A ₹40,000-a-month hire costs more than ₹4.8 lakh a year. Add employer PF, ESI, gratuity provision, statutory bonus, insurance, equipment and the seat they occupy, and the "fully-loaded" cost lands closer to ₹5.8–6.5 lakh. Small businesses that price projects, bid for contracts or decide between a hire and a freelancer need that number, not the payslip figure. This calculator builds the total annual employee cost from gross salary and your statutory obligations, with the 2026 EPF ceiling, ESI limits and bonus rules applied automatically.
The components
| Item | Rule (2026) |
|---|---|
| Gross salary | Basic + HRA + allowances, monthly × 12 |
| Employer EPF | 12% of basic + DA, on wages up to the ₹25,000 ceiling (or full basic if you opt), plus EDLI 0.5% and admin charges 0.5% |
| Employer ESI | 3.25% of gross where gross ≤ ₹21,000 (establishments with 10+ employees) |
| Gratuity provision | 4.81% of basic + DA, payable after 5 years (pro-rata for fixed-term staff after 1 year) |
| Statutory bonus | 8.33%–20% of ₹7,000 or minimum wage, whichever is higher, for employees earning up to ₹21,000 |
| Leave encashment provision | Optional; days × per-day rate |
| Insurance, meals, transport, phone | Actuals |
| Equipment, software seats, workspace | Amortised per employee |
| Recruitment and training | One-time, spread over expected tenure |
The EPF ceiling change on 17 September 2026 raised the employer's PF outgo for anyone with basic between ₹15,000 and ₹25,000 by up to ₹1,200 a month; the calculator reflects it.
How to use the calculator
- Enter monthly gross and the basic percentage (40–50% is typical).
- Toggle the statutory items that apply: EPF (mandatory at 20+ employees), ESI (10+ employees, gross ≤ ₹21,000), gratuity and bonus.
- Add benefits and overheads — insurance premium, meals, laptop, software, desk.
- Read the annual cost, the monthly loaded cost and the cost per working hour (based on 8-hour days and your working-day calendar) for pricing.
- Compare against a contractor's quote using the freelance rate calculator from the other side.
Using the number
- Pricing services: a consultant costing ₹1,200 an hour loaded must bill at ₹2,000–2,400 to cover utilisation of 60% and margin. The profit margin calculator closes the loop.
- Hire vs outsource: compare the loaded cost with a vendor's annual fee, remembering that GST on a vendor's invoice is creditable while payroll costs are not.
- Budgeting: multiply loaded cost by headcount for the year's people budget; add the increment percentage.
- Structure: the Labour Codes require basic (wages) to be at least 50% of total remuneration for PF and gratuity purposes, which limits the old trick of a tiny basic. Details in The four Labour Codes are in force.
Common omissions
- Forgetting EDLI and admin charges (about 1% on PF wages).
- Ignoring gratuity because "nobody stays five years" — it is a real liability that auditors expect provisioned.
- Missing the bonus for staff up to ₹21,000, which is payable within eight months of the year end.
- Not counting paid leave — 24 days of leave on a 300-day year is 8% of cost.
- Treating reimbursements as free — fuel and phone bills are still cash out.
Related tools
- In-hand salary calculator — the employee's view of the same CTC.
- Offer letter generator — put the CTC you costed into a letter with its annexure.
- Team payroll calculator — monthly payouts for the whole team.
- Statutory bonus calculator — the exact bonus liability.
- EPF & gratuity calculator — long-term liabilities.
- Freelance rate calculator — contractor comparison.