# The India Employee Benefits Stack for Saudi companies

> Saudi parents are used to employer-provided family health insurance, an end-of-service award, GOSI that costs 2% for expatriates and no tax on salaries. In India, health cover above ₹21,000 a month is voluntary, gratuity needs five years, foreign staff pay full EPF and salaries are taxed at source.

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

## In short

- Saudi law requires employers to insure employees and their dependants. India has no statutory health cover for staff earning above ₹21,000 a month; employers buy Group Health Insurance, voluntary in law but expected by candidates hired at ₹8 LPA and above.
- GOSI covers expatriates only for occupational hazards (2%, employer-paid). In India, foreign nationals are International Workers and pay full EPF from day one: 12% employer plus 12% employee on full salary, with no ₹15,000 ceiling.
- The Saudi end-of-service award maps to Indian statutory gratuity: 15 days' last drawn salary per year of service, payable after five continuous years, capped at ₹20 lakh. No India–Saudi social security agreement is in force.

## Questions

### Do Saudi companies have to provide health insurance in India?

Not by law, for most staff. Employees earning up to ₹21,000 a month are covered by ESI, funded by 3.25% from the employer and 0.75% from the employee. Above that line there is no statutory duty and no dependants' rule. Group Health Insurance is voluntary, but candidates hired at ₹8 LPA and above expect it; the India median sum insured is ₹5,00,000.

### Our expatriates pay nothing to GOSI. Do they pay EPF in India?

Yes. Foreign nationals employed in India are International Workers and join EPF from day one, at 12% from the employer and 12% from the employee on full salary, with no ₹15,000 ceiling. India and Saudi Arabia have no social security agreement, so there is no exemption, and withdrawal is generally possible only at 58 or on permanent incapacity.

### How does Indian gratuity compare with the Saudi end-of-service award?

The early-year rate is similar: 15 days' last drawn salary per year in India against half a month's wage per year for the first five years in Saudi Arabia. But Indian gratuity is payable only after five continuous years (one year for fixed-term staff), is capped at ₹20 lakh, and does not rise to a full month after year five.

### Is salary paid to a Saudi secondee taxed in India?

Usually, if the work is done in India. Saudi Arabia does not tax employment income, but India does, through monthly tax deducted at source. The India–Saudi Arabia tax treaty, in force since 1 November 2006, can exempt short visits under its 183-day and employer conditions. Long secondments can also create a permanent establishment for the parent.

### What maternity leave applies in India?

26 weeks of full pay for the first two children and 12 weeks from the third, under the Maternity Benefit Act, paid by the employer (ESI covers it for ESI members). That is more than double Saudi Arabia's 12 weeks. A crèche is required at 50+ employees, and there is no statutory paternity leave under central law.

## What changes when you come from Saudi Arabia

### Assignees from Saudi Arabia 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.
**Saudi Arabia and India.** India and Saudi Arabia have no social security agreement. A foreign national seconded from the Kingdom joins EPF from day one on full salary, with no certificate of coverage to claim an exemption, and can generally withdraw it only at 58 or on permanent incapacity. Any GOSI contributions that continue at home are an extra cost on top.

### Mapping Saudi benefits to India

**At home.** GOSI annuities, occupational hazards and SANED for Saudi staff; occupational hazards only for expatriates; employer-paid health insurance for employees and dependants; and an end-of-service award under the Labour Law.
**In India.** EPF for every employee, foreign staff included; ESI or Group Health Insurance (GHI) for health; the Employees' Compensation Act and Group Personal Accident for injury; statutory gratuity after five years, best funded through an insured scheme.

### Overlap between Riyadh and India

**Time difference.** India is 2½ hours ahead of Riyadh all year (neither country uses daylight saving), so most of the Riyadh working day falls within Indian office hours.
**What to set up.** Agree who in India signs off endorsements, claims escalations and renewals, so nothing waits for headquarters' business hours.

### India–Saudi Arabia tax treaty

**Treaty.** India and Saudi Arabia have a double taxation avoidance agreement, signed in 2006 and in force since 1 November 2006. Short visits can be exempt from Indian tax under its 183-day and employer conditions; check the exact article before relying on it. Saudi Arabia does not tax employment income, so Indian tax on a posting is a real cost.
**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 Saudi Arabia, and what it is called in India

A Saudi employer pays GOSI for every employee, but for expatriates only the occupational hazards branch applies, at 2% of wages; pensions are for Saudi nationals. The same employer must insure staff and their dependants under the cooperative health insurance law. India reverses both habits. Foreign nationals employed in India join the provident fund (EPF) from day one on full salary, while health insurance above ₹21,000 a month is voluntary in law and bought as a benefit. That gap explains most first-year questions from a Riyadh HR team.

| At home in Saudi Arabia | In India | What changes for the employer |
| --- | --- | --- |
| Health insurance (التأمين الصحي التعاوني, At-taʾmīn aṣ-ṣiḥḥī at-taʿāwunī): Cooperative health insurance: private employers must insure Saudi and expatriate employees and their dependants. Supervised by the Insurance Authority since 2024, after CCHI. | ESI for employees earning up to ₹21,000 a month; Group Health Insurance (GHI) for everyone else | No statutory duty above the ESI ceiling and no dependants' rule. GHI is voluntary but expected at ₹8 LPA and above. Decide family cover deliberately: parents are about 40% of claims by relationship in Plum's data. |
| Pension (annuities) (فرع المعاشات, Farʿ al-maʿāshāt · GOSI annuities): Pension branch for Saudi nationals: 9% employer plus 9% employee. For Saudis first insured from July 2024, the rate rises 0.5 points a year to 11% each. | EPF and EPS (Employees' Provident Fund and Pension Scheme) | Nationality does not decide coverage in India. Every employee in an establishment with 20+ staff joins: 12% employer (8.33% to EPS) and 12% employee on basic plus DA, with foreign nationals contributing on full salary. |
| Occupational hazards insurance (فرع الأخطار المهنية, Farʿ al-akhṭār al-mihaniyya): GOSI work-injury branch: 2% of the contributory wage, paid by the employer, compulsory for Saudi and expatriate workers alike. | Employees' Compensation Act 1923 (or ESI where covered) plus Group Personal Accident (GPA) | India has no contributory work-injury fund for staff outside ESI. The employer carries the liability under the Employees' Compensation Act and insures it, with Group Personal Accident and Group Term Life as the usual add-ons. |
| Unemployment insurance (ساند, SANED): Unemployment insurance for Saudi nationals: 0.75% from the employer and 0.75% from the employee. | None | No unemployment scheme to join or deduct for. Severance risk sits in notice pay and statutory gratuity. |
| End-of-service award (مكافأة نهاية الخدمة, Mukāfaʾat nihāyat al-khidma): Half a month's wage per year for the first five years and a full month per year after, on the last wage. Resignation before ten years reduces it. | Statutory gratuity | 15 days' last drawn salary per year, close to the Saudi rate for early years, but payable only after five continuous years (one year for fixed-term staff), with no step-up after year five, and capped at ₹20 lakh. Provision it from day one and insure it. |
| Housing allowance (بدل السكن, Badal as-sakan): Housing allowance paid alongside basic salary. Basic plus housing is the GOSI contributory wage, capped at SAR 45,000 a month. | House Rent Allowance (HRA) | EPF runs on basic plus DA, not basic plus housing. If allowances excluded from wages exceed 50% of total remuneration, the excess is added back into wages for EPF, gratuity and other statutory calculations. |
| Annual leave (الإجازة السنوية, Al-ijāza as-sanawiyya): 21 days a year, rising to 30 days after five years with the same employer. | Earned leave under the state Shops and Establishments Act, plus casual and sick leave | Typically 12 to 18 days of earned leave plus separate casual and sick leave, set by each state. Public holidays vary by state; only three are national. |
| Maternity leave (إجازة الوضع, Ijāzat al-waḍʿ): 12 weeks on full pay since the February 2025 amendments, at least six of them after the birth; fathers get three days' paternity leave. | Maternity Benefit Act: 26 weeks paid by the employer (12 weeks from the third child); no statutory paternity leave | More than double the Saudi entitlement, paid by the employer (ESI pays for ESI members). A crèche is required at 50+ employees. Set the GHI maternity limit against a normal delivery of about ₹1 lakh and a C-section of about ₹1.25 lakh. |

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

1. **Expatriates cost only the 2% occupational hazards rate, as with GOSI.** In India, foreign nationals are International Workers. They join EPF from day one on full salary, with no ₹15,000 ceiling: 12% from the employer and 12% from the employee. With no India–Saudi social security agreement there is no exemption, and withdrawal is generally possible only at 58 or on permanent incapacity.
2. **Health insurance for staff and families is compulsory in India too.** Only employees earning up to ₹21,000 a month have statutory cover, through ESI. Above that line the employer's statutory health obligation is zero, and no law requires dependants' cover. Group Health Insurance is voluntary, but candidates hired at ₹8 LPA and above expect it.
3. **The end-of-service award builds from year one, so short-service leavers get something.** Indian gratuity is payable only after five continuous years (one year for fixed-term employees), at 15 days' last drawn salary per year, capped at ₹20 lakh. Unlike the Saudi award, nothing is owed to a permanent employee who leaves after three years.
4. **There is no tax on salaries, so offers can be quoted net.** India taxes salaries and the employer deducts tax at source each month, so offers must be built as gross cost to company. Employer GHI premiums are deductible under Section 36(1)(ib), are not a taxable perquisite under Section 17(2), and carry 18% GST.
5. **Our standard Gulf salary structure will work in India.** Since 21 November 2025, if allowances excluded from wages exceed 50% of total remuneration, the excess is added back into wages for EPF, gratuity and other statutory calculations. A package with a modest basic and large housing and transport allowances raises the Indian statutory bill.
6. **Twelve weeks' maternity leave is the benchmark to budget for.** The Maternity Benefit Act gives 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). A crèche is required at 50+ employees. There is no statutory paternity leave under central law, unlike Saudi Arabia's three days.
7. **Work injuries are a social insurance matter, as with GOSI.** Outside ESI, India has no work-injury fund. The employer is liable under the Employees' Compensation Act 1923 and must insure that liability itself. Group Personal Accident and Group Term Life, often at 3 to 5 times CTC, are the usual add-ons.
8. **Parents fall outside dependants' cover, so they can be ignored.** Parental cover is a common ask in India, and parents are the largest claims category by relationship, about 40% of claims in Plum's data. Covering them is a deliberate pricing decision against an India median sum insured of ₹5,00,000.

## Saudi Arabia vs India, benefit by benefit

| Benefit | Saudi Arabia | India |
| --- | --- | --- |
| Statutory health cover | Employers must insure Saudi and expatriate employees and their dependants. | ESI for employees earning up to ₹21,000 a month. Nothing above that line, and no dependants' rule. |
| Pension for nationals | GOSI annuities: 9% employer plus 9% employee; rising to 11% each for Saudis first insured from July 2024. | EPF and EPS: 12% employer plus 12% employee on basic plus DA. |
| Foreign staff | Occupational hazards branch only: 2%, paid by the employer. | International Workers: full EPF from day one on full salary, with no ₹15,000 ceiling. |
| Contribution base | Basic wage plus housing allowance, capped at SAR 45,000 a month. | Basic plus DA. ₹15,000 statutory ceiling for Indian staff, though most MNC subsidiaries contribute on full basic; none for International Workers. |
| Work injury | GOSI occupational hazards branch, 2% employer-paid. | Employees' Compensation Act, insured by the employer, or ESI where covered. |
| Unemployment insurance | SANED: 0.75% employer plus 0.75% employee, Saudi nationals only. | None. |
| End-of-service lump sum | Half a month's wage per year for five years, a full month per year after; reduced on resignation. | Gratuity: 15 days' last drawn salary per year after five years, capped at ₹20 lakh. |
| Maternity | 12 weeks on full pay since February 2025. | 26 weeks of full pay for the first two children, paid by the employer. |
| Paternity | Three days, taken within a week of the birth. | No statutory paternity leave under central law. |
| Annual leave | 21 days; 30 days after five years with the employer. | Earned leave of 12 to 18 days plus casual and sick leave, set by state law. |
| Income tax on salary | None on employment income. | Salaries are taxed, and the employer deducts tax at source every month. |

## Staff seconded from Saudi Arabia

Secondees from Saudi Arabia usually keep a home or international medical plan, which reimburses later. Add them to an India-admitted GHI for cashless treatment at network hospitals. India and Saudi Arabia have no social security agreement, so a foreign national on Indian payroll joins EPF from day one on full salary and can generally withdraw it only at 58 or on permanent incapacity. Indian nationals returning from the Kingdom are not International Workers.

## Where Saudi companies set up in India

- **Delhi NCR, Delhi and Haryana.** Aramco Asia India's office in New Delhi, SABIC's corporate and business office in the capital region, and Saudia's office in Connaught Place.
- **Bengaluru, Karnataka.** SABIC's Research and Technology centre, one of the group's technology centres worldwide, with more than 300 scientists.
- **Vadodara, Gujarat.** SABIC's manufacturing site. Plant staff earning up to ₹21,000 a month fall under ESI; above that line, group health and personal accident cover are the employer's choice.
- **Mumbai, Maharashtra.** Bahri's branch office in Powai and flynas's city office, serving shipping and the Gulf travel corridor.
- **Ranjangaon, near Pune, Maharashtra.** Zamil Steel's pre-engineered buildings plant. A factory workforce where ESI, the Employees' Compensation Act and accident cover matter most.

Saudi companies with operations in India include Saudi Aramco, SABIC, Ma'aden, Zamil Steel, Bahri, Saudia, flynas, Petromin.

## 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: General Organization for Social Insurance (GOSI): contribution rates, contributory wage limits and coverage of non-Saudi workers; Saudi Social Insurance Law, effective 3 July 2024: annuity rates for new entrants rising from July 2025; Saudi Labour Law, Articles 84, 85 and 109, as amended by Royal Decree M/44 (in force 19 February 2025); Cooperative Health Insurance Law; Insurance Authority, health insurance supervision since 4 March 2024; Income Tax Department of India: India–Saudi Arabia Double Taxation Avoidance Agreement, in force 1 November 2006; Company announcements: SABIC India, Aramco Asia India, Ma'aden India office, Zamil Steel India, Bahri Mumbai, flynas Mumbai, Petromin and HPCL.