, for establishments with 10+ employees. Fixed-term staff earn it after one year. Notice periods are set by contract. |
| Workers' compensation (WSIB, CNESST and provincial boards): Provincial no-fault insurance for workplace injury, funded by employer premiums. | Employees' Compensation Act 1923 (or ESI where covered) plus Group Personal Accident (GPA) | The Act covers employees not in ESI, and the employer insures the liability. GPA is the usual voluntary add-on for accidental death and disability. |
| Group life and disability (Group life and LTD): Employer group life insurance and long-term disability cover within the benefits plan. | Group Term Life (GTL), GPA and EDLI through EPFO | EDLI gives life cover of up to ₹7 lakh through EPFO. GTL at 3 to 5 times CTC is common for white-collar staff. Long-term disability income cover is not a standard part of Indian group programmes. |

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

1. **The province pays for hospitals, so our plan only needs drugs and dental.** India has no provincial plan. Above ₹21,000 a month an employer's statutory health obligation is zero, and Group Health Insurance is what pays for hospital care. Candidates hired at ₹8 LPA and above expect it; global startups in India carry ₹10,00,000 sum insured.
2. **EI pays for maternity and parental leave, so the cost is small.** The Maternity Benefit Act requires 26 weeks of full pay for the first two children and 12 weeks from the third, paid by the employer (ESI covers it for ESI members). There is no public insurer to claim from, and no statutory paternity leave under central law.
3. **All our Canadian staff are covered by the social security agreement.** The 2015 agreement covers CPP-covered staff seconded for up to 60 months, with a certificate of coverage. Quebec employees are on the QPP and need Quebec's separate arrangement, so confirm it with Retraite Québec. Without a certificate, foreign nationals join EPF from day one on full salary.
4. **Budget EPF like CPP: about 6% from each side.** EPF is 12% of basic plus DA from the employer and 12% from the employee. Since 21 November 2025, allowances above 50% of total remuneration are added back into wages for EPF and gratuity, so a low-basic structure no longer cuts the bill.
5. **Exit costs follow provincial standards and common-law notice.** India adds a statutory exit payment owed on any exit, including resignation: gratuity of 15 days' last drawn salary per year of service after five continuous years, capped at ₹20 lakh. Fixed-term staff earn it after one year. Provision it from the first payroll.
6. **Dental and vision belong in the core health plan.** Indian GHI is built around hospitalisation; routine dental and vision sit outside it, in an optional outpatient add-on. Put the budget into sum insured and parental cover first: parents account for about 40% of claims by relationship in Plum's data.
7. **Our provincial vacation policy can apply in India.** Leave comes from state Shops and Establishments Acts: earned leave is typically 12 to 18 days a year plus casual and sick leave, and public holidays vary by state, with three national holidays. Each Indian state is its own leave regime, much like each province.

## Canada vs India, benefit by benefit

| Benefit | Canada | India |
| --- | --- | --- |
| Statutory health cover | Provincial plans cover medically necessary hospital and physician services for residents. | ESI for employees earning up to ₹21,000 a month. Nothing statutory above that line. |
| Employer health levy | Some provinces levy payroll tax; Ontario's Employer Health Tax is up to 1.95% above a $1 million exemption. | ESI at 3.25% from the employer below the ceiling. Above it, a voluntary GHI premium. |
| Pension | CPP: 5.95% each up to $74,600, plus CPP2 at 4% each up to $85,000 (2026). | EPF and EPS: 12% of basic plus DA from employer and employee. |
| Unemployment insurance | EI: 1.63% from the employee and 1.4 times that from the employer, up to $68,900 (2026). | None. Exit costs sit in contractual notice and gratuity. |
| Maternity | EI: 15 weeks at 55% of earnings, up to $729 a week. | 26 weeks of full pay from the employer for the first two children; 12 weeks from the third. |
| Parental leave | EI: up to 35 weeks standard or 61 weeks extended per parent. | No statutory paternity or parental leave under central law. |
| Vacation | Set by province; Ontario gives two weeks and 4% pay, three weeks and 6% after five years. | Earned leave typically 12 to 18 days plus casual and sick leave, set by state law. |
| Supplementary health | Extended health and dental plans cover drugs, dental and vision. | GHI covers hospitalisation; outpatient, dental and vision only through an add-on. |
| Exit payment | Ontario: up to eight weeks' notice; severance of a week per year, up to 26, after five years at larger employers. | Gratuity on any exit after five years: 15 days' last drawn salary per year, capped at ₹20 lakh. |
| Seconded staff | CPP-covered staff stay in CPP for up to 60 months with a certificate of coverage. | Exempt from EPF for that period with the certificate; otherwise EPF on full salary. |
| Life and disability | Group life and long-term disability are standard parts of a benefits plan. | EDLI up to ₹7 lakh through EPFO; GTL at 3 to 5 times CTC and GPA are common. |

## Staff seconded from Canada

CPP-covered assignees can stay in CPP for up to 60 months under the 2015 agreement with a certificate of coverage, which exempts them from Indian EPF. Without one, they join EPF from day one on full salary. Quebec-based staff need Quebec's separate arrangement, so confirm it first. Check provincial health eligibility for long absences, keep an international medical plan, and add the assignee to the India GHI for cashless network admission.

## Where Canadian companies set up in India

- **Bengaluru, Karnataka.** Technology centres for CGI, Thomson Reuters, OpenText and lululemon. Highest GHI adoption of any city in Plum's benchmark, so candidates compare offers against global plans.
- **Hyderabad, Telangana.** OpenText and CGI delivery centres in a dense GCC market. Highest average maternity claim of any city in Plum's benchmark; set the maternity sub-limit with that in mind.
- **Mumbai, Maharashtra.** Brookfield's India real estate business and Fairfax-backed companies such as Thomas Cook India. Highest average claim size of any city in Plum's benchmark.
- **Mehsana, Gujarat.** McCain Foods' potato processing plant. Factory workers earning up to ₹21,000 a month fall under ESI, and leave follows the Factories Act rather than a Shops and Establishments Act.

Canadian companies with operations in India include CGI, Thomson Reuters, OpenText, Brookfield, Fairfax Financial, Sun Life, McCain Foods, CAE, lululemon.

## 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: Government of Canada, CPP contribution rates and maximums for 2026; Canada Employment Insurance Commission, 2026 Employment Insurance premium rate; Agreement on Social Security between Canada and India, in force 1 August 2015 (ESDC and CRA); Government of Canada, EI maternity and parental benefits; Canada Health Act; Ontario Ministry of Labour, Your guide to the Employment Standards Act: vacation, termination and severance pay; Ontario Ministry of Finance, Employer Health Tax; India–Canada Agreement for the avoidance of double taxation, signed 1996, in force 6 May 1997; Ministry of External Affairs, India, list of social security agreements; Code on Social Security 2020 and Code on Wages 2019, in force 21 November 2025.