Leave in India: Earned Leave, Sick, Casual, Maternity and Holidays

Every employee in India has paid earned leave and paid public holidays. In most states they also have a set number of casual and sick days, and women have 26 weeks of paid maternity leave. The exact numbers depend on the state the person works in. Where two laws give different amounts, the person gets the more generous one.

Earned leave builds up as the person works

Earned leave, also called privilege leave or annual leave, is paid leave the person earns by working. Under the Occupational Safety, Health and Working Conditions Code, in force since 21 November 2025, it is one day for every twenty days worked, once the person has worked 180 days in the calendar year. For a full-time employee that comes to about twelve to fifteen days a year.

Someone who joins partway through the year qualifies once they have worked a quarter of the days left in it. Unused leave carries forward up to 30 days. The person can ask for unused days to be paid out at the end of the year, and days above the 30-day limit are paid out.

The Code covers most staff, including clerical, technical and supervisory roles. People employed mainly as managers are covered by their state’s Shops and Establishments Act instead, which sets similar figures, shown in the table below.

Writing an earned leave policy

The law sets the minimum, and the policy can match it or give more. A clear earned leave policy answers five questions: how many days the person earns and how often they are credited, when a new joiner can start taking them, how many days carry into the next year, when unused days are paid out, and how much notice the person gives before taking leave.

Crediting leave every month, rather than once a year, keeps each person’s balance and the employer’s liability visible as they build. Settle the policy before the first hire, because it goes into every appointment letter and changing it later means changing every one.

Unused earned leave is a real cost. It is paid out when the person leaves, so it belongs in your provisions alongside gratuity.

Casual and sick leave, state by state

Casual leave covers short, unplanned needs: an errand, a family matter, a day off at short notice. Sick leave covers illness. Both come from state law rather than the central codes, so the number of days depends on where the person works. The six states most foreign employers hire in are below.

Maternity leave

A woman with fewer than two surviving children is entitled to 26 weeks of paid maternity leave, up to eight of them before the birth. From the third child it is 12 weeks. Adoptive mothers and commissioning mothers get 12 weeks, and since a Supreme Court judgment of March 2026 that applies whatever the adopted child’s age. She qualifies once she has worked 80 days in the twelve months before the expected birth.

There is also six weeks for a miscarriage or medical termination, two weeks after a tubectomy, and up to one month more for illness arising from the pregnancy. The employer pays her full average wage throughout, with no government subsidy, unless she is covered by ESI, in which case ESI pays. Afterwards she may work from home where the role allows it and both sides agree, and she has two nursing breaks a day until the child is fifteen months old.

Paternity leave

Paternity leave for private employers is set by company policy rather than by law. Central government staff get 15 days, which is a common benchmark, and candidates often ask about it at the offer stage, so it is worth deciding before you start hiring.

Public holidays and compensatory days off

Three national holidays are paid everywhere: Republic Day on 26 January, Independence Day on 15 August and Gandhi Jayanti on 2 October. Each state adds its own festival holidays, for eight to ten paid holidays a year in most states. Polling day in a Lok Sabha or state assembly election is also a paid holiday.

A person who works on their weekly day off or on a holiday gets a day off in return, usually within the following month or two. Some states, including Karnataka, Maharashtra and Tamil Nadu, pay double wages for holiday work instead of, or as well as, the day off.

Menstrual leave in Karnataka

Karnataka gives women aged 18 to 52 one paid day of menstrual leave a month, twelve a year, in establishments registered in the state, including IT companies. No medical certificate is needed, and each month’s day is used that month. The Karnataka High Court upheld the order in April 2026 and directed that it be enforced.

Leave set by company policy

Bereavement, marriage, study and sabbatical leave are set by the employer. Decide which you offer and write the terms into the leave policy, so every person in India has the same answer.

Employees earning ₹21,000 a month or less are covered by ESI, which pays sickness benefit at 70 per cent of wages for up to 91 days a year, alongside whatever sick leave the employer gives.

Leave when someone leaves

Unused earned leave is paid out when employment ends, whether the person resigns or the employer ends it. Under the labour codes the final settlement, including that leave, is due within two working days of the last day.

The payment is taxed as salary. When it is paid on leaving, part of it is exempt from income tax, up to a lifetime limit of ₹25,00,000 for private-sector employees.