India employee cost calculator
The number that matters is the loaded employer cost, not the salary. This free India employee cost calculator turns a gross salary in USD, GBP, EUR, AUD or INR into the full breakdown at 2026 rates — PF, ESI, professional tax, TDS and the flat EOR fee.
2026 statutory rates · updated 27 Aug 2026Your hire
Updates as you typeThat is ₹1,66,667 a month
Total cost of employment
₹24,24,380per year
₹2,02,032 per month — ₹1,66,667 gross, plus 21.2% for employer costs and the EOR fee
Employee take-home
₹1,48,622
per month, after TDS
Breakdown, per month
Labour welfare fund is a monthly accrual. Gratuity is payable after five years of continuous service, capped at ₹20 lakh. The optional provision is for budgeting.
A commercial service fee.
Deducted from gross to reach take-home
TDS is an estimate on the new regime at 2025-26 slabs. Actual withholding depends on the employee's regime choice and declared deductions. It does not change the employer's cost.
Annual figures are twelve times the monthly, so they can sit a few rupees off the professional tax and TDS schedules.
Statutory costs computed on the INR figure at 27 August 2026 rates. Estimates for budgeting, not a quote.
3 salaries, same state and settings. The statutory load falls as salary rises, because employer PF is capped at ₹1,800 a month and the flat EOR fee does not move with salary.
Salary A
Total cost / year
₹19,24,140
28.3% of gross for employer costs and the EOR fee
- Gross salary
- ₹1,25,000
- Statutory employer costs
- ₹2,026
- SynkPay EOR fee
- ₹33,319
- Total cost of employment, per month
- ₹1,60,345
- Of the gross above, employee take-home
- ₹1,14,863
Salary B
Total cost / year
₹34,24,884
14.2% of gross for employer costs and the EOR fee
- Gross salary
- ₹2,50,000
- Statutory employer costs
- ₹2,088
- SynkPay EOR fee
- ₹33,319
- Total cost of employment, per month
- ₹2,85,407
- Of the gross above, employee take-home
- ₹2,08,338
Salary C
Total cost / year
₹64,26,384
7.1% of gross for employer costs and the EOR fee
- Gross salary
- ₹5,00,000
- Statutory employer costs
- ₹2,213
- SynkPay EOR fee
- ₹33,319
- Total cost of employment, per month
- ₹5,35,532
- Of the gross above, employee take-home
- ₹3,68,573
Annual figures are twelve times the monthly, so they can sit a few rupees off the professional tax and TDS schedules.
Take this breakdown with you
Every line item, dated and rate-stamped.
Total cost / year
₹24,24,380
EOR or your own India entity
The calculator above prices the EOR route. If you are weighing up incorporating instead, this is what changes.
Employer of Record
No entity, no local bank account, no state-by-state labour registration.
One business day to onboard; no setup fee and no salary deposit.
Flat $349 per employee per month, whatever the salary.
PF, ESI, professional tax and TDS filings handled for you.
Sensible below roughly 15–20 people, or while India is a test market.
Your own private limited company
Incorporation, PAN, TAN, GST and PF/ESI registrations before the first hire.
Three to four months to be operational in practice.
Ongoing accounting, audit, secretarial and payroll costs regardless of headcount.
Directors carry statutory liability for filings and labour compliance.
Starts to pay off at scale, or when India becomes a permanent centre.
How much does it cost to employ someone in India?
Total cost of employment (TCE) is gross salary plus everything the employer is obliged to pay on top of it: Provident Fund, Employees’ State Insurance where it applies, labour welfare fund, EPF administration and EDLI charges, and employer liability insurance. Professional tax and TDS are deducted from the employee’s salary, not added to it — the employer only remits them. Through an EOR the service fee sits on top of that; through your own entity, entity running costs do.
The distinctive thing about India is that statutory employer costs shrink in percentage terms as salary rises. PF is capped at ₹1,800 a month and ESI stops once gross pay exceeds ₹21,000 a month. At or below that ceiling employer contributions run roughly 9–10% of gross; on a senior engineer at ₹1,50,000 a month they are about ₹2,038, or 1–2%.
Gratuity is the exception. It accrues at 4.81% of basic pay, so at senior salaries it is the largest statutory item by far — roughly tripling the monthly statutory figure. It only becomes payable after five years of continuous service and the statutory payout is capped at ₹20 lakh, which is why the calculator leaves it off by default. Comparing markets? See the Australia employee cost calculator.
2026 rates, ceilings and who pays
The standard India salary structure
Indian offers are split into components rather than quoted as one figure, because statutory contributions are calculated on parts of the package rather than all of it. The calculator uses the market-standard split.
Basic salary
50% of gross
The base for PF, gratuity and most other statutory calculations.
House rent allowance
40% of basic
Partly exempt from income tax for employees paying rent.
Special allowance
The remainder
Fully taxable, and the flexible part of the package.
Because PF and gratuity are pegged to basic, this structure keeps employer contributions predictable while giving the employee some tax relief through HRA.
What is deducted from an employee’s salary in India?
Employee deductions do not change your cost, but they decide what lands in the employee’s account — which is the number candidates negotiate on. Income tax is withheld at source (TDS). The calculator applies the new regime at 2025–26 slabs after the ₹75,000 standard deduction: nil to ₹4 lakh, then 5%, 10%, 15%, 20%, 25% and 30%, with the section 87A rebate that makes income up to ₹12 lakh tax-free, marginal relief just above it, surcharge above ₹50 lakh, and 4% cess.
It remains an estimate. Actual withholding depends on the employee’s regime choice and declared tax-saving instruments — 80C, HRA exemption, home-loan interest. Alongside TDS sit the employee’s own 12% PF contribution, professional tax by state, ESI at 0.75% where applicable, and the labour welfare fund.
The laws behind these numbers
Three instruments do most of the work: the Employees’ Provident Funds and Miscellaneous Provisions Act 1952, the Employees’ State Insurance Act 1948, and state-level professional tax Acts. PF registration is administered by the EPFO and applies to establishments covered by the Act. ESI covers employees earning ₹21,000 a month or less and provides medical, cash and maternity benefits. Professional tax is levied per state, with slab rates that differ and an annual liability capped at ₹2,500 — Delhi, Haryana and Rajasthan do not levy it at all.
Rates and thresholds move. Most foreign companies hiring a handful of people in India use an Employer of Record or HR outsourcing rather than tracking state-by-state changes themselves.
How to use this calculator
Enter the gross salary in your own currency and switch between annual and monthly.
Pick the employee's state so professional tax and labour welfare fund are right.
Add the gratuity provision if you are budgeting past the five-year mark.
Open the line-item detail, or compare salaries and whole-team totals in the tabs.
Email yourself the PDF, and bring it to a call if the numbers look workable.
Frequently asked questions
What does this employee cost calculator include?
Gross salary, employer PF (12% of basic, capped at ₹1,800/month), employer ESI (3.25% of gross for employees earning ₹21,000/month or less), professional tax by state (capped at ₹2,500/year, deducted from the employee rather than added to the employer's cost), the employer share of the labour welfare fund, EPF administration and EDLI charges (1% of PF wages), employer liability insurance, an optional gratuity provision at 4.81% of basic, and the flat $349/employee/month EOR fee. It returns total cost of employment (CTC) monthly and annually, plus the employee's take-home pay after deductions.
What is the difference between CTC, gross salary and take-home pay in India?
Cost to company (CTC) is the employer's total outlay: gross salary plus employer PF, ESI where it applies, the employer share of the labour welfare fund, EPF administration and EDLI charges, employer liability insurance and any gratuity provision — and through an Employer of Record, the service fee on top. Gross salary is the figure in the offer letter, before anything is taken out. Take-home is what reaches the employee's account after their own PF contribution, professional tax, ESI where applicable, their share of the labour welfare fund and TDS. Indian offers are usually quoted as CTC, which is why a candidate's take-home is always lower than the number they were offered. This calculator shows all three from a single gross figure.
How does Provident Fund work in India?
PF is administered by the Employees' Provident Fund Organisation and applies to registered establishments. Employer and employee each contribute 12% of basic salary, capped at ₹1,800 a month each. Contributions form the employee's retirement savings. PF is calculated on basic salary only, not on full gross.
When does ESI apply?
ESI applies where gross salary is ₹21,000 a month or less. The employer contributes 3.25% of gross and the employee 0.75%, covering medical, maternity and disability benefits. Above that ceiling neither side contributes, which is why the employer load drops sharply at senior salaries.
How much does professional tax vary by state?
It is set state by state. Rajasthan, Delhi and Haryana do not levy it. States that do use monthly, half-yearly or annual slabs, with total annual liability capped at ₹2,500. The calculator applies the correct slab for the state you select.
Why is salary split into basic, HRA and special allowance?
It is the standard Indian structure. Basic, typically 50% of gross, is the base for PF and gratuity. HRA, typically 40% of basic, is partly exempt from income tax for employees paying rent. Special allowance is the remainder and is fully taxable. The split keeps employer contributions predictable and gives the employee some tax relief.
What costs sit outside this calculator?
Group health insurance, which is not mandatory but common for white-collar roles, adds roughly ₹3,000–8,000 per employee per year. Gratuity is available as an optional provision above; SynkPay does not accrue it monthly, we calculate it when an employee becomes eligible and collect it then. Equipment and one-off background verification are also separate.
Costed the hire? Let’s make it real.
Employment contracts, payroll, PF and ESI registration and every statutory filing, from a directly owned India entity. One business day to onboard, flat $349 per employee per month, no deposit.