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India Employee Cost Calculator

How the EOR cost estimate works

Your estimate combines the employee’s gross salary with the statutory employer contributions and a flat TMS service fee. There is no setup cost and you don’t need a legal entity in India — TMS acts as the Employer of Record.

What’s included in your fully-loaded cost

Gross salary (CTC) — the package you agree with the employee.
Employer PF — 12% of PF wages, subject to the statutory wage ceiling.
Employer ESIC — 3.25% of wages for employees within the ESIC wage limit (₹21,000/month).
Professional Tax & LWF — as applicable, by state.
Gratuity accrual — funded over tenure for eligible employees.
TMS service fee — a flat per-employee monthly fee, never a percentage of payroll.

Worked example

For a software engineer on ₹12,00,000 CTC per year based in Maharashtra, the monthly cost is the gross salary plus roughly 12% employer PF (up to the ceiling), ESIC where applicable, Professional Tax and LWF for Maharashtra, gratuity accrual, and the flat TMS per-employee fee. The calculator above breaks this down for your exact salary and state.

Frequently asked questions

Do I need a legal entity in India to hire through EOR?

No. TMS acts as the Employer of Record, so you can hire, pay and stay compliant in India without setting up a subsidiary.

How quickly can we onboard an employee?

Typically within 24–48 hours once the candidate’s details and offer terms are confirmed.

Are there setup or exit fees?

No setup fee. At exit, statutory notice applies and the full-and-final settlement is processed within the timeline set by India’s labour rules.

What statutory contributions does the employer pay?

Employer PF (12% of PF wages), ESIC (3.25% within the wage limit), Professional Tax and Labour Welfare Fund by state, plus gratuity accrual for eligible tenure.

Is the TMS fee a percentage of salary?

No — it is a flat per-employee monthly fee, so your cost stays predictable as salaries rise.

Can TMS also run payroll for our existing India team?

Yes. See Payroll Outsourcing for pan-India payroll, or Payroll Transfer to migrate an existing team onto TMS.

What this estimate covers, and what it cannot know

The number above is the monthly cost of employing one person in India through TMS. It has three parts: the gross salary you agree with the candidate, the statutory employer contributions that sit on top of it, and our management fee. Everything else on a TMS invoice is a pass-through at actuals.

A worked example

Take a mid-level engineer on ₹90,000 a month gross.

Gross salary: ₹90,000
Employer statutory contributions: roughly 10 to 25 percent depending on how the salary is structured and which state the person sits in. On this salary, budget somewhere near ₹9,000 to ₹13,000
TMS management fee: USD 100 for your first five employees, stepping down to USD 50 above 25

So the fully loaded monthly cost lands close to ₹1,00,000 to ₹1,04,000 plus the fee. The fee is the only part that is fixed per person. The statutory part moves with the structure.

Three things move this number more than people expect

Salary structure. Provident fund is calculated on basic wages, not on gross. Two offers with identical gross pay can carry different employer costs depending on how much of the package sits in basic. Under the Labour Codes the wage definition constrains how far you can push this.

State. Professional tax and labour welfare fund are state subjects. They are small amounts, but they differ by state and they are the line most often missed by teams running payroll from outside India.

When gratuity starts biting. Gratuity is a liability that accrues from day one and becomes payable at five years. Some providers bill it monthly, some only when it crystallises. That single choice changes the monthly number by a noticeable margin, so ask before you compare quotes.

What the estimator deliberately does not include

Variable pay, bonuses and incentives, because they are your policy, not a statutory figure
Background verification, which is quoted separately per employee
Insurance premiums, which are billed at the actual premium your chosen cover attracts
Equipment, workspace and travel, all of which are pass-through
Anything involving a foreign national on Indian payroll, which carries visa and tax questions this tool cannot model

Treat the output as a planning figure, not a quote. We issue a binding cost sheet per role once we know the state, the structure and the start date.

EOR cost questions we get asked

Is the EOR fee charged on top of salary?

Yes. You fund the gross salary and the employer statutory contributions, and the management fee sits on top of both. Nothing is deducted from the employee's pay to cover it.

Why is a flat fee better than a percentage of salary?

Percentage pricing makes senior hires disproportionately expensive and quietly raises your cost every time someone gets an increment. The compliance work does not scale with salary, so the fee should not either.

Does the cost change if my employee is outside a metro?

The management fee does not. Statutory items can, because professional tax and labour welfare fund are set by the state. We confirm the exact figures for the employee's state in the quote.

What is the minimum team size?

One. There is no minimum headcount, and onboarding usually runs 24 to 48 hours from a signed agreement and an accepted offer.

How accurate is this estimate?

Close enough to budget with, not close enough to sign. It uses indicative statutory percentages and an indicative exchange rate. The binding number comes from the cost sheet, which is priced against the actual role, state and salary structure.