Key payroll, employment tax and social security updates from India and across the globe
Global Partner. Integrated Solutions.
Updates from Across the Globe | August 2026
Key payroll, employment tax and social security updates from India and across the globe.
In the spotlight
India-UK Double Contributions Convention comes into force
India and the UK have agreed to a Double Contributions Convention (DCC) which came into force on 15 July 2026. The DCC is intended to ensure that qualifying employees temporarily working in the other country continue paying social security contributions in their home country, helping avoid duplicate contributions and fragmentation of their social security record.
For India, this means that qualifying employees sent by India-based employers to work temporarily in the UK may remain subject to India social security legislation for upto 60 months, provided the applicable conditions are met. They and their employers may therefore be exempt from UK National Insurance contributions, subject to obtaining a Certificate of Coverage from the Employees' Provident Fund Organisation (EPFO). They will continue the contributions into India's social security scheme (the India Employees' Provident Funds Scheme), similar to the amount they would have paid in UK NICs.
New Income Tax Act, 2025: Changes to salary allowances and perquisites
The enactment of the New Income Tax Act, 2025, marks a landmark moment in the evolution of India's direct tax framework. The new legislation seeks to modernize tax administration, simplify long-standing complexities, align provisions with contemporary economic realities, and enhance clarity for taxpayers and professionals alike.
The proposed increase in exemption limits of children's education and hostel allowances, gift vouchers, free meals, motor car perquisites and other non-monetary perquisites could support higher take-home pay, more tax-efficient salary structures and better alignment with the rising cost-of-living.
New Income Tax Act, 2025: Key TDS changes for employers
The TDS framework under the New Income Tax Act, 2025 is intended to be easier to follow through Sections 392 and 393, together with the applicable rates and thresholds. Various sections and forms have been consolidated to simplify the legal framework and facilitate easy interpretation of TDS provisions. Tables have been used for due dates, TDS rates, and other data for easy reference.
The structural changes in TDS provisions aim to reduce compliance burdens and provide financial relief to various taxpayer groups.
Australia
Payday Super takes effect from 1 July 2026
Effective 1 July 2026, a new reform has been introduced in Australia as 'Payday Super', which requires employers to pay superannuation contributions every time employees are paid. It is calculated as part of each pay run, and the contribution must be deposited with employees' super funds within 7 business days after paying employees. The Payday Super reform represents a significant change in employer compliance obligations, shifting superannuation payments from a quarterly model to a pay-cycle-based model. While this increases administrative responsibility, it will improve transparency, reduce unpaid super, and strengthen long-term retirement savings for employees.
UK
Changes to State Pension Age and Statutory Sick Pay from 1 April 2026
The State Pension age is gradually increasing from 66 to 67 as part of a phased implementation.
This increase is a part of the phased implementation, which will be rolled out over a two-year period. The first affected group will be those born between 6 April 1960 and 5 March 1961, and they will not be eligible for full state pension exactly on their 66 birthday. The UK government provides an online calculator to determine the exact state pension age based on date of birth and National Insurance record.
Statutory Sick Pay (SSP) is now effective from day one and the earlier unpaid waiting period has been removed, so employees receive pay starting from their first full day of illness. In addition, the Lower Earnings Limit, previously GBP 125 per week,has been removed. These reforms made in SSP will have a direct impact on employer costs and processes.
Singapore
Shared Parental Leave entitlement enhanced from 1 April 2026
Shared Parental Leave (SPL) in Singapore is a government-supported scheme that enables both parents to share paid leave during the first year of a child's life, with clear eligibility criteria, phased entitlements and government reimbursement to support working families and encourage shared caregiving between parents. From 1 April 2026, the eligible working parents are entitled to SPL of 10 weeks, which shall be taken within 12 months of the child's date of birth. This scheme is viewed as a positive development that aims to support families and promote gender equality in the workplace.
UAE
Wage Protection System updated effective from 1 June 2026
The UAE Ministry of Human Resources and Emiratization (MoHRE) has introduced changes to the Wage Protection System (WPS), with the revised framework governing wage payment obligation effective from 1 June 2026. This resolution significantly tightens wage payment timelines, strengthens compliance monitoring, and escalates enforcement measures across the private sector. The revised framework includes a unified due date of salary payment on the first day of each Gregorian month for the previous month, mandatory processing of salary through MoHRE-approved WPS or other authorized systems only, a regulatory threshold for compliance defined for employers and accelerated enforcement of penalties for delayed wage payment. From a broader regulatory perspective, this resolution aligns with the UAE's continued efforts to strengthen labour market transparency, reinforce employee welfare protections, and promote greater confidence and stability within the private sector employment landscape.
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Past Insights
Impact on Employers: Navigating the New Labour Code
India's labour landscape is undergoing one of its most significant reforms in decades. The Central Government has consolidated 29 labour laws into four comprehensive Labour Code the Code on Wages, 2020, Industrial Relations Code, 2020, Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code) and the Social Security Code, 2020. Phased implementation underway: large firms (>500 employees) from FY26, medium (100-500) next, small (<100) by FY28; some states pending rules.
For employers, the transition to the new regime will require careful planning, updated HR frameworks, policy revisions, and budget preparedness. The shift is not merely regulatory it will influence payroll design, workforce deployment, social security planning, and industrial relations.
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