What is the total employer PF contribution in India?

The employer pays 13% of the PF wage (basic + DA, capped at ₹15,000/month). This breaks down as 3.67% EPF, 8.33% EPS, 0.5% EDLI, and 0.5% admin charges. The employee also contributes 12% of their PF wage.

Is ESI always applicable?

No. ESI applies only if the monthly gross wage is ≤ ₹21,000 and the establishment is covered under the ESI Act. The employer contributes 3.25% and the employee 0.75% of gross wages.

What is the statutory burden as a percentage of CTC?

For a mid-level employee, employer-side statutory costs (PF + ESI + gratuity + bonus) typically add 8–14% on top of the CTC. This calculator shows the exact percentage for your specific inputs.

Is provident fund mandatory for a startup in India?

EPF registration is generally required once an establishment crosses 20 employees, and many smaller employers register voluntarily. Where it applies, the employer contributes 13% of the PF wage (basic plus DA, capped at ₹15,000 a month) on top of the employee share.

Does the employer PF contribution keep rising with a high salary?

No. Employer PF is calculated on the PF wage of basic plus DA, but that wage is capped at ₹15,000 a month. So once basic plus DA reaches ₹15,000, the employer PF stays at ₹1,950 a month (13% of ₹15,000) regardless of how high the salary goes.

Why is gratuity shown as a monthly cost when it is paid only on exit?

Gratuity is legally payable only after 5 years of continuous service and is a lump sum on exit, but prudent employers provision for it every month so the liability does not hit cash flow all at once. This calculator provisions it at 4.81% of basic per month for that reason.

Does this calculator include professional tax or TDS?

No. It covers employer-side statutory costs — PF, ESI, gratuity provision and bonus — that sit on top of CTC. Professional tax is a state-level deduction from the employee and TDS on salary is withheld from the employee, so neither adds to the employer cost shown here.

Why does the ESI cost disappear when I raise the salary?

Employer ESI of 3.25% applies only while monthly gross wages are ₹21,000 or below. Above that threshold the employee falls outside ESI coverage, so the contribution drops to nil — which is why the figure vanishes once you enter a gross above ₹21,000.

Total Employment Cost Calculator (India)

See the true cost of your team — CTC plus employer statutory contributions. Factor in PF (13% of basic), ESI, gratuity provision and bonus to understand your real payroll burden.

Monthly gross salary per employee

₹

Basic + DA + HRA + special allowances before deductions.

₹50 thousands

Number of employees

Total employees on your payroll.

Basic + DA as % of gross

Typically 40–60% of gross. PF and gratuity are computed on this component.

Total annual employment cost

₹63,78,300

CTC + employer PF, ESI, gratuity and bonus — the true cost to the business.

Total annual CTC₹60,00,000

Employer PF contribution₹2,34,000

Employer ESI contribution₹0

Gratuity provision₹1,44,300

Bonus provision₹0

Statutory burden per employee₹37,830

50,000/mo × 10 employees × 12 months.

Estimates only — not financial, tax or legal advice. Figures vary by state, capital and individual circumstances.

How to use this calculator

Enter gross salary, headcount and basic-to-gross ratio to see the full employer-side cost of your team.

1
Enter monthly gross salary per employee. The gross salary including basic, HRA, and all allowances before deductions like PF and TDS.
2
Enter headcount. How many employees you have on payroll. The calculator computes totals across your entire team.
3
Set the basic pay percentage. PF and gratuity are calculated on basic + DA. Typically 40–60% of gross.
4
Read your total cost. See the total employment cost including all statutory contributions, broken down per item.

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Employer statutory costs in India

In India, the cost of an employee goes well beyond their CTC. Employers must contribute to several statutory funds and schemes. These contributions are real costs that impact your burn rate and unit economics.

Employee Provident Fund (EPF) — Employer share: 3.67% of basic + DA (capped at ₹15,000/month). The employer pays an additional 8.33% to the Employee Pension Scheme (EPS), 0.5% to EDLI, and 0.5% as admin charges — totalling 13% of the PF wage.
Employee State Insurance (ESI): 3.25% of gross wages for employees earning up to ₹21,000/month. Provides medical and disability benefits. Not applicable above the threshold.
Gratuity: 4.81% of basic + DA. Payable to employees who have completed 5 years of continuous service. Often provisioned monthly even though it's paid out only on exit.
Bonus (Payment of Bonus Act): Minimum 8.33% of basic + DA (capped at ₹21,000/month or the actual basic, whichever is lower) for eligible employees. Payable annually.

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The true cost of an employee

A common mistake founders make is budgeting only the CTC and ignoring the employer-side statutory costs. For a mid-level employee earning ₹50,000/month gross, the employer's total cost is approximately ₹54,500–57,000/month including PF, ESI, and gratuity — roughly 9–14% above the gross salary.

An employee with ₹50,000/month gross, 25 employees on payroll:

Monthly gross per employee: ₹50,000
Basic (50%): ₹25,000
Employer PF (capped at ₹15k basic): ₹1,950/mo
Gratuity provision: ₹1,202/mo

Statutory burden per employee ≈ ₹3,152/month. Across 25 employees that's ₹78,800/month — or ₹9,45,600/year added to your payroll cost.

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How PF is calculated for employers

The employer PF contribution has four components, all calculated on the PF wage (basic + DA, capped at ₹15,000/month):

EPF contribution: 3.67% of PF wage — goes to the employee's provident fund account.
EPS contribution: 8.33% of PF wage (capped at ₹15,000) — goes to the Employee Pension Scheme. The employer effectively bears both the EPF and EPS components.
EDLI contribution: 0.5% of PF wage — Employee Deposit Linked Insurance.
EPF admin charges: 0.5% of PF wage — administrative fee.

Total employer PF burden is 13% of the PF wage. If basic + DA exceeds ₹15,000/month, the PF employer contribution is capped at ₹1,950/month (13% × ₹15,000).

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