What does a year of hiring actually cost?

A company sets out twelve roles for the year, adds up the salaries, compares the total against the runway and decides the plan works. Nine months later the cash is tighter than anyone expected and nobody can point to what went wrong.

Three things went wrong, and all of them are arithmetic rather than judgement. The salaries were not the cost. The recruiter fees were never in the plan. And a role starting in month ten costs three months this year and twelve next year, which is the part almost nobody calculates.

This template does all three from one list of roles. It is the multi-role version of the hiring cost calculator on this site, which works through a single hire in detail.

Rates

Every statutory rate and threshold in one place: employer PF, the EDLI premium and its cap, PF administrative charges, the PF wage ceiling, ESIC and its gross threshold, gratuity accrual, and the wage share the labour codes require. Change one here and the whole plan updates.

Plan

One row per role: title, function, the month they join, annual cost to company, other monthly costs and the one-time cost of hiring them. It returns the fully loaded monthly cost of each, with every statutory component shown separately rather than rolled into a percentage.

Monthly

Headcount, joiners, gross salaries, employer statutory cost, insurance and equipment, and the one-time hiring cost, for each month of an April to March year, with a cumulative row.

Cash

Opening cash, collections, people cost, everything else, and the closing balance for each month, with months of runway left at the end of each one.

Shaded cells are yours. Everything else is a formula. Twelve invented roles arrive in the file so you can see the shape before clearing them.

The four consolidated labour codes came into force on 21 November 2025. The change that matters here is the definition of wages: the excluded allowances cannot exceed half of total remuneration, so the wage base used for provident fund and gratuity must be at least 50% of what you pay.

A very common Indian salary structure kept basic pay at 30% or 35% of the total, with the rest in allowances, which reduced employer contributions. That structure no longer works, and companies that used it face a higher contribution base for the same cost to company.

The template defaults the wage share to 50% for this reason. If your structure sets it higher, change it on the Rates sheet and every role recalculates. The position for your own company is worth confirming with your CA before you rely on the output.

The Cash sheet ends with four lines, and the last one is the reason the file exists.

A plan is affordable this year partly because people join during it. Everyone who starts in month ten costs three months of this year's budget and twelve months of next year's. In the example that difference is ₹58 lakh, arriving before anyone has approved a new role or an increment.

The start month in the plan is when someone joins and starts costing money. It is not when you start looking, and the gap between the two is longer than most plans allow for.

• ·Finding the person: commonly 30 to 45 days for finance and senior roles, and longer for anything specialised.
• ·Notice period: one to three months in most Indian companies, and three is normal at senior level.
• ·So a role needed in April should be started in January, and a role you begin recruiting for in January is a June joiner more often than a March one.

Two consequences. Plans built around when a role is needed are consistently three months optimistic, which flatters this year's cost and understates next year's. And a slipped hire is not free: the work does not happen, which is a cost that never appears in any of these sheets.

The way to use the Monthly sheet properly is to run it twice, once with your intended start months and once with everything three months later, and see whether both versions are affordable.

1. 01List the roles you believe you need, without filtering yet. It is easier to cut from a full list than to argue one in.
2. 02Put a realistic start month against each, working backwards from when the work has to happen.
3. 03Check the Rates sheet against what your CA confirms, particularly the wage share and whether you contribute on actual wages or on the ceiling.
4. 04Look at the Cash sheet and find the lowest cash point, not the closing balance. That is the month the plan is actually tested.
5. 05Then look at the step up into next year, and decide whether the plan survives that.
6. 06Cut or delay from the bottom of the list, and rerun. Delaying two roles by a quarter frequently does more for the cash position than cutting one altogether.

It is worth doing this before the annual operating plan is signed off rather than after, because the people cost is usually the largest single line in it and the one most often built on salaries alone.

A plan is only useful if the actuals can be compared against it, and that needs the two to be built the same way.

• ·Gross salaries, employer PF, ESIC and gratuity accrual are four separate lines in the chart of accounts, not one employee cost line. Combining them makes a variance impossible to explain.
• ·Recruitment fees belong with people cost rather than in general overheads, because they are a cost of the hiring decision and they distort a month badly when they land.
• ·Insurance and equipment are per person and scale with headcount, so they belong next to salaries rather than in office costs.
• ·Delivery people in a services business belong in cost of sales, not overheads, which the project profitability tracker on this site depends on.

If your chart of accounts does not already split these out, the free chart of accounts on this site does, and the two files are designed to line up so plan against actual is a subtraction rather than a reconciliation exercise.

• ·It is not payroll, and it is not a substitute for your CA on what applies to your company. Rates and thresholds change, and which apply depends on headcount and on the states your employees sit in.
• ·Professional tax is not in it. It is a state levy deducted from the employee rather than paid by the employer, though registration is still an employer obligation where it applies.
• ·It assumes nobody leaves. Attrition reduces cost and adds replacement hiring, and modelling it properly needs assumptions most early-stage companies cannot support.
• ·It holds salaries flat. Increments, promotions and any annual revision are a separate line that belongs in the operating plan.
• ·It says nothing about whether a role pays for itself. That is a different question, and the hiring cost calculator works through one hire against runway.
• ·It does not model notice pay, leave encashment or gratuity paid out on exit, which matter if a plan is ever reversed.

What it does is give you the real cost of a real plan, phased properly, with the statutory arithmetic in one place you can check. For most companies that is the difference between a hiring plan and a list of roles.