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EMPLOYER COST / 2026-27 / INDIA

India employer cost (CTC) calculator

Work out what an employee costs your business in India for 2026-27: gross salary plus employer PF and EPS, EDLI, PF admin charges, ESI, a gratuity provision, Labour Welfare Fund and bonus.

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Your details

01Employee

Fixed pay before the employee's deductions: basic, DA, HRA and allowances. 12 LPA is ₹12,00,000.

Sets the employer's Labour Welfare Fund share (included for Maharashtra so far).

02PF and statutory wages

Under the Code on Wages, allowances above half of total pay count as wages for PF, gratuity and bonus.

03Other employer costs

An estimate: 15/26 of a month's wages for each year of service. There is no statutory yearly rate.

The Code on Wages sets 8⅓% to 20% of wages for eligible employees; the wage limits have not been notified, so enter what you pay.

Group health insurance, meal cards, equipment, training and so on.

Cost to company per year

₹12,67,996

for ₹12,00,000 gross salary, 2026-27

Cost to company per month
₹1,05,666
Employer costs on top of gross
₹67,996
Employer PF and EPS (12%)
₹36,000
EDLI and PF admin charges
₹3,000
Employer ESI (3.25%)
₹0
Gratuity provision (estimate)
₹28,846
Cost multiplier (× gross)
1.06
  • PF wages are ₹50,000 a month (basic + DA). The employer's 12% is ₹3,000 a month, of which ₹2,083 goes to the pension scheme (EPS, at most ₹2,083 a month) and the rest to the employee's provident fund.
  • EDLI is 0.5% of PF wages up to ₹25,000 a month and PF admin charges are 0.5% of the pay PF is paid on. EPFO charges at least ₹500 a month in admin charges per establishment, which this per-employee figure does not add.
  • No employer ESI: gross pay is above ₹21,000 a month. An employee covered at the start of an ESI contribution period stays covered until it ends.
  • The gratuity provision is an estimate: 15/26 of a month's wages for each year (about 4.81% of wages). Gratuity is paid only on leaving, after 5 years for most employees, and the law sets no yearly provisioning rate.
  • Maharashtra's Labour Welfare Fund: the employer pays ₹75 per employee every June and December. Whether a role is covered depends on the state Act.

Cost to company per year: ₹12,67,996 for ₹12,00,000 gross salary, 2026-27

What this employee costs
Show the breakdownPer monthPer year
Gross salary₹1,00,000₹12,00,000
Employer EPF₹917₹11,004
Employer EPS (pension)₹2,083₹24,996
EDLI₹125₹1,500
PF admin charges₹125₹1,500
Gratuity provision (estimate)₹2,404₹28,846
Labour Welfare Fundpaid twice a year₹13₹150
Cost to company₹1,05,666₹12,67,996
Where the cost goes (per year)
95%TAKE-HOME
  • Gross salary₹12,00,00095%
  • Employer PF, EDLI and admin₹39,0003%
  • Gratuity provision₹28,8462%
  • LWF, bonus and other costs₹150<1%

₹12,67,996

for ₹12,00,000 gross salary, 2026-27

How it's calculated

This calculator is for employers. It starts from the gross salary you plan to pay (basic, DA, HRA and allowances) and adds what the law makes you pay on top, to give the employee's total cost to company (CTC) for 2026-27. If you are an employee working out your take-home pay from an offer letter, use the CTC to in-hand salary calculator instead.

  1. PF wages. Basic + DA, plus any allowances above half of gross pay. Under the Code on Wages, if allowances are more than 50% of total pay, the excess counts as wages for PF, gratuity and bonus.Ministry of Labour and Employment
  2. Employer PF = 12% of PF wages, either on wages up to the ceiling of ₹25,000 a month (from 17 September 2026) or on actual PF wages if you contribute on full basic.Ministry of Labour and Employment Of that, 8.33% of wages up to the ceiling goes to the Employees' Pension Scheme (EPS) and the rest to the employee's provident fund.EPFO
  3. EDLI (insurance) = 0.5% of PF wages up to the ceiling, and PF admin charges = 0.5% of the pay PF is paid on.EPFO Both are paid by the employer alone.
  4. Employer ESI = 3.25% of gross pay, only when gross pay is up to ₹21,000 a month.ESIC
  5. Gratuity provision = PF wages × 15 ÷ 26 for each year, which is the yearly share of the gratuity paid on leaving. This is an estimate: the Code on Social Security sets how gratuity is paid on exit, not how much to set aside each year.Ministry of Labour and Employment
  6. Labour Welfare Fund: the employer's share for the state. Maharashtra is ₹75 per employee every June and December.Maharashtra Government Gazette
  7. Statutory bonus (optional) = the percentage you enter × PF wages. The Code on Wages sets a minimum of 8⅓% and a maximum of 20% of wages for eligible employees.Gazette of India

The formula

Cost to company = gross salary + employer PF (EPF + EPS) + EDLI + PF admin charges + employer ESI + gratuity provision + employer Labour Welfare Fund + statutory bonus + other costs.

PF, EDLI and admin charges are worked out on monthly wages and rounded to the rupee, then multiplied by 12. The monthly cost is the yearly cost ÷ 12.

Worked example

A ₹12 lakh (12 LPA) gross salary in Maharashtra with basic at half of gross, PF on wages up to the ceiling and a gratuity provision costs ₹12,67,996 a year, or ₹1,05,666 a month.

₹12 lakh gross salary, Maharashtra, PF on the ceilingEMPLOYER COST / 2026-27 / INDIA
LinePer monthPer year
Gross salary₹1,00,000₹12,00,000
Employer EPF₹917₹11,004
Employer EPS (pension)₹2,083₹24,996
EDLI₹125₹1,500
PF admin charges₹125₹1,500
Gratuity provision (estimate)₹2,404₹28,846
Labour Welfare Fund₹13₹150
Cost to company₹1,05,666₹12,67,996

If the same employee's basic is only 30% of gross and you pay PF on actual wages, the 50% wage rule lifts PF wages to half of gross and the cost rises to ₹13,05,496. A ₹2.4 lakh gross salary in Karnataka is within the ESI limit, so the employer also pays ₹7,800 of ESI a year.

Assumptions and limitations

  • Fixed pay, paid evenly. Variable pay, incentives, overtime and reimbursements are not included unless you add them under other costs.
  • The 50% wage rule is applied to gross salary only. The Code counts some other payments (such as the employer's own PF contribution) in total remuneration, which can change the add-back slightly.
  • Gratuity provision ignores the five-year qualifying period, pay rises, attrition and discounting that an actuarial valuation would use. Some employers fund it through an insurer's group gratuity scheme instead.
  • EPF admin charges have a minimum of ₹500 a month per establishment, which matters for very small payrolls and is not added per employee.
  • ESI uses the current month's gross pay. An employee covered at the start of a contribution period (April to September or October to March) stays covered until it ends.
  • Labour Welfare Fund is included for Maharashtra only. Other states' funds, and who counts as an employee under each state Act, are not covered yet.
  • Statutory bonus defaults to 0% because the wage limits that decide who is eligible have not yet been notified under the Code on Wages.
FAQ

Questions people ask

How do I calculate CTC from gross salary as an employer?

Add the employer's statutory costs to the gross salary. These are employer PF at 12% of PF wages, EDLI at 0.5% and PF admin charges at 0.5%, employer ESI at 3.25% if gross pay is up to ₹21,000 a month, a gratuity provision of 15/26 of a month's wages for each year, and your state's Labour Welfare Fund share. Add any bonus, insurance and other benefits you pay.

How much PF does the employer pay on a salary above ₹25,000 a month?

If you contribute on wages up to the ceiling of ₹25,000 a month that applies from 17 September 2026, the employer pays ₹3,000 a month: ₹2,083 to the Employees' Pension Scheme and ₹917 to the provident fund. If you contribute on actual basic instead, the employer pays 12% of the full PF wages, but the pension share stays at ₹2,083 and the extra goes to the provident fund.

Are EDLI and PF admin charges part of CTC?

They are a real cost to the employer and are paid only by the employer: EDLI insurance at 0.5% of PF wages up to the ceiling and administrative charges at 0.5% of the pay PF is paid on. EPFO charges at least ₹500 a month in admin charges per establishment. Many offer letters leave them out of the CTC shown to the employee, but your budget should include them.

How much gratuity should an employer provide for each year?

No law sets a yearly provisioning rate. The Code on Social Security sets the payout on exit at 15 days' wages for each year of service, worked out as monthly wages × 15 ÷ 26, up to ₹20 lakh. Spreading that evenly gives about 4.81% of wages a year, which this calculator uses as an estimate. The Ministry of Labour says establishments may make provision as per accounting norms.

When does an employer pay ESI?

The employer pays 3.25% of gross wages for employees whose wages are up to ₹21,000 a month, on top of the employee's own 0.75%. Above that ceiling neither share is due. An employee covered at the start of an ESI contribution period, April to September or October to March, stays covered until the period ends even after a pay rise.

Sources

  1. EPFOFAQs on enhancement of EPF wage ceiling to ₹25,000 (September 2026) · retrieved 2026-10-20
  2. Ministry of Labour and EmploymentCabinet approves higher EPFO wage ceiling of ₹25,000 (PIB, 16 September 2026) · retrieved 2026-11-06
  3. EPFOPresent rates of contribution (EDLI and administrative charges) · retrieved 2026-11-06
  4. ESICESIC contribution rates · retrieved 2026-10-20
  5. Ministry of Labour and EmploymentCode on Social Security, 2020 (section 53: gratuity) · retrieved 2026-10-20
  6. Ministry of Labour and EmploymentFAQs on the Labour Codes (30 December 2025) · retrieved 2026-10-20
  7. Gazette of IndiaCode on Wages, 2019 (section 2(y): wages; section 26: bonus) · retrieved 2026-11-06
  8. Maharashtra Government GazetteMaharashtra Labour Welfare Fund (Amendment) Bill, 2024: section 6BB(2) · retrieved 2026-10-25

Written by Last verified

How every figure is checked: methodology.