Table of Contents


Table of Contents


Indian Rupees (INR)

Payroll Frequency


Employer Taxes


About India

Iceland is a Nordic country located in the north Atlantic, an island nation that is sparsely populated, with the majority of its inhabitants living in or around its capital, Reykjavik. It is famous for its hot springs (like the Blue Lagoon), geysers and active volcanoes. Lava fields cover a lot of the land and hot water is pumped from under the ground to supply much of the country’s heating.

Icelandic culture is founded upon its Scandinavian heritage, with most of its inhabitants descended from Norse and Gaelic settlers. The language is North Germanic and descended from Old West Norse and Faroese. Iceland is a wealthy country with a market economy that provides for its citizens via a Nordic-style welfare system.

Icelandic cuisine includes traditional dishes skyr (a thick yogurt), hákarl (cured shark), cured ram, singed sheep heads, and black pudding, Flatkaka (flat bread), dried fish and dark rye bread traditionally baked in the ground in geothermal areas, as well as Puffin, a local bird and delicacy that is often prepared through broiling.

Employment Relationship

• Permanent Employment

Permanent employees are those hired for any skilled, semi-skilled or unskilled, manual, operational, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied, with no fixed termination date. Employees in industrial establishments become permanent after their probation of 6 months. Permanent employees enjoy statutory benefits such as paid annual leave, sick leave, gratuity pay, provident fund, compulsory health insurance. 

• Fixed-Term or Specific-Purpose Contracts

In India, fixed-term employees are persons who are engaged based on a written contract of employment for a fixed period, provided that they receive similar working conditions and benefits as those by a permanent employee and receive statutory benefits proportionately according to the period of service rendered by them. Fixed-term contracts are allowed to be used in all industries. The maximum term under which this designation may run is seven years. The laws in India aim to prevent fixed-term contracts from replacing positions that are typically permanent or to avoid statutory provisions for permanent employees.

• Temporary Employment Contratcs

In India, a temporary worker as a worker who has been engaged for work that is of an essentially temporary nature likely to be finished within a limited period. Most temporary contracts are handled through temporary work agencies (TWAs). TWAs are loosely regulated by Indian law, but temporary contract employees are protected under The Contract Labour (Regulation and Abolition) Act of 1970. Specifically, the Act regulates: Non-seasonal establishments that employ twenty or more workmen as contract labor TWAs who employed or have employed twenty or more workmen on any day of the preceding twelve months Temporary agency workers are not required to receive the same statutory benefits as regular employees. However, the Contract Labour Act empowers courts to determine when an employer has misclassified an employee as a TWA worker, by examining, among other factors, the worker's length of service.

Probationary Period

India has provisions for 6 months' probationary period for hiring permanent employees. This period can be further extended by up to 3 months. If a permanent employee is employed as a probationer in a new post, he/she can be reverted to his/her old permanent post at any time during the probationary period of 6 months. An employment contract can be terminated without notice in probation. 

Working Hours

According to the Occupational Safety, Health and Working Conditions Act 2020 of India, no employee can be required or allowed to work in any establishment for more than eight hours a day and six days a week. Children under the age of 18 years cannot be employed for more than six hours a day, no more than three hours without break. The periods of hours of work for all categories of workers must be exhibited on the notice board of the industrial establishment. The Factories Act stipulates that no adult shall be allowed to work in a factory for more than 48 hours in any week and not more than nine hours in any day. If an employer is involved in a commercial activity, the regional shops and establishments statutes provide the applicable regulations. Generally, they include maximum nine hours per day and 48 hours per week.

Holidays / PTO

• Statutory Holidays

India strikes a balance between national holidays, which are observed in all states and union territories, and gazetted holidays, which the nation's tremendously diverse states may or may not grant their residents. National holidays are celebrated nationwide with businesses and government offices shutting down. National holidays: Republic Day – January 26 Independence Day – August 15 Gandhi Jayanti – October 2   Nationwide gazetted holidays: Republic Day Independence Day Gandhi Jayanti Mahavir Jayanti Buddha Purnima Christmas Day Dussehra Diwali (Deepavali) Good Friday Guru Nanak's Birthday Eid ul-Fitr Eid al-Adha (Bakri id) Muharram Prophet Mohammad's Birthday (Id-e-Milad)   In addition to the holidays listed above, there are also individual state and union territory holidays.

• Paid Annual Leave

Employees are entitled to paid annual leave at the rate of one leave per 20 days of work if they have worked for at least 180 days in a year. For employees under 18 years of age, annual leave is calculated as one leave per 15 days of work. Up to 30 days of annual leave may be carried over to the next year. If the employment contract expires before a worker could take annual leave, compensation for leave is made in proportion to the number of months and the number of hours worked in a week.

• Sick Leave

Sick leave is predominantly determined by company policy and state laws. Statutory sick leave provisions vary from industry to industry and range from 15 to 40 days. The best practice is to outline the terms and conditions of sick leave in contract documents. 

• Maternity Leave

India's Maternity Benefit Act grants every female employee, with less than 2 surviving children, of a company with at least ten employees 26 paid weeks of maternity leave that can begin up to eight weeks prior to the due date. Women may not be employed during the first six weeks following the day of delivery or miscarriage. To obtain maternity benefits, an employee must work for at least 160 days in the 12 months preceding the expected delivery date. A female worker must give notice to her employer in writing and state when she wishes to take time off from work. If no notice is provided, maternity benefits begin the date she is absent from work to give birth. The amount of the benefit is equal to 100% of the wages paid by the employer.

• Paternity Leave

While there is no statutory minimum paternity leave for private-sector workers, the law allows male government employees to take up to 15 days of leave if they have fewer than two surviving children. An employee can choose to take this leave once the baby is born, or anytime within six months of the delivery.

Termination of Employment

• Notice Period

Employees who have worked for at least one year must be given written notice to terminate their contracts. The duration of notice period depends on the number of employees in the establishment and reason for termination: Establishments with at least 50 employees – 1 month  Closure of establishment with at least 50 employees – 60 days Establishments with at least 300 employees – 3 months 

• Severance Benefits

Employees who have worked for at least 1 year are entitled to severance pay equal to 15 days' wages for each year of work or any part exceeding 6 months when they are dismissed by their employers with valid reason. No compensation is paid to employees who refuse to accept any alternative employment offered by their employers or are dismissed as a result of disciplinary action. Employees who are dismissed due to transfer or closure of establishment due to unavoidable reasons are also entitled to severance pay, provided that their severance pay does not exceed 3 months' wages. Employees who leave a job after having rendered 5 continuous years of service are entitled to gratuity payment at the rate of 15 days' pay for each completed year of continuous service or any part thereof exceeding 6 months. There is a ceiling of INR 2,000,000 (Indian rupees) when calculating severance payments.