How the India calculator works

On top of the agreed wage, an employer typically pays Provident Fund (12% of PF wages plus about 1% EDLI and administration charges), ESI (3.25% for covered employees earning up to ₹21,000/month), a gratuity accrual of roughly 4.81%, and a statutory bonus provision for eligible workers. For lower-paid workers the statutory additions alone commonly add 15-25% above the wage, before site costs like PPE, transport, or accommodation.

The employer contributes 12% of PF wages (8.33% of it goes to the Employees' Pension Scheme, capped at the ₹15,000/month wage ceiling), plus 0.5% EDLI insurance and 0.5% administration charges (minimum ₹75/month). In the standard mode PF wages are capped at ₹15,000/month; contributing on actual wages is possible by option. The employee's own 12% is deducted from wages and is not an employer cost.

ESI covers employees whose ordinary wages are up to ₹21,000 per month (₹25,000 for persons with disability). The employer pays 3.25% of wages and the employee 0.75%. Coverage is tested without overtime, but once covered, contributions are payable on wages including overtime. Above the ceiling, contributions stop.

No. Gratuity is a lump sum payable to the worker at exit — fifteen days' wages per completed year of service (monthly wage ÷ 26 × 15). Prudent employers reserve about 4.81% of wages each month as an accrual so the liability is funded when it falls due. Fixed-term employees can qualify after one year under the labour codes.

Employees earning up to ₹21,000 per month who have worked at least 30 days in the year are entitled to an annual bonus between 8.33% and 20%, calculated on wages capped at ₹7,000/month or the applicable minimum wage, whichever is higher. Above the eligibility ceiling the statutory bonus does not apply, though many employers pay a discretionary bonus.

No. The Building and Other Construction Workers welfare cess is 1% of the total cost of construction — including materials — for covered works. It is a project-level statutory obligation, not a percentage of wages, which is why this calculator reports it separately in construction project mode instead of adding it to worker labour burden.

CTC is a compensation framing: it usually bundles the employer's PF and gratuity into the offer figure. This calculator answers the employer's budgeting question instead — what a worker actually costs per day, month, and year — including items CTC usually omits, such as employer ESI, the statutory bonus provision, PF administration charges, and site costs, while keeping employee deductions strictly separate.