Mandatory public and national holidays where employees receive full regular wages without being required to report to work.
- Category
- Attendance & Leave
- Legal status
- Governed by Indian law
- Relevant to
- HR, managers & employees
- Reading time
- 3 min
What is Paid Holidays?
Paid Holidays are calendar days designated by statute or corporate policy where business operations pause while employees receive full salary. In India, three national holidays are mandatory for all establishments: Republic Day (Jan 26), Independence Day (Aug 15), and Gandhi Jayanti (Oct 2), alongside festival holidays chosen per state lists.
Key takeaways
- 1Paid Holidays are calendar days designated by statute or corporate policy where business operations pause while employees receive full salary.
- 2In India, three national holidays are mandatory for all establishments: Republic Day (Jan 26), Independence Day (Aug 15), and Gandhi Jayanti (Oct 2), alongside festival holidays chosen per state lists.
Why Paid Holidays matters
Guarantees employees statutory cultural and national observances with zero wage loss.
How Paid Holidays works in practice
- 1
Set the policy
Define how Paid Holidays works: eligibility, accrual or limits, approval flow and carry-forward rules.
- 2
Capture data
Record Paid Holidays through biometric, mobile or web check-ins and leave requests rather than paper registers.
- 3
Approve & regularise
Managers review exceptions, missed punches and requests related to Paid Holidays within a fixed window.
- 4
Feed payroll
Lock the cycle so Paid Holidays flows into salary, loss-of-pay and encashment calculations.
Real-world example
An enterprise publishes its annual holiday calendar of 12 paid holidays, including the 3 mandatory national days plus regional festivals like Diwali and Pongal.
Indian statutory reference
National and Festival Holidays Act (mandates minimum 3 national holidays and 5-10 state festival holidays).
Rates, limits and state rules change often. Confirm against the latest notification or with your compliance advisor.
Best practices and common mistakes
Best practices
- Publish a clear policy for Paid Holidays and keep it in the employee handbook.
- Use one source of truth for attendance, leave and shift data.
- Set approval timelines so requests do not pile up before payroll.
- Audit overtime and loss-of-pay entries each cycle.
- Align policies with the applicable Shops & Establishments rules.
Common mistakes
- Applying Paid Holidays differently across teams, which causes disputes.
- Letting attendance corrections happen after payroll is processed.
- Not tracking leave balances in real time.
- Ignoring state-wise holiday and weekly-off rules.
Managing Paid Holidays in SleetHR
SleetHR manages Paid Holidays with configurable policies, self-service requests and approvals, and sends the final numbers to payroll automatically.