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13th month pay
in India.

SALARY PAYMENT IN Indian Rupee (INR)

CONTRACT LANGUAGES Hindi / English

PAYROLL TAX 16.75%

PAYROLL CYCLE Monthly

TIME TO HIRE 12 hours

Is there a 13th month pay in India?

There is no mandatory requirement for employers to pay a 13th month salary payment to employees.

How is the 13th month pay calculated in India?

This bonus structure is calculated at a rate of between 8.33% to 20% of an employee’s basic salary, given that the employee has a salary of less than 21,000 INR per month. If an employee makes more than this or a company has less than 20 employees, a bonus system is at the employers discretion. 

When is the 13th month salary paid in India?

If a 13th month salary payment is given by an employer, it is generally paid at the end of the financial year. If the statutory bonus applies to a given company, this can allocated monthly or as one lump sum around the festival season in October or November. 

Does the 13th month salary amount to any extra payment by the employer?

The extra bonus payment is considered an added cost to employer (CTC).

Is the 13th month salary taxable in India?

Any added bonus payments declared by an employer is taxable as part of an employee’s standard income.

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Your business can easily hire employees in India without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.

FAQs

There is no mandated obligation of a 13th month salary payment in India.

No, the standard salary arrangement in India includes only a basic 12 month salary structure. It is possible for an Indian employee to negotiate extra benefits which may include a 13th month salary bonus.

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