Global coverage
Available in +150 countries
Employer costs, taxes, minimum wage and leave rules for hiring here, plus the faster route: hire a contractor with Ontop, no local entity needed.
2026
Currency
INR Rs (Indian Rupee)
Employer contributions
~13% (PF 12% + ESIC 3.25% on salary up to INR 21,000)
Minimum wage
INR 178/day (unchanged since 2019) ≈ $48/month
Payment frequency
Monthly
April 1 - March 31 (fiscal year)
Capital
New Delhi
Timezone
IST (GMT+5:30)
Short answer: The minimum wage in India in 2026 is INR 178 a day, unchanged since 2019 (about INR 4,628 a month, or $48). A typical full-time salary is around INR 65,000 a month ($677). Professionals paid as contractors through Ontop earn a median of $1,782 a month (69 active contracts, September 2026).
| 2026 figure | Local currency | USD |
|---|---|---|
| Minimum wage, monthly | INR 4,628 | $48 |
| Minimum wage, hourly | INR 22.25 | $0.23 |
| Average salary, monthly (approx.) | INR 65,000 | $677 |
| Median contractor pay through Ontop, monthly | n/a | $1,782 |
Minimum wage details: National Floor Level Minimum Wage Rs 178/day (set 2019-07, non-binding advisory). Under Code on Wages 2019 a binding floor is not yet notified per secondary sources; Central Advisory Board reportedly constituted 2026-07-21. States set own scheduled rates by skill/zone/industry, well above 178 (e.g. Delhi, Maharashtra, Karnataka); central sphere rates also differ. Not verified against labour.gov.in directly.. USD figures use exchange rates from 1 October 2026. Updated October 2026.
Next step: compare contractor rates in India with other countries or estimate the full cost of an employee.
India runs on its own calendar. The tax year goes from April 1 to March 31, the statutory bonus is paid after it closes, and provident fund and state insurance filings are due by the 15th of every month. A foreign company that employs here takes on all of it, plus labor rules that change from state to state.
The bigger costs are not in the monthly payslip. They sit in obligations that build over the years: a mandatory bonus and gratuity once someone has stayed five years.
On an INR 100,000 monthly salary, employer contributions add about INR 13,000, for roughly INR 113,000 a month. On top of that:
Independent professionals in India work under a consultancy agreement, invoice for their services and manage their own tax. Companies paying contractors in India through Ontop pay a median of $1,782 a month (the middle half earn between $900 and $2,830), across 69 active contracts in September 2026. That is Ontop's own book, not a market survey, and the median sits well above India's average salary, a sign of the senior engineering and product talent companies hire here. Run your own numbers in the contractor cost by country calculator.
Ontop acts as contractor of record: a compliant consultancy contract (yours or an Ontop template), classification support, and payment from one platform, with no Indian entity and no EPFO or ESIC registration. Your contractor gets paid into the Ontop Global Account in USD. Pricing starts at $49 per contractor per month.
A consultancy agreement only holds if the relationship looks like one. If the person works fixed hours for you alone, reports to a manager who directs the work, and has no other clients, the arrangement looks like employment, with the PF, bonus and gratuity obligations that come with it. Hire an employee in that case. Ontop does not offer employer of record and never becomes the legal employer. For work scoped by deliverables, see how an EOR alternative for contractors fits.
Employee or contractor
If the work is project-based or you need to move fast, a contractor gets you the same talent with a fraction of the paperwork.
Employee
~INR 113,000 total
/month
For a gross salary of
INR 100,000 gross/month
Setup
Local entity or employer of record, plus tax and social security registration
Employer contributions
~13% (PF 12% + ESIC 3.25% on salary up to INR 21,000)
Mandatory extras
Annual Bonus (Statutory Bonus)
Monthly admin
Monthly payroll - EPFO ECR by 15th - ESIC by 15th - TDS - Form 16 by June 15
Contractor with Ontop
No local entity
$49
/contractor/month
The agreed rate, plus Ontop from $49 per contractor per month.
Sign a contract, yours or an Ontop template. No local registration on your side.
No employer contributions: the contractor handles their own taxes and social security.
One payment per invoice, in one payroll run.
Paid into their Ontop Global Account in USD.
See the full side-by-side comparison
+
A contractor's rate usually covers their own taxes, so compare total cost, not just gross pay. Run your numbers in the contractor vs employee calculator.
Hiring here: the full breakdown
+
Payroll guide
Employer costs come on top of gross pay. Use these figures to budget a hire and to compare it with a contractor rate.
Total monthly cost
~INR 113,000 total
Example gross salary
INR 100,000 gross/month
~INR 72,000 net
Net pay to the employee
Tax and employee contributions
Withheld from gross pay
~INR 13,000 employer PF+ESIC
Employer contributions on that salary
Employer contributions
~13% (PF 12% + ESIC 3.25% on salary up to INR 21,000)
Employee contributions
12% PF employee + 0.75% ESIC + income tax
Total cost above gross
~13% above gross (PF + ESIC)
Figures are estimates for planning. Rates change with each budget and can vary by sector, so confirm them before you make an offer.
What people earn here, from the legal floor to the main cities, plus the extra pay most employers budget for.
National average
~INR 65,000
Per month
Mumbai
INR 80,000 - 300,000
~50%
Bangalore
INR 70,000 - 250,000
~40%
Monthly gross. National average salary per year:
~INR 780,000
Minimum wage
INR 178/day (unchanged since 2019) ≈ $48/month
Paid:
Daily
Extra pay
Annual Bonus (Statutory Bonus)
Mandatory under Payment of Bonus Act: 8.33% to 20% of salary
September-November (post-fiscal year)
Collective agreements can set sector minimums above the national one. Check whether one applies to the role before you set the salary. Next step: estimate the full cost of an employee.
Who collects what, how often, and what happens when a payment is late.
Income tax brackets
0% up to INR 300,000 / 5% / 20% / 30% (+ surcharge and cess)
Tax year:
April 1 - March 31 (fiscal year)
Filing calendar
Monthly PF by 15th; ESIC by 15th
Social security payments
July 31 (ITR filing)
Income tax
By June 15
Employee tax certificate
Form 16 (TDS Certificate)
July 31
Annual return
Income Tax Return (ITR)
Late payment penalties
Late PF: 12% annual interest + 5-25% damages; late ESIC: 12% annual interest
Who collects what
Income Tax Department (ITD)
TDS and income tax
EPFO
Employees Provident Fund
ESIC
Employees State Insurance
The time off and paid leave every employee is entitled to by law. Budget for it when you compare an employee with a contractor.
Annual leave
Earned Leave / Privilege Leave
12 working days/year (varies by state Shops Act)
Public holidays
~14 central public holidays + state holidays
Sick leave
Sick Leave
Employer provides 7-12 sick days/year; ESIC pays cash benefit for long illness
Maternity leave
26 weeks (for establishments with 10+ employees)
100% from ESIC (registered establishments) or employer
The contracts you can use, and what ending an employment relationship costs.
Permanent
Appointment Letter / Permanent Contract
Fixed term
Fixed-Term Contract (under Industrial Employment Act)
Independent contractor
Consultancy Agreement / Freelance
Collective agreements
Standing Orders / Certified Standing Orders
Ending employment
Gratuity
How it is calculated
15 days salary per year of service (after 5 years); capped at INR 2,000,000
Calling someone a contractor does not make them one. If the role works like employment in practice, local authorities can reclassify it, with back contributions and penalties.
The errors that most often trigger back payments and penalties here, and what to do instead.
PF Contribution Base Suppression
Risk Level: HIGH
PF is calculated on basic salary + DA. Many employers keep basic salary artificially low (30-40% of CTC) to minimize PF liability. The Supreme Court (Surya Roshni case 2022) and EPFO circulars now challenge structures where allowances are uniform and non-variable. EPFO can demand PF on total emoluments.
Contractor Labour (Regulation & Abolition) Act Non-Compliance
Risk Level: HIGH
Engaging contract labour through a third-party contractor requires the principal employer to register under CLRA if contractor headcount exceeds 20. The principal employer is jointly liable for PF, ESIC, and minimum wage if the contractor defaults.
1 of 6
Next topicOntop is the Global Workforce Engine for contractor teams: contracts, compliance documents and payments in 150+ countries.
150+
countries
$49
per contractor per month
1 run
to pay your whole team
USD
Global Account for every contractor
FAQ
+
Ontop works with contractors, not employees. As Contractor of Record, Ontop handles contracts, compliance documents and payments for contractors in 150+ countries. To employ someone, you need a local entity or an employer of record. Ontop doesn't act as your employer of record.
+
Employers pay contributions on top of gross salary. The cost table on this page shows the rates that apply here and a worked monthly example. A contractor with Ontop costs the agreed rate plus Ontop from $49 per contractor per month.
+
Many countries require an extra month or an annual bonus for employees. The salaries section on this page shows the one that applies here and when it is usually paid. Contractors are paid what you agree in the contract.
+
Employers withhold income tax and the employee's social security share every pay run, then pay them to the local authorities. The taxes section on this page lists the brackets, rates and filing deadlines that apply here.
+
Yes. The contractor vs employee calculator compares the full cost of an employee, employer contributions included, with a contractor rate plus Ontop's monthly fee.
+
When the work is project-based, you need to start fast or you don't have a local entity. If the person will work fixed hours, under your direction and only for you, local law may treat them as an employee, so hire them as one.
+
Misclassifying employees as contractors, missing tax and social security deadlines, and ignoring collective agreements that set higher wage floors. The mistakes section on this page covers the ones that come up most often here.
Compare employer costs, taxes and contractor rules in nearby countries:
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.