Employee Total Cost Calculator
The cost of an employee goes well beyond their CTC. Employers pay Provident Fund (12%), provide for gratuity (4.81%), may contribute to ESIC, and bear recruitment, training, equipment, and office overhead costs. The true cost of a ₹10L CTC employee is often ₹12–15L. This calculator reveals the real number.
Frequently Asked Questions
What is included in employer PF contribution?+
Employers contribute 12% of basic salary (capped at ₹1,800 for employees earning above ₹15,000 basic). The 12% goes as: 3.67% to EPF and 8.33% to EPS (Employee Pension Scheme, capped at ₹1,250/month). This is in addition to the employee's own 12% contribution already included in the CTC.
What is the gratuity provision and when is it paid?+
Gratuity is payable after 5 continuous years of employment. Formula: (Basic + DA) × 15/26 × years of service. The annual provision is approximately 4.81% of basic salary. Companies book this monthly as an expense. If the employee leaves before 5 years, no gratuity is paid (in most cases).
When does ESIC apply?+
ESIC (Employee State Insurance Corporation) applies when an employee's gross monthly salary is ₹21,000 or less. Employer contributes 3.25% of gross salary; employee contributes 0.75%. ESIC provides medical, sickness, maternity, and disability benefits. Above ₹21,000, employers typically offer group health insurance instead.
Why does the true cost of hiring matter?+
Underestimating employee cost is the #1 hiring mistake for small businesses and startups. A ₹10L CTC employee costs ₹13–16L all-in when you include PF, gratuity, insurance, equipment, and overhead. Factor this before making hiring decisions. Also: the cost of attrition (rehiring, retraining) is typically 50–200% of annual salary.