# The India Employee Benefits Stack for UK companies

> UK parents are used to the NHS as the base layer, a pension employees can opt out of, and benefits in kind taxed through P11D. In India the employer carries health cover, EPF is statutory, gratuity is owed on exit after five years, and the employer's group health premium is not a taxable perquisite.

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

## In short

- The India–UK Double Contributions Convention has been in force since 15 July 2026. Staff seconded from the UK with a certificate of coverage from HMRC can stay in UK National Insurance and be exempt from Indian EPF for up to 60 months.
- India has no NHS. 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 does the work of both the NHS and private medical insurance.
- The workplace pension maps to EPF (12% of basic from employer and employee, against auto-enrolment's 3% employer minimum), statutory maternity pay to 26 weeks of employer-paid leave, and redundancy pay to gratuity after five years.

## Questions

### Do UK secondees still pay into EPF now the agreement is in force?

Not if their posting started on or after 15 July 2026, is not expected to exceed 60 months and they hold a certificate of coverage (form CA9107) from HMRC. They stay on UK National Insurance instead. Staff already mid-assignment on that date moved to Indian social security, and anyone without a certificate joins EPF from day one on full salary.

### Do we need health insurance in India if the NHS covers staff at home?

Yes, in practice. The NHS does not cover employees in India, and India has no statutory health cover above ₹21,000 a month. Group Health Insurance 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.

### How does EPF compare with auto-enrolment?

EPF is heavier and statutory. Establishments with 20+ employees contribute 12% of basic plus DA, with 8.33% to the pension scheme (EPS) and the rest to EPF, and employees add 12%. Auto-enrolment's minimum is 8% of qualifying earnings with 3% from the employer. Most MNC subsidiaries contribute on full basic rather than the ₹15,000 ceiling.

### Is employer health cover taxed in India like a P11D benefit?

No. The employer's Group Health Insurance premium is not a perquisite under Section 17(2), so employees are not taxed on it, and the employer deducts it under Section 36(1)(ib). In the UK, employer-paid medical insurance carries Class 1A National Insurance at 15%. The Indian cost to budget is 18% GST on group health premiums.

### What replaces statutory redundancy pay?

Gratuity. It is payable 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 under the 2025 Labour Codes. UK statutory redundancy pay needs two years' service and is capped at £22,530 from April 2026.

## What changes when you come from the United Kingdom

### Assignees from the United Kingdom 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.
**United Kingdom and India.** The India–UK Double Contributions Convention came into force on 15 July 2026. Staff sent to India on or after that date for no more than 60 months can stay in UK National Insurance and be exempt from Indian EPF, with a certificate of coverage (form CA9107) from HMRC. Staff already mid-assignment on 15 July 2026 moved to Indian social security. Get the certificate before the first Indian payroll run.

### Mapping UK benefits to India

**At home.** The NHS as the base layer, private medical insurance as a benefit in kind, an auto-enrolment workplace pension, and group life and income protection.
**In India.** Group Health Insurance (GHI) does the work of both the NHS and PMI. EPF replaces the workplace pension. Gratuity is a statutory exit payment: fund it through an insured gratuity scheme rather than carrying it as an unfunded liability.

### Overlap between London and India

**Time difference.** India is 4½ hours ahead of London during British Summer Time (late March to late October) and 5½ hours ahead in winter, so the London morning overlaps the Indian afternoon.
**What to set up.** Agree who in India signs off endorsements, claims escalations and renewals, so nothing waits for headquarters' business hours.

### India–United Kingdom tax treaty

**Treaty.** India and the UK have a double taxation avoidance agreement, signed in 1993 and in force since 26 October 1993. Short visits are usually exempt from Indian tax under its 183-day and employer conditions. Services furnished through employees can create a permanent establishment after 90 days in any 12 months, or 30 days for an associated enterprise; check the articles before relying on them.
**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 Kingdom, and what it is called in India

A UK employer builds on top of the NHS: care is free at the point of use, so private medical insurance is a benefit that buys speed. India has no NHS. Above ₹21,000 a month an employer's statutory health obligation is zero, and Group Health Insurance is the cover employees actually rely on, for themselves and often their parents. The statutory layer is heavier than auto-enrolment: EPF at 12% of basic from the employer and 12% from the employee, statutory gratuity after five years and 26 weeks of employer-paid maternity leave.

| At home in the United Kingdom | In India | What changes for the employer |
| --- | --- | --- |
| Workplace pension (Auto-enrolment pension): At least 8% of qualifying earnings between £6,240 and £50,270, with 3% or more from the employer. Employees can opt out. | EPF and EPS (Employees' Provident Fund and Pension Scheme) | Statutory for establishments with 20+ employees: 12% of basic plus DA from the employer (8.33% to EPS, the balance to EPF) and 12% from the employee. Most MNC subsidiaries contribute on full basic rather than the ₹15,000 wage ceiling. |
| Employer National Insurance (Class 1 secondary NICs): 15% on earnings above £5,000 a year (2026/27), paid by the employer on top of salary. | EPF and EPS; ESI for employees earning up to ₹21,000 a month | Seconded staff with a certificate of coverage stay on UK NICs for up to 60 months under the Double Contributions Convention. Everyone else on Indian payroll is in EPF, and foreign nationals join from day one on full salary. |
| Public health care (NHS): Universal, tax-funded health care, free at the point of use for residents. | ESI below ₹21,000 a month; nothing statutory above it | There is no public base layer for salaried staff above the ESI ceiling. Group Health Insurance is what employees rely on for hospital care, and candidates hired at ₹8 LPA and above expect it. |
| Private medical insurance (PMI): Employer-paid cover for faster private treatment, reported on P11D with Class 1A National Insurance at 15%. | Group Health Insurance (GHI) | Not a perk in India but the main cover. Most insurers need a group of at least 7. The India median sum insured is ₹5,00,000; global startups in India carry ₹10,00,000. |
| Sick pay (Statutory Sick Pay (SSP)): £123.25 a week or 80% of average weekly earnings, whichever is lower, from the first day of sickness (2026/27). | Sick leave under the state Shops and Establishments Act | Sick days are a separate paid leave bucket set state by state, alongside earned and casual leave, rather than a flat weekly payment. |
| Maternity pay (Statutory Maternity Pay (SMP)): 52 weeks' leave; SMP for 39 weeks at 90% of earnings for six weeks, then £194.32 a week or 90% if lower. | Maternity Benefit Act: 26 weeks of full pay | Full pay throughout, funded by the employer: 26 weeks for the first two children, 12 weeks from the third (ESI covers it for ESI members). Crèche required at 50+ employees. |
| Paternity leave (Statutory Paternity Leave and Pay): Two weeks' leave, a day-one right, with pay at £194.32 a week or 90% of earnings if lower. | None under central law | No statutory paternity leave under central law. If the group offers paternity leave, write it into the India leave policy and apply it consistently across states. |
| Annual leave (Statutory holiday entitlement): 5.6 weeks a year, or 28 days for a five-day week, which can include bank holidays. | Earned leave under the state Shops and Establishments Act | Earned leave is typically 12 to 18 days a year plus casual and sick leave. Public holidays vary by state, with three national holidays. Build the policy from these statutory buckets rather than one allowance. |
| Redundancy pay (Statutory redundancy pay): After two years' service, up to 1.5 weeks' pay per year by age; weekly pay capped at £751 and total at £22,530 from April 2026. | Gratuity under the Payment of Gratuity Act | Owed on any exit after five continuous years, not only redundancy: 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 under the 2025 Labour Codes. |
| Income protection (Group income protection): Employer-paid insurance that replaces part of salary during long-term illness or disability. | No standard equivalent; Group Personal Accident (GPA) covers accidental disability | Indian group programmes are built around GHI, GPA and Group Term Life. GPA pays for accidental death and disability, and the Employees' Compensation Act covers work injuries for staff not in ESI. |
| Death in service (Group life assurance): Lump sum paid if an employee dies in employment, usually a multiple of salary. | Group Term Life (GTL); 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. |
| Benefits in kind (P11D): Employer-paid medical insurance and similar benefits are reported to HMRC and taxed on the employee. | Perquisites under Section 17(2) | The employer GHI premium is not a perquisite under Section 17(2), so it is not taxed on the employee, and it is deductible under Section 36(1)(ib). The cost to plan for is 18% GST on group health premiums. |

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

1. **The NHS covers them, so health insurance is a nice-to-have.** India has no NHS. Above ₹21,000 a month the employer's statutory health obligation is zero, and Group Health Insurance is the cover employees actually use. Candidates hired at ₹8 LPA and above expect it; the India median sum insured is ₹5,00,000.
2. **The new agreement covers everyone we send to India.** The Double Contributions Convention covers postings that start on or after 15 July 2026 and will not exceed 60 months, with a certificate of coverage from HMRC. Staff already mid-assignment on that date moved to Indian social security, and local hires are always in EPF.
3. **Pensions work like auto-enrolment: 3% from us, opt-outs allowed.** EPF is statutory for establishments with 20+ employees: 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.
4. **Exit pay is only owed on redundancy, after two years.** Gratuity is owed on any exit after five continuous years, including resignation: 15 days' last drawn salary per year of service, capped at ₹20 lakh, or after one year for fixed-term staff. It is statutory for establishments with 10+ employees, so provision it from the first payroll.
5. **Maternity pay is largely recovered from the state, as with SMP.** UK employers reclaim 92% of SMP from HMRC. In India the employer pays 26 weeks of full salary under the Maternity Benefit Act for the first two children, with nothing to reclaim (ESI covers it for ESI members). GHI pays the hospital bill: a normal delivery costs about ₹1 lakh, a C-section about ₹1.25 lakh.
6. **Employer health cover will be taxed as a benefit in kind.** The employer GHI premium is not a perquisite under Section 17(2), so there is no P11D-style charge on the employee, and the employer deducts it under Section 36(1)(ib). The cost to budget is 18% GST on group health premiums.
7. **PMI covers the employee; families arrange their own cover.** In India families expect to be on the group policy, and many employees ask for their parents too. Parents are the largest claims category by relationship, about 40% of claims in Plum's data, so decide parental cover deliberately rather than by default.
8. **Our UK holiday policy of 28 days can apply as is.** Leave minimums come 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. A single global allowance must still meet each state's floor.

## The United Kingdom vs India, benefit by benefit

| Benefit | United Kingdom | India |
| --- | --- | --- |
| Statutory health cover | Universal NHS, tax-funded and free at the point of use for residents. | ESI for employees earning up to ₹21,000 a month. Nothing statutory above that line. |
| Employer health cover | PMI optional; a benefit in kind with Class 1A National Insurance at 15%. | GHI optional in law, expected in practice; not a perquisite, with 18% GST on the premium. |
| Pension | Auto-enrolment: 8% of qualifying earnings, at least 3% from the employer; employees can opt out. | EPF and EPS: 12% of basic plus DA from employer and employee, at 20+ employees. |
| Employer social security | Class 1 employer NICs at 15% above £5,000 a year (2026/27). | EPF for covered staff; International Workers contribute on full salary with no ₹15,000 ceiling. |
| Seconded staff | Postings to India from 15 July 2026 stay on UK NICs for up to 60 months with form CA9107. | Exempt from EPF for that period with the certificate; local hires always in EPF. |
| Sick pay | SSP: £123.25 a week or 80% of earnings if lower, from the first day (2026/27). | Paid sick leave set by state law, alongside earned and casual leave. |
| Maternity | 52 weeks' leave; SMP for 39 weeks, 90% for six weeks then £194.32 or 90% if lower. | 26 weeks of full pay, employer-funded, for the first two children; 12 weeks from the third. |
| Paternity | Two weeks' leave, a day-one right, paid at £194.32 or 90% of earnings if lower. | No statutory paternity leave under central law. |
| Annual leave | 5.6 weeks, or 28 days for a five-day week, which can include bank holidays. | Earned leave typically 12 to 18 days plus casual and sick leave; holidays vary by state. |
| Exit payment | Statutory redundancy pay after two years; weekly pay capped at £751 from April 2026. | Gratuity on any exit after five years: 15 days' last drawn salary per year, capped at ₹20 lakh. |
| Life cover | Death in service, usually a multiple of salary. | EDLI up to ₹7 lakh through EPFO; GTL at 3 to 5 times CTC is common. |
| Income protection | Group income protection for long-term illness is part of a common benefits stack. | No standard equivalent; GPA covers accidental death and disability. |

## What headquarters is used to

The NHS gives every UK resident a free base layer, so UK employers buy private cover for speed rather than access. That expectation does not travel: in India the employer's policy is the base layer.

- **100%** of UK residents are covered by the tax-funded National Health Service
- **£317bn** spent on healthcare in the UK in 2024
- **£258bn** of that spending was financed by government
- **Almost 1m** private hospital admissions in 2024, a record, as NHS waiting lists pushed demand to private care

Source: Benefits Beyond Borders 2025, Plum's report on benefits in the economies investing in India (United Kingdom chapter; figures checked against the Office for National Statistics and the Private Healthcare Information Network). https://www.plumhq.com/benefits-beyond-borders

## Staff seconded from the United Kingdom

UK secondees on postings that start on or after 15 July 2026 can stay in UK National Insurance for up to 60 months with a certificate of coverage (form CA9107) from HMRC, which exempts them from Indian EPF. Without it, they are International Workers and join EPF from day one on full salary. Most keep an international medical plan; adding them to the India GHI policy gives cashless admission at network hospitals without paying upfront.

## Where UK companies set up in India

- **Bengaluru, Karnataka.** Technology and shared-services centres for Tesco, Shell, AstraZeneca and Rolls-Royce. Highest GHI adoption of any city in Plum's benchmark, so candidates expect a global-standard plan.
- **Pune, Maharashtra.** Operations and technology centres for Barclays, Vodafone and HSBC. Below-average claim size but above-average maternity adoption in Plum's city benchmark.
- **Hyderabad, Telangana.** HSBC and Lloyds Banking Group technology centres. Highest average maternity claim of any city in Plum's benchmark; set the maternity sub-limit with that in mind.
- **Chennai, Tamil Nadu.** Global business services for Standard Chartered and Barclays. Tamil Nadu has its own Shops and Establishments leave rules for office staff.
- **Mumbai, Maharashtra.** India head offices for HSBC, Standard Chartered, Hindustan Unilever and GSK. Highest average claim size of any city in Plum's benchmark; calibrate sum insured to Mumbai hospital costs.
- **Delhi NCR, Haryana and Uttar Pradesh.** BT in Gurugram, Barclays in Noida and JCB's plant at Ballabgarh. Two states' leave laws apply across one metro, so check which Act covers each site.

UK companies with operations in India include HSBC, Barclays, Standard Chartered, Unilever (Hindustan Unilever), Vodafone, BT, Tesco, Lloyds Banking Group, AstraZeneca, GSK, Diageo (United Spirits), Rolls-Royce, JCB, Shell.

## 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 UK

| | India | The UK |
|---|---|---|
| Benefits budget, share of payroll | ~2–3.5% (2% typical), plus 13% PF and 4.81% gratuity | ~10–15%, of which private medical insurance is ~1–2%, plus a 3% minimum employer pension |
| What the employee still pays | Nothing: no deductible, no copay or coinsurance, no room-rent limit, no waiting period | Outpatient $27–$68 a visit; dental capped at $1,350 and vision at $270 |
| Who is on the policy | Employee, spouse, up to 4 children, 2 parents or in-laws, LGBTQ+ and live-in partners | Employee and dependants on private medical insurance |

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: HMRC, Rates and thresholds for employers 2026 to 2027; GOV.UK, UK and India new social security agreement (Double Contributions Convention, in force 15 July 2026); DWP, Review of the automatic enrolment earnings trigger and qualifying earnings band for 2026/27; The Pensions Regulator, minimum contributions; GOV.UK guidance on holiday entitlement, maternity pay and leave, paternity leave, recovering statutory payments and redundancy pay; GOV.UK, Expenses and benefits: medical treatment; India–UK Convention for the avoidance of double taxation, 1993, as amended by the 2012 Protocol; Office for National Statistics, UK Health Accounts 2023 and 2024; Private Healthcare Information Network, private hospital admissions in 2024; Code on Social Security 2020 and Code on Wages 2019, in force 21 November 2025; Plum, Benefits Beyond Borders 2025 (United Kingdom chapter).