Leave Policy Laws and Holidays in India: A 2026 Employer's Guide

How many paid leaves is an employee in India actually entitled to in 2026, and which law decides it?

The short answer: the four Labor Codes now set the floor, your employee's state adds its own layer, and the specific leave types (earned, casual, sick, maternity) each follow their own rule.

Getting this wrong is not a paperwork problem, it triggers penalties, back-pay claims, and disputes. This guide breaks down every leave type, the 2026 holiday framework, and how to build a policy that holds up in every Indian state.

Which laws govern leave policy in India in 2026?

Leave policy in India is now anchored by the four Labor Codes, which came into force on 21 November 2025 and consolidated 29 older central labor laws into a single framework.

The Code on Wages, 2019, the Code on Social Security, 2020, the Industrial Relations Code, 2020, and the Occupational Safety, Health and Working Conditions (OSH) Code, 2020 now set the baseline for wages, leave, working hours, and benefits.

One important nuance: notification is not the same as full rollout. During the transition, the older rules and schemes continue to apply until the new rules are notified, and each state's Shops & Establishments Act is a state law that is not repealed by the central codes, so it keeps governing most offices and commercial establishments. You can track the official rollout through the Government of India's labor codes portal.

The table below maps the older Acts to the codes that now absorb or sit above them, so you know which framework to cite. If your business is scaling in India, our overview of the new Labor Code in India explains the practical payroll impact in more depth.

Knowing the governing law is only step one. The next question is what those codes actually require you to offer, which brings us to the leave types themselves.

What types of leave are employees entitled to in India?

Indian employees are entitled to three core statutory leave categories, earned leave, casual leave, and sick leave, plus paid public holidays and statutory maternity leave, with several optional leaves that competitive employers add on top.

The statutory minimums come from the OSH Code and each state's rules, while the extras are set by company policy. Understanding paid time off as a whole helps you see where the legal floor ends and your benefit strategy begins.

Here is how the common leave types break down before we get into the detail of each.

Earned leave carries the most weight for payroll and exits, because it accrues and can be encashed, so it is the right place to start.

How is earned leave (privilege leave) calculated in India?

Earned leave, also called privilege leave, accrues at roughly one day for every 20 days worked, and under the OSH Code employees qualify after 180 days of service in a year (reduced from the 240 days that applied under the old Factories Act).

Most Indian companies grant between 12 and 21 days of earned leave annually, and it accrues month by month rather than arriving as a lump sum. Because it is a vested benefit, unused earned leave is either carried forward or paid out.

Two rules matter most for employers:

• Carry forward is capped at 30 days under the current framework, so balances above that either lapse or must be encashed.
• Leave encashment converts unused earned leave into cash, usually at (basic + dearness allowance) / 30 per day, and is commonly paid at resignation or retirement.

If you hire mid-year or run a part-year payroll, our guide on how to calculate prorated PTO in India shows the exact accrual math. Earned leave is the planned, vested category; casual and sick leave cover the unplanned days, which work quite differently.

How do casual leave and sick leave work in India?

Casual leave and sick leave both cover short, unplanned absences, but they serve different purposes and follow different rules.

Casual leave (usually 7 to 12 days a year) is for personal errands, emergencies, or a day or two off at short notice, and cannot normally be taken for more than three consecutive days. Sick leave (also commonly 7 to 12 days) is for illness or injury, and employers can ask for a medical certificate for longer absences.

Neither casual nor sick leave typically carries forward, and unused days usually lapse at year end rather than being encashed.

When an employee runs out of paid leave and still needs time off, the shortfall is handled as unpaid leave, which flows into payroll as a deduction (see our explainer on loss of pay (LOP) in salary). Once the everyday leave types are set, the statutory heavyweight is maternity leave, where the law is strict and the penalties are real.

What are the maternity leave rules in India?

Maternity leave in India is 26 weeks of fully paid leave for the first two children and 12 weeks from the third child onward, and it now sits under the Code on Social Security, 2020. It applies to every establishment with 10 or more employees, and the employer, not the government, pays the salary during leave.

Adopting and commissioning (surrogacy) mothers are entitled to 12 weeks, and up to 6 weeks is available in the case of miscarriage or medical termination. In a March 2026 ruling, the Supreme Court struck down the earlier condition that limited an adoptive mother's leave to adoptions of a child under three months old, so adoptive mothers now qualify regardless of the child's age.

Employers have hard obligations here: you cannot terminate a woman during maternity leave, you must hold her role and benefits for her return, and pay is calculated on her average daily wage. For the full eligibility and pay mechanics, see our detailed guide to maternity leave in India. Maternity leave is settled law; paternity leave is where India still has a visible gap.

Is paternity leave mandatory in India?

No, there is no national law mandating paternity leave for private-sector employees in India as of 2026. Central government employees do get 15 days of paternity leave under the CCS (Leave) Rules, but private employers offer it voluntarily, typically 1 to 4 weeks, as a retention and equity benefit.

The direction of travel, however, is clear. In its March 2026 maternity-benefits judgment, the Supreme Court went out of its way to urge the government to formalize paternity leave as a social-security benefit, observing that its absence reinforces outdated gender stereotypes.

Because there is still no statutory floor for private employers, the design choice is yours. Our guide to paternity leave in India covers how leading employers structure eligibility and duration. Beyond the big statutory leaves, Indian workplaces also run a set of special leaves worth standardizing.

What special leaves do Indian companies commonly offer?

Beyond the statutory categories, Indian employers commonly offer bereavement leave, marriage leave, compensatory off, leave without pay, and increasingly menstrual leave.

None of these are mandated nationally, but they have become standard in competitive workplaces and are worth defining clearly to avoid ad-hoc decisions. Setting them down in writing keeps managers consistent and employees informed.

The most common special leaves are:

• Marriage leave: usually 1 to 5 days for an employee's own wedding.
• Bereavement leave: a few days off after the death of an immediate family member.
• Compensatory off: a day off in lieu of working a holiday or weekly off, distinct from paid overtime.
• Leave without pay (LWP): unpaid time off once other balances are exhausted, subject to approval.
• Menstrual leave: not required by national law. The Supreme Court declined to mandate it nationally in March 2026, but the picture is shifting at the state level. Bihar has offered it since 1992, and in 2026 Karnataka's menstrual-leave policy (one paid day a month) was upheld by its High Court, making it the first state to require it of private employers. Many companies now offer one to two days a month voluntarily.

If your team is remote or hybrid, these leaves interact with your attendance rules, which our work from home policy in India guide addresses directly.

For advances against salary during unpaid stretches, see our salary advance policy for employees in India. Special leaves are optional; public holidays are not, and they follow their own national and state structure.

What are India's public holidays in 2026?

India has three national holidays that every employer must observe, plus a longer list of gazetted and restricted holidays that vary by state and religion. The three fixed national holidays are Republic Day (26 January), Independence Day (15 August), and Gandhi Jayanti (2 October). Beyond these, the central government publishes a gazetted and restricted holiday list each year, and each state adds its own festivals.

Because most festival dates move each year and states differ widely, always confirm the current list against your state's official calendar. Our companion guide to holidays in India tracks the national and state breakdown.

You can auto-generate a compliant calendar with our holiday and leave policy tool. Holidays and weekly offs also interact with working-hour and overtime limits, which set the boundary around how leave is applied.

How do working hours, weekly offs, and overtime interact with leave?

Working hours in India are capped at 48 hours a week and up to 8 hours a day under the OSH Code, with at least one full rest day every seven days, and any work beyond those limits counts as overtime paid at twice the ordinary wage.

The exact daily spread-over and any compressed-week arrangement depend on the final central rules published by the Ministry of Labor & Employment, but the 48-hour week and the double-rate overtime are settled. These limits define the normal working week that your leave and holiday policy sits on top of.

Overtime and holiday work are a frequent source of payroll disputes, so document your rate and approval process clearly. Our guide to overtime laws in India breaks down the exact calculations and the state variations. Speaking of state variations, that is exactly where most global employers get tripped up.

How does leave policy differ across Indian states?

Leave entitlements differ across Indian states because each state runs its own Shops & Establishments Act, which sets its own minimums for earned, casual, and sick leave on top of the central code.

Two employees doing the same job in Karnataka and Maharashtra can have different statutory leave balances, so a single national policy applied blindly will under- or over-comply somewhere. The Shops and Establishments Act is the layer you have to check state by state.

The table shows the typical statutory leave structure in a few major states. Treat these as indicative starting points and confirm the current figures against each state's Act, which is exactly what our state guides do.

For the exact rules where your employees actually sit, we maintain state-by-state guides:

• Leave policy in Karnataka
• Leave policy in Maharashtra
• Leave policy in Tamil Nadu
• Leave policy in Telangana
• Leave policy in Andhra Pradesh
• Leave policy in Kerala
• Leave policy in Gujarat
• Leave policy in West Bengal
• Leave policy in Uttar Pradesh

With the state layer understood, the final step is turning all of this into a single policy that holds up in practice.

How should you build a compliant leave policy in India?

A compliant India leave policy starts from the central Labor Code baseline, layers the correct state Shops & Establishments rules for each work location, and then adds voluntary leaves as a benefit, all written down clearly. The goal is a policy that meets the legal floor everywhere you employ people and is applied consistently, because inconsistency is what turns into disputes and claims.

Follow these steps to get it right:

1. Anchor to the code baseline and the relevant state rules, and cite them in the document, referencing the broader labor and employment law in India framework.
2. Define every leave type, its accrual, notice, approval, and carry-forward or encashment rule, in line with your wider HR policies in India.
3. Track statutory contributions and deadlines so leave interacts correctly with payroll, as part of overall statutory compliance in HR in India.
4. Set clear rules for exits, so unused leave flows correctly into the full and final settlement in India.
5. Communicate the policy at onboarding and align it with your employee benefits in India so it actually attracts and retains talent.

Done well, a clear leave policy is not just compliance, it is part of a healthy work culture in India that keeps attrition down. If building and running all of this in-house feels heavy, that is exactly where an India-native partner earns its keep.

How does Wisemonk help you manage leave and stay compliant in India?

Wisemonk is an India-native Employer of Record (EOR), built in India for global companies, so leave, holidays, and statutory compliance are handled the way Indian law actually works, not bolted on from abroad.

We take the entire leave-and-compliance burden off your plate:

• Hire and onboard talent compliantly through our Employer of Record in India, with locally correct leave and benefits from day one.
• Run accurate monthly payroll in India, where earned leave, LOP, encashment, and holidays flow into pay automatically.
• Give employees and managers self-serve leave, attendance, and approvals through our employee and manager app.
• Run your existing India team compliantly through our PEO services in India.
• Scale from your first hire to a full team with hiring in India handled end to end.

We are a leading EOR in India, now expanding our services to the US and UK.

What do Wisemonk's clients say?

Short snapshots from teams we work with, verified on our reviews page:

Minehub (Canada): needed payroll, statutory compliance, and benefits handled for a remote India team.

We've been using WiseMonk to support our India team for the past six months, and the experience has been excellent. They've handled everything from payroll and statutory compliance to equipment procurement and benefits enrollment, all with a level of responsiveness and professionalism that makes managing a remote India team from Canada feel seamless. - Monika Russell, CFO, Minehub (Canada)

A global team that wanted HR freed up from compliance admin.

Wisemonk is an exceptional product that helps us manage our remote workforce. It has enabled our HR teams to focus more on employee welfare rather than worrying about contracts, payments and compliances. - Neeraj S., Chief Executive Officer (via G2)

Onform (USA): needed founding engineers hired in India quickly.

Wisemonk helped us tap into the vibrant and top-notch Indian talent market and hire our first couple of founding engineers in record time. They are easy to work with and very transparent about the process. - Krishna Ramachandran, Co-founder, Onform (USA)