Maternity Benefit: Rules, Eligibility and Pay Calculation for Indian Employers

Maternity benefit is the paid leave and related protection an employer must give a woman employee around childbirth, adoption or surrogacy. For most employers it comes up a few times a year, which is exactly why it goes wrong: nobody remembers the eligibility test, the leave is keyed as loss of pay, or the pay is worked out on the wrong wages.

The consequences are not small. Underpaying maternity benefit, or ending employment during the leave, can lead to penalties, and it damages trust with the whole team.

This guide covers the rules as generally applied, a worked calculation, and how Apragya keeps the leave, the pay and the documents together on the employee record.

Maternity benefit act rules and eligibility

The Maternity Benefit Act, 1961 set these rules, and they have been carried into the Code on Social Security, which took effect in November 2025. Rules under the code are still being notified, so check the current position for your state. A woman qualifies if she has worked for the employer for at least 80 days in the twelve months before her expected delivery.

The benefit is 26 weeks of paid leave for a woman with fewer than two surviving children, of which up to 8 weeks can be taken before the expected delivery. For a third or later child it is 12 weeks. A woman adopting a child below three months, and a commissioning mother, are entitled to 12 weeks. Miscarriage carries its own shorter leave.

Pay is the average daily wage multiplied by the days of absence. The average daily wage is the average of her wages for the days she actually worked in the three calendar months before the leave. A medical bonus is payable if the employer gives no free pre-natal and post-natal care. Establishments above a set size must offer a creche, and she cannot be dismissed during the leave.

Worked example: 72,000 rupees earned over 78 days worked gives about 923 rupees a day. Twenty-six weeks is 182 days, so the benefit is about 1,68,000 rupees.

1. Check 80 days of work in the past twelve months.
2. Find the entitlement: 26 or 12 weeks.
3. Work out the average daily wage from the last three months.
4. Multiply by the days of leave.
5. Record the leave as paid and run it through payroll.

An example: a Pune software services firm

Take an illustrative 90-person firm. A senior tester with one child applies for maternity leave from 1 June. In the three months before, she earned 72,000 rupees for the 78 days she actually worked.

Her average daily wage came to about 923 rupees, so 26 weeks of benefit worked out to roughly 1,68,000 rupees, paid through payroll on her usual dates. Because the leave type was marked as paid, no loss of pay was deducted, and her leave history showed the full period.

What getting maternity benefit wrong costs

How a maternity leave policy in India runs in Apragya

Choosing how to track maternity leave pay calculation

The risk is not the formula. It is the handoff between HR, who approve the leave, and payroll, who may never hear about it until the attendance sheet shows absence. When leave and salary read the same record, that handoff disappears.

What sets Apragya apart for maternity benefit

Maternity benefit runs on leave management, employee documents and attendance. For the step-by-step setup, read how to automate maternity benefit.

Getting started

1. Write down your maternity, adoption and miscarriage leave policy.
2. Set the maternity leave type's days to match it.
3. Decide who approves, and who in payroll is told.
4. List which employees are covered by ESI, since their cash benefit is different.
5. Check the next expected leave against the rules in this guide.

The first case handled this way usually becomes the template for every one after it.