| Payroll Contributions | Cost |
|---|---|
|
Provident Fund (PF) (This contribution covers Employee’s Provident Fund (EPF) and Employee’s Pension Scheme (EPS)). EPF is for claims related to unemployment and EPS is for pension after retirement. |
12% of the employee’s basic salary capped at INR 1800 (approx) per month. |
| Employee’s State Insurance (ESI) |
3.25% of employee monthly gross pay if monthly salary< INR 21000.
0% for employees with a salary over INR 21000 |
| Employer health insurance contribution |
50% of total health insurance cost for the employee and his/her dependents.
Varies from INR 200 to INR 2000 per month |
| Gratuity pay (Accrued and will be paid to employees after 5 years of continuous employment. Paid only after they leave the company) |
15 days of gross pay for every year.
Approximately 4.1% of employee’s gross salary. |
| Total | * ~15% |
*Please note that any overage fee collected as part of the employer payroll costs will be refunded to the customer by Global Squirrels upon an employee’s termination of employment.
When planning to hire employees in India, businesses should also calculate ongoing payroll-related costs such as employer contributions, statutory benefits, insurance, gratuity, and other compliance-based expenses. These costs can impact the total employment budget beyond the employee’s base salary.
For a detailed breakdown, refer to our guide on India payroll costs and calculations, which explains the key employer and employee payroll contributions businesses should consider before hiring in India.
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