# The India Employee Benefits Stack for UAE companies

> UAE parents are used to mandatory employer health insurance, a gratuity that accrues from the first year and no income tax on salaries. In India, health cover is a voluntary benefit above ₹21,000 a month, gratuity needs five years, salaries are taxed at source and foreign staff pay into EPF from day one.

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

## In short

- UAE law has made employer health insurance mandatory in every emirate since 1 January 2025. India has no equivalent for salaried staff above ₹21,000 a month; employers buy Group Health Insurance, voluntary in law but expected at ₹8 LPA and above.
- UAE end-of-service gratuity (21 days' basic per year for five years, then 30) maps to Indian statutory gratuity: 15 days' last drawn salary per year of service, payable after five continuous years, capped at ₹20 lakh.
- No social security agreement links India and the UAE. Foreign staff employed in India join EPF from day one on full salary, and from a non-agreement country can generally withdraw it only at 58 or on permanent incapacity.

## Questions

### Is employer health insurance mandatory in India, as it is in the UAE?

No. Since 1 January 2025 every emirate requires employers to insure private-sector staff. India has no equivalent above ₹21,000 a month: employees at or below that wage 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, which candidates hired at ₹8 LPA and above expect.

### How does Indian gratuity compare with UAE end-of-service gratuity?

It is smaller and later. The UAE pays 21 days' basic salary per year for the first five years and 30 days after, once one year is served. India pays 15 days' last drawn salary per year of service, only after five continuous years (one year for fixed-term employees), capped at ₹20 lakh. It is statutory in establishments with 10+ employees.

### Do staff seconded from the UAE have to contribute to EPF?

Foreign nationals employed in India do, from day one and on full salary, because India and the UAE have no social security agreement and so no certificate of coverage. Employer and employee each pay 12%, with no ₹15,000 ceiling. International Workers from non-agreement countries can generally withdraw EPF only at 58 or on permanent incapacity.

### Our staff pay no income tax in the UAE. What changes in India?

Salaries are taxed in India, and the employer deducts tax at source each month. The India–UAE tax treaty, in force since 1993, can exempt short business visits under its 183-day and employer conditions, but a secondee on Indian payroll is taxed in India. Employer GHI premiums are deductible under Section 36(1)(ib) and are not a perquisite under Section 17(2).

### How much maternity leave must we give 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 pays for ESI members). That compares with 60 days in the UAE. A crèche is required at 50+ employees, and there is no statutory paternity leave under central law.

### What does a competitive health plan for an Indian team look like?

Group Health Insurance with a sum insured of ₹5,00,000 matches the India median; global startups in India carry ₹10,00,000. Decide early whether to cover parents, who account for about 40% of claims by relationship in Plum's data. Group Personal Accident and Group Term Life, often at 3 to 5 times CTC, are the usual add-ons. 18% GST applies to group health premiums.

## What changes when you come from the United Arab Emirates

### Assignees from the UAE 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.
**UAE and India.** India and the UAE have no social security agreement. A foreign national seconded from the UAE 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 home-country contributions that continue during the posting are an extra cost on top.

### Mapping UAE benefits to India

**At home.** Mandatory employer-paid health insurance, an end-of-service gratuity on basic salary after one year (DEWS contributions inside DIFC), unemployment insurance paid by the employee, and GPSSA pension for Emirati staff only.
**In India.** Group Health Insurance (GHI) for health, EPF for retirement savings, ESI for anyone earning up to ₹21,000 a month, and statutory gratuity after five years. Fund gratuity through an insured scheme rather than carrying it as an unfunded liability.

### Overlap between Dubai and India

**Time difference.** India is 1½ hours ahead of Dubai all year (neither country uses daylight saving), so the two working days overlap almost completely.
**What to set up.** Agree who in India signs off endorsements, claims escalations and renewals, so nothing waits for headquarters' business hours.

### India–UAE tax treaty

**Treaty.** India and the UAE have a double taxation avoidance agreement, signed in 1992 and in force since 22 September 1993, amended by protocols in 2007 and 2012. Short visits can be exempt from Indian tax under its 183-day and employer conditions; check the exact article before relying on it. The UAE does not tax employment income, so Indian tax on a posting is a real cost, not a credit.
**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 the United Arab Emirates, and what it is called in India

A UAE employer works with two firm legal duties: insure every private-sector employee's health, and pay an end-of-service gratuity of 21 days' basic salary per year once an employee completes one year. India reverses both. Group health cover is voluntary in law, though candidates hired at ₹8 LPA and above expect it, and statutory gratuity is 15 days' last drawn salary per year, payable only after five continuous years. Add a provident fund that foreign staff must join from day one, and you have most of the first-year questions a Dubai or Abu Dhabi HR team asks.

| At home in the United Arab Emirates | In India | What changes for the employer |
| --- | --- | --- |
| Health insurance (التأمين الصحي, At-taʾmīn aṣ-ṣiḥḥī): Employer-paid health insurance, mandatory for private-sector employees in every emirate since 1 January 2025. The basic package costs AED 320 a year. | ESI for employees earning up to ₹21,000 a month; Group Health Insurance (GHI) for everyone else | No statutory cover above the ESI ceiling. GHI is voluntary in law but expected by candidates hired at ₹8 LPA and above. The India median sum insured is ₹5,00,000; global startups in India carry ₹10,00,000. |
| End-of-service gratuity (مكافأة نهاية الخدمة, Mukāfaʾat nihāyat al-khidma): 21 days' basic salary per year for the first five years and 30 days per year after, once one year is served; capped at two years' wage. | Statutory gratuity | Smaller and later: 15 days' last drawn salary per year, payable after five continuous years (one year for fixed-term staff), capped at ₹20 lakh. A permanent employee who leaves in year three gets nothing by law. Provision it from day one and insure it. |
| Pension for UAE nationals (الهيئة العامة للمعاشات والتأمينات الاجتماعية, GPSSA): Pension for UAE nationals in the private sector, run federally by GPSSA and in Abu Dhabi by ADPF. Expatriates are excluded and receive gratuity instead. | 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) plus 12% employee on basic plus DA, and foreign nationals contribute on full salary from day one. |
| DIFC workplace savings (DEWS, DIFC Employee Workplace Savings): Funded plan replacing gratuity in DIFC since 2020: the employer pays 5.83% of monthly basic wage for the first five years, then 8.33%. | EPF, plus a funded gratuity scheme | India has no plan that replaces gratuity. EPF builds retirement savings every month, and gratuity remains a separate statutory liability, best funded through an insurer-managed gratuity scheme. |
| Unemployment insurance (التأمين ضد التعطل عن العمل, ILOE · Involuntary Loss of Employment): Compulsory since 2023 and paid by the employee: AED 5 a month on basic salary up to AED 16,000, AED 10 above. | None | No scheme to join and no deduction to run. Severance risk sits in notice pay and statutory gratuity. |
| Housing allowance (بدل السكن, Badal as-sakan): Contractual housing allowance paid outside basic salary, so it does not count toward gratuity. | House Rent Allowance (HRA) | Allowance-heavy UAE structures meet the Labour Codes: 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): 30 days' paid leave a year after one year of service; two days a month between six and twelve months. | Earned leave under the state Shops and Establishments Act, plus casual and sick leave | Expect 12 to 18 days of earned leave plus separate casual and sick leave, set by state law rather than 30 days nationally. Public holidays also vary by state; only three are national. |
| Maternity and parental leave (إجازة الوضع, Ijāzat al-waḍʿ): 60 days' maternity leave, 45 on full pay and 15 on half pay, plus five working days of parental leave for either parent. | Maternity Benefit Act: 26 weeks paid by the employer (12 weeks from the third child); no statutory paternity leave | About three times the UAE entitlement, paid by the employer (ESI pays for ESI members). A crèche is required at 50+ employees. Set the GHI maternity cover against a normal delivery of about ₹1 lakh and a C-section of about ₹1.25 lakh. |

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

1. **Health insurance is mandatory in India too, as in every emirate.** 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. Group Health Insurance is voluntary in law, but candidates hired at ₹8 LPA and above expect it.
2. **Gratuity accrues from year one, so a three-year leaver gets paid.** Indian statutory gratuity is payable only after five continuous years of service (one year for fixed-term employees). It is 15 days' last drawn salary per year against 21 days' basic in the UAE, capped at ₹20 lakh. Permanent staff who leave sooner receive nothing unless the contract promises more.
3. **There is no income tax, so pay can be quoted net.** India taxes salaries, and the employer deducts tax at source every month. Offers drafted as tax-free UAE figures need rebuilding as gross cost to company. Employer GHI premiums are deductible under Section 36(1)(ib) and are not a taxable perquisite under Section 17(2).
4. **Expatriates don't pay into a pension, so foreign staff are exempt.** In the UAE only nationals join GPSSA. In India, foreign nationals are International Workers: they join EPF from day one on full salary, with no ₹15,000 ceiling. With no India–UAE social security agreement there is no exemption, and withdrawal is generally possible only at 58 or on permanent incapacity.
5. **Gratuity runs on basic salary, so keep basic low.** 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 UAE-style package with a small basic and large housing and transport allowances no longer lowers the Indian statutory bill.
6. **Sixty days' maternity leave is the standard 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, unlike the UAE's five days of parental leave.
7. **A basic plan for the employee alone is enough.** In India, family cover is what candidates compare. Parents are the largest claims category by relationship, about 40% of claims in Plum's data, and global startups in India carry a ₹10,00,000 sum insured against an India median of ₹5,00,000.
8. **Our UAE regional medical plan can cover the India team.** A regional plan usually reimburses after the event. An India-admitted Group Health Insurance policy gives cashless treatment at network hospitals, and its premium is deductible under Section 36(1)(ib). Most insurers write it from a minimum group of 7, and 18% GST applies.

## The United Arab Emirates vs India, benefit by benefit

| Benefit | United Arab Emirates | India |
| --- | --- | --- |
| Statutory health cover | Mandatory employer-paid health insurance for private-sector employees in every emirate since 1 January 2025. | ESI for employees earning up to ₹21,000 a month. Nothing above that line. |
| Cost of the minimum | Basic package from AED 320 a year per employee. | ESI: 3.25% employer and 0.75% employee on wages. Above the ceiling, Group Health Insurance is voluntary. |
| Retirement savings | GPSSA pension for UAE nationals only. Expatriates have no pension scheme. | EPF for every employee in establishments with 20+ staff: 12% employer plus 12% employee on basic plus DA. |
| Foreign staff | Excluded from GPSSA; covered by end-of-service gratuity instead. | International Workers: EPF from day one on full salary, with no ₹15,000 ceiling. |
| End-of-service lump sum | 21 days' basic per year for five years, 30 days after; from one year of service; capped at two years' wage. | Gratuity: 15 days' last drawn salary per year after five years, capped at ₹20 lakh. |
| Free zones | DIFC replaces gratuity with DEWS: 5.83% of basic monthly, 8.33% after five years. | One national regime; only leave and public holidays vary by state. |
| Unemployment insurance | ILOE, compulsory since 2023 and paid by the employee: AED 5 or AED 10 a month. | None. |
| Maternity | 60 days: 45 on full pay, 15 on half pay. | 26 weeks of full pay for the first two children, paid by the employer. |
| Paternity | Five working days of paid parental leave for either parent. | No statutory paternity leave under central law. |
| Annual leave | 30 days a year after one year of service. | 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. |

## What headquarters is used to

In the UAE, health cover is a legal duty that falls on the employer, and most of the workforce is expatriate. That is the baseline a UAE headquarters brings to India, where statutory health cover stops at ₹21,000 a month.

- **88%** of the UAE's population are expatriates, which drives demand for employer health cover
- **≈$88** a year per employee for the basic mandatory health plan introduced in 2025
- **$818–$2,750+** a year per employee for the comprehensive plans many employers upgrade to
- **16.3%** diabetes prevalence in the UAE, against 9.3% worldwide

Source: Benefits Beyond Borders 2025, Plum's report on benefits in the economies investing in India (UAE chapter, citing BMJ Public Health, Population Health Metrics, Expatica and market premium data). https://www.plumhq.com/benefits-beyond-borders

## Staff seconded from the United Arab Emirates

Staff seconded from the UAE often keep a regional or international medical plan. Add them to an India-admitted GHI anyway: it gives cashless admission at network hospitals without a deposit. There is no India–UAE 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. An Indian national returning from Dubai is not an International Worker.

## Where UAE companies set up in India

- **Mumbai, Maharashtra.** Indian branches of Emirates NBD, Mashreq and First Abu Dhabi Bank, and DP World's container terminals at Nhava Sheva.
- **Gurugram and Delhi, Haryana and Delhi.** Emaar India is headquartered in Gurugram, and Emirates and Etihad run India offices in the capital region.
- **Kochi and Thiruvananthapuram, Kerala.** Lulu Group's malls and IT office space. Kerala has close family and workforce ties to the UAE.
- **Bengaluru, Karnataka.** Landmark Group runs its Indian retail business, including Lifestyle and Max, from here; Lulu also has a mall in the city.

UAE companies with operations in India include DP World, Emaar, Lulu Group, Landmark Group, Emirates, Etihad Airways, Emirates NBD, Mashreq, First Abu Dhabi Bank.

## 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))

### India's top-quartile plan against the UAE

| | India | The UAE |
|---|---|---|
| Benefits budget, share of payroll | ~2–3.5% (2% typical), plus 13% PF and 4.81% gratuity | ~8–12%; employer-paid health insurance mandatory, plus ~5.8% end-of-service |
| What the employee still pays | Nothing: no deductible, no copay or coinsurance, no room-rent limit, no waiting period | 10–20% inpatient copayment; outpatient $27–$51 a visit; dental ~$1,000 and vision ~$250 caps |
| Who is on the policy | Employee, spouse, up to 4 children, 2 parents or in-laws, LGBTQ+ and live-in partners | Employee mandatory; a nominal employee contribution towards dependants |

India's top-quartile plan is the only one of the seven that includes parents, and treatments cost 60–90% less than in the US, Europe or Australia. 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: UAE Ministry of Human Resources and Emiratisation (MOHRE): Health Insurance Scheme for private-sector employees and domestic workers, from 1 January 2025; Federal Decree-Law No. 33 of 2021 on the Regulation of Employment Relations: gratuity, annual leave, maternity and parental leave; UAE Government portal (u.ae): pension schemes for expatriate workers; annual leave in the private sector; MOHRE: Unemployment Insurance Scheme (Involuntary Loss of Employment), from 1 January 2023; Dubai International Financial Centre: DIFC Employee Workplace Savings (DEWS) scheme, from 1 February 2020; General Pension and Social Security Authority (GPSSA) and Abu Dhabi Pension Fund (ADPF); Income Tax Department of India: India–UAE Double Taxation Avoidance Agreement, in force 22 September 1993; Benefits Beyond Borders 2025, Plum (UAE chapter).