Employment Cost Calculator for India

Thinking of employing someone in India? As in every country, certain costs are associated with employing a worker that come on top of the gross salary you offer. In India, both employers and employees must make social security contributions. For employers, these typically range from 15% to 25% of gross wages, depending on the employee’s salary level and eligibility for schemes like Provident Fund, State Insurance, gratuity, and statutory bonus.

Use our interactive employment cost calculator to see the total salary costs in India. You can also get a detailed employee cost breakdown in PDF (like this one but with actual data), showing the gross salary, employer contributions, deductions, and the final net pay for employees.

In India, an employee’s net pay is their gross salary minus statutory deductions, which employers are legally required to withhold and remit. Under the Payment of Wages Act, 1936, wages must be paid monthly, in money rather than in kind, and by the last working day of each month. Employers must also issue payslips showing gross salary, deductions, and the resulting net pay.

Key employee-side deductions include:

• Progressive income tax (TDS): 0%–30%, depending on income.
• Provident Fund (EPF): 12% of basic salary + dearness allowance.
• Employees’ State Insurance (ESI): 0.75% of gross wages (if monthly salary ≤ ₹21,000).
• Professional Tax: State-level levy, typically up to ₹200 per month.

These deductions reduce gross salary to the employee’s take-home pay, while ensuring compliance with Indian tax and labour laws and providing employees with long-term benefits like retirement savings, insurance, and social protections.