Employee cost calculator: what a hire really costs
A salary is only part of what an employee costs. This employee cost calculator starts from the monthly gross salary and adds everything an employer in India pays on top: employer PF and EPS, EDLI insurance and PF admin charges, employer ESI, the gratuity provision, statutory bonus, variable pay, insurance and perks — then the overheads of having someone at work, such as the seat, laptop, software, recruitment and training.
The result is the fully loaded cost per month and per year, the cost of each working hour and the multiplier over gross pay — the numbers you need to budget a hire, price a service or decide between hiring and outsourcing. It works in your browser, every rate is editable, and the figures are estimates rather than accounting or legal advice.
How to use the Employee Cost Calculator
- Enter the Monthly gross salary and the Basic + DA share, plus any variable pay, insurance and other benefits.
- Check the statutory settings: how PF applies, the ₹25,000 ceiling, the bonus rate, the Labour Code 50% rule, ESI, EDLI and gratuity.
- Fill in overheads: seat cost, equipment with its life in years, software, recruitment spread over the expected tenure, training and anything else.
- Set the working days, hours, paid holidays and leave to get the cost per working hour.
- Read the monthly and annual cost and the breakdown, then copy it or download a CSV.
Employee Cost Calculator features
Every employer contribution
PF and EPS at 12%, EDLI and admin at 0.5% each, ESI at 3.25%, gratuity at 4.81% and statutory bonus.
Labour Code wages
If basic + DA is under half of gross, the excess allowances count as wages for PF, ESI and gratuity.
Overheads amortised
One-off equipment and recruitment costs are spread over their useful life and the expected tenure.
Cost per hour and day
Divides the annual cost by productive time after holidays and leave.
Shareable breakdown
Monthly, yearly and percentage share for each line; copy or download as CSV.
How the true cost of an employee is built up
Total cost = gross salary + employer PF + EDLI + PF admin + employer ESI + gratuity provision + statutory bonus + variable pay + benefits + overheads. Employer contributions use “wages” — basic + DA, raised to half of gross pay under the Labour Codes. PF is 12% of wages up to ₹25,000 a month unless you contribute on full wages; ESI applies only when ESI wages are ₹21,000 or less; statutory bonus only when wages are ₹21,000 or less, computed on ₹7,000 or the minimum wage.
Worked example (the default): ₹60,000 gross with 50% basic gives wages of ₹30,000. The employer adds ₹3,000 of PF (12% of the ₹25,000 ceiling), ₹125 each of EDLI and admin, and ₹1,442 of gratuity provision; there is no ESI or statutory bonus at this pay. Variable pay of ₹60,000 a year, ₹15,000 of insurance and ₹1,500 a month of perks add ₹7,750 a month, so the salary package (CTC) is ₹72,442. Overheads — ₹8,000 seat, ₹2,500 of laptop, ₹3,000 of software, ₹2,500 of recruitment and ₹2,000 of training — bring the total to ₹90,442 a month, ₹10,85,308 a year or 1.51× the gross salary. Over 232 working days of 8 hours, each hour costs ₹584.76.
Employer contributions at a glance (October 2026)
To turn a CTC into a salary structure use the CTC calculator; for a whole team’s month, the payroll calculator.
| Item | Employer pays | Applies when |
|---|---|---|
| Provident fund | 12% of wages (8.33% of it to EPS) | Establishments with 20+ employees; wages up to ₹25,000 or full wages |
| EDLI | 0.5% of wages up to the ceiling | PF members |
| PF admin charges | 0.5% of PF wages, minimum ₹500 a month | Per establishment |
| ESI | 3.25% (employee 0.75%) | ESI wages up to ₹21,000 a month |
| Gratuity | 15 days’ wages per year of service (4.81%) | Paid after 5 years, or 1 year for fixed-term staff |
| Statutory bonus | 8.33%–20% of wages (₹7,000 or minimum wage cap) | Wages up to ₹21,000; 20+ employees |
Using the cost per hour
- Pricing services: an agency billing a ₹60,000-salary employee at less than about ₹585 an hour (at full utilisation) loses money before any profit or idle time.
- Hire or outsource: compare the annual cost with a contractor’s quote; the freelance rate calculator shows the other side.
- Budgeting raises: a 10% raise lifts salary-linked items (PF up to the ceiling, gratuity, bonus) too, not only the gross pay.
Rules used (as of October 2026)
Code on Social Security, 2020 and Code on Wages, 2019 (in force from 21 November 2025; labour.gov.in): EPF wage ceiling ₹25,000 from 17 September 2026 (S.O. 5109(E)); EDLI 0.5% and PF admin 0.5% with a ₹500 minimum (EPFO, from 1 June 2018); ESI 3.25% up to ₹21,000 (ESIC); gratuity at 15 ÷ 26 of monthly wages per year, as in the gratuity calculator; statutory bonus under Chapter IV of the Code on Wages. Assumptions: wages are basic + DA; the PF admin minimum applies to the whole establishment, so it is not added for one employee; labour welfare fund and employee state taxes are not included.
Employee Cost Calculator FAQ
What is the true cost of an employee?
Gross salary plus the employer’s PF, EDLI, admin, ESI, gratuity and bonus, benefits such as insurance, and overheads like the seat, equipment, software and recruitment. The employee cost calculator adds them up.
How much does an employer pay on top of salary in India?
At ₹60,000 gross with 50% basic, statutory items add about ₹4,700 a month; with variable pay, insurance and perks the package is about ₹72,400. Overheads typically add more, depending on your office and tools.
Is CTC the same as the cost to the employer?
Not quite. CTC is the salary package — gross pay, employer PF, gratuity and benefits. The true cost also includes overheads that never appear in an offer letter, such as office space, equipment and recruitment.
How is cost per hour calculated?
Annual cost ÷ (working days a week × 52 − paid holidays − paid leave) ÷ hours a day. With 5 days, 10 holidays, 18 days’ leave and 8 hours, a year has 1,856 working hours.
Does the employer pay ESI on all salaries?
No. Employer ESI of 3.25% applies only while ESI wages are ₹21,000 a month or less (₹25,000 for a person with a disability).
When is statutory bonus payable?
To employees whose wages are ₹21,000 a month or less, at 8.33% to 20% of wages, computed on ₹7,000 or the minimum wage if higher. Use the bonus calculator for the full rules.