Wages, statutory costs and a service charge
Your cost is built from three pieces — basic wages, the statutory costs that attach to them, and a service charge for supervision, reporting and the operating layer. This page explains how the build-up works and how changes flow through to billing.
Three layers, one monthly cost
Each layer behaves differently, so it helps to see them separately before combining them.
1. Basic wages
The wage agreed for the role and site — the starting point of the calculation. It varies by role, shift and state.
2. Statutory costs
Employer contributions that the law requires on those wages — PF, ESI, gratuity, bonus and professional tax. These vary by state and by wage level.
3. Service charge
Our fee for supervision, reporting, governance and the operating layer. It is quoted per contract and does not change with the statutory build-up.
Labour cost = basic wages + statutory costs. The full monthly cost = labour cost + service charge.
Figures are for a 26-day month and a 9-hour day — 8 hours of work plus a 1-hour break.
The statutory components
These are the employer contributions that attach to wages. The same set drives the calculator; the figures here are indicative and dated, and the final amounts are confirmed in your contract.
Statutory bonus accrual
Payment of Bonus Act, 1965
Minimum 8.33% of wages under the Payment of Bonus Act, computed on the wage up to the ₹7,000 calculation ceiling (subject to eligibility).
Employer PF (EPF)
Employees' Provident Funds and Miscellaneous Provisions Act, 1952
12% of basic wages, capped at the ₹15,000 statutory wage ceiling (PF is contributed on the ceiling wage for wages above it).
Employer ESI
Employees' State Insurance Act, 1948
3.25% of wages, applicable only while monthly wages are within the ESI wage ceiling (₹21,000). Computed on the entered wage as a proxy for gross wages; ESI is not applied above the ceiling.
Gratuity accrual
Payment of Gratuity Act, 1972
15 days' wages per completed year of service, accrued at 4.81% of basic wages.
Labour Welfare Fund
State Labour Welfare Fund Act
State-specific. ₹20 shown as an indicative monthly figure; the contribution and applicability vary by state (some states levy it annually), and some states do not levy it.
Professional Tax
State Professional Tax Act
Applicable only in the specific states that levy professional tax. ₹200 shown as an indicative monthly figure for a representative metro; the amount and slab vary by state, and it does not apply in states that do not levy it.
An example build-up
Illustrated on a ₹15,000 monthly basic wage, using the dated figures above.
Statutory cost: ₹3,812 on top of ₹15,000 wages.
Labour cost: ₹18,812 per month before the service charge.
How changes flow to billing
The build-up is transparent, so a change moves through the model rather than surfacing as an unexplained line.
- Headcount or shift changes change the number of wage lines, not the statutory treatment or the service charge.
- Statutory changes (a new notification, a state threshold) are applied to the affected wage base and appear as a dated adjustment.
- Scope changes are confirmed in writing and flow through to billing transparently — you see what changed, not a surprise total.
Where the wage figures in your quote come from
Minimum wages are fixed by the applicable government under the Minimum Wages Act, 1948. When you ask for a quote, we look up the latest notification that applies to your sites and map your requirements to those rules — so the number we send you is the one the state (or central) government has actually announced.
State government
Minimum wages for scheduled employments in the state sphere are fixed and revised by the state government. For most private-sector sites, including security and staffing roles, the minimum wage that applies is the one the state has most recently notified for that state, employment and skill category.
Central government
The central government fixes minimum wages for scheduled employments in the central sphere — establishments carried on by or under the central government, railways, mines, oilfields, major ports, and corporations established by a central act. Where a site falls under the central sphere, the central minimum wage applies and we use that.
When you request a quote, we:
- Read the latest minimum-wage notification for the state and skill category (unskilled, semi-skilled, skilled, highly skilled) that your roles fall under.
- Identify the applicable government — the state government for most private-sector sites, or the central government where a site falls in the central sphere (e.g. a central-government or railway establishment, mine, oilfield or major port).
- Map your requirements — roles, skills, shifts and locations — to those rules.
- Apply the statutory build-up (PF, ESI, gratuity, bonus, professional tax) and our service contribution.
- Send you the final quote on that basis.
You can verify the figures yourself on the Government of India sources below. In the state sphere, the relevant figure is the one your state's labour department has most recently notified for your employment and skill category.
Ministry of Labour & Employment (Government of India)
Administers the Minimum Wages Act, 1948 and publishes central minimum-wage notifications.
Labour Bureau — Wages
Collects and publishes minimum-wage statistics under the Act, compiled from state and central returns.
Chief Labour Commissioner (Central) — Minimum Wages
Central minimum-wage and Variable Dearness Allowance (VDA) orders, revised on 1 April and 1 October.
Shram Suvidha Portal — Know Minimum Wage (Central Sphere)
Search central minimum wages by city, skill category and scheduled employment.
Where these figures come from
The calculator and this page share one source, so they cannot disagree.
Source: EPF & MP Act 1952 (EPFO notifications); ESI Act 1948 (ESIC notification); Payment of Gratuity Act 1972; Payment of Bonus Act 1965; state Professional Tax Acts.
Effective date: 2026-04-01
Indicative national statutory defaults. Exact figures vary by state, wage structure and the latest notifications; the final amounts are confirmed in your contract.
Send the requirement
Share the roles, sites and shifts in scope, and we will confirm the exact build-up and service charge for your contract.
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