Cost to Hire an Employee in India (2026)

• Gross salary, usually paid monthly.
• Employer costs of about 4.0% at a ₹2,400,000 salary: ₹96,720 a year, of which the largest is gratuity provision (estimate).
• An EOR fee, if you hire without your own entity. The providers in our India guide publish starting prices of US$459–699 per employee per month.

Mandatory employer costs at a ₹2,400,000 salary (mid-level professional). Employee contributions and income tax come out of gross pay and aren't included.

Contribution ceilings mean employer costs can be a smaller share of higher salaries. Figures exclude the EOR fee.

• Provident fund (EPF): 12% of basic (wage ceiling ₹25,000/mo from 17 Sep 2026)
• Labour Codes in force: Since 21 Nov 2025
• Minimum wage: Varies by state and skill level
• Salary structure rule: Basic + DA ≥ 50% of pay
• Maternity leave: 26 weeks (employer-paid)

• Group health insurance (optional) (₹15,000 / year): Standard benefit for professional roles; family cover costs more.
• ESI (3.25% employer) only applies to employees earning up to ₹21,000 a month, so it is not included at these salary levels.
• If the employer contributes PF on full basic pay, as many companies do, PF rises to about 6% of gross at these salaries.
• Employee PF (12% of basic), professional tax and income tax (TDS) are deducted from pay and are not employer costs.
• Maternity leave of 26 weeks is paid by the employer (for employees not covered by ESI), a significant contingent cost.
• Gratuity is shown as an annual provision; it becomes payable after five years of service (one year for fixed-term employees under the Labour Codes).

Without your own entity in India, an Employer of Record can employ your hire for a monthly fee. The alternative is setting up your own Indian private limited company. See the comparison in our India guide and EOR vs local entity.