India salary calculator 2026

For most salaried people in India, the biggest deduction on the payslip is not income tax. It is the provident fund. The new tax regime has a wide zero band and a standard deduction, so a large share of employees pay little or no income tax, while 12% of gross goes into the Employees' Provident Fund every month regardless of income. That inverts the picture most European readers expect.

The new regime: seven slabs and a standard deduction

Our model uses the new tax regime, which is the default for salaried employees. Income tax is charged in annual slabs: nothing on the first 400,000 rupees, 5% up to 800,000, 10% up to 1,200,000, 15% up to 1,600,000, 20% up to 2,000,000, 25% up to 2,400,000, and 30% on everything above that. Before the slabs are applied, a standard deduction of 75,000 rupees a year is taken off salary income.

The model does not apply the Section 87A rebate, a tax credit that wipes out the bill for people whose income stays under a set limit and is the reason many middle-income earners in India pay no income tax in practice. Where the rebate applies, the calculator shows a small amount of tax that a real payslip would not, which is one reason India is marked as an estimate in our dataset.

The provident fund: 12% that does not reduce your tax

The one employee contribution in the model is the Employees' Provident Fund at 12% of gross. It is a retirement savings scheme rather than a tax: the money sits in an account in the employee's name and is paid out at retirement. In our model the 12% is calculated on the full salary and does not reduce the income tax base, so income tax and the fund contribution are worked out independently and then both subtracted from gross. Real employers often calculate the fund on basic pay rather than the whole package, so the real contribution can be smaller than 12% of the headline salary. The guide to social contributions explains why forced saving still counts as a deduction.

What the numbers look like

At the 46,861 rupee average wage the income tax is a few hundred rupees a month and the provident fund is fifteen times larger. Only at 125,000 rupees a month does income tax come close to the fund contribution, and even then the effective rate of everything deducted is just over 18%. India has no single national minimum wage; floors are set by state governments and by type of work, which is why the table starts at a round amount rather than a statutory minimum.

What the employer adds

The employer matches the provident fund contribution at 12%, so an employee on the average wage costs 52,484 rupees a month against a gross of 46,861. Part of the employer's share goes to the Employees' Pension Scheme rather than the individual account. Compared with Europe the employer's load is light: a 12% mark-up on gross rather than the much larger social charges that are normal on the continent.

GST rather than VAT

India replaced its patchwork of state and central sales taxes with a Goods and Services Tax. The model uses an 18% standard rate, which is the slab most services and manufactured goods fall into, with reduced rates of 12% and 5% for a long list of essentials and mass-consumption items. For a consumer the arithmetic is the same as any VAT: a 100 rupee price becomes 118 with tax. The GST calculator works forwards and backwards on any of the three rates.

Working time and public holidays

The standard working week in the model is 48 hours over six 8-hour days, with 48 hours also the statutory maximum. A five-day week is common in offices, but six days is still the legal baseline. The model carries the five national holidays: New Year's Day, Republic Day on 26 January, Independence Day on 15 August, Gandhi Jayanti on 2 October and Christmas Day. In 2026 Independence Day falls on a Saturday, so four of the five land on a weekday and the year has 257 working days. Real Indian calendars are busier: each state adds its own list, and festivals such as Diwali, Holi and Eid move with the lunar calendars and are not in the model, so the working days calculator counts more working days than a real office keeps.

Where the model is exact and where it is not

The slabs, the standard deduction and the 12% provident fund rate are the statutory new-regime figures, and for a salaried employee above the rebate limit with no other deductions the result should be close. Four things push a real payslip away from the model: the Section 87A rebate for lower incomes, the provident fund being calculated on basic pay rather than gross, the professional tax levied by some states, and the surcharge and cess added to the income tax bill at higher incomes. The first two make the calculator pessimistic, the last two optimistic; none is included. Treat the figures as a planning estimate, and compare them with Pakistan or Bangladesh.