How much does HR software cost in India?
Reviewed by Mellow Editorial Team, HR & payroll content team
HR software in India typically costs between ₹3,000 and ₹30,000 per month for small to mid-sized businesses, though the range is wide depending on headcount, modules, and deployment model. The most useful way to evaluate cost is not the sticker price but the per-employee-per-month (PEPM) rate alongside what that rate actually includes.
What drives the price difference
Three factors move the number more than anything else:
Headcount. Most vendors price on a PEPM basis. A 20-person team paying ₹500 PEPM pays ₹10,000 a month. At 200 employees the same rate becomes ₹1,00,000. Some vendors offer a flat monthly fee for small teams, which can be better value below a certain threshold.
Modules included. Core HR (employee records, leave, attendance) is cheaper than a full suite. Add payroll processing, compliance management, performance reviews, recruitment, or expense management and the price climbs. Many platforms sell a base plan and charge extra for each add-on module.
Deployment model. SaaS (cloud-based, subscription) is now the default for most Indian businesses and has predictable monthly costs. On-premise software requires an upfront licence fee — sometimes several lakhs — plus implementation, hardware, and ongoing maintenance costs. For most employers with fewer than 500 staff, SaaS is cheaper in total cost of ownership.
Typical price tiers in the Indian market
These are approximate market ranges for 2026, based on publicly available pricing from common vendor categories:
Basic or starter plans: ₹50–150 PEPM. Usually covers attendance tracking, leave management, and basic employee records. Limited payroll capability or none. Suitable for companies that manage payroll manually or through an accountant.
Mid-range plans: ₹150–400 PEPM. Includes payroll processing, statutory compliance (EPF at 12% employee and employer contributions, ESI deductions, TDS, Form 24Q filing), and some HR workflow automation. This is where most growing SMEs land.
Full-suite plans: ₹400–900+ PEPM. Includes all of the above plus performance management, recruitment (ATS), learning modules, and dedicated support. Some enterprise vendors charge significantly more and price through annual contracts.
Minimum monthly fees. Watch for floors. A vendor charging ₹300 PEPM but with a ₹5,000 minimum is effectively ₹5,000 a month for teams below 17 people. Always check the minimum before comparing rates.
What Indian compliance requirements mean for your software budget
India's statutory payroll obligations are not optional, and software that handles them properly costs more than software that doesn't. For the 2026/27 tax year, a compliant payroll system needs to handle:
- EPF contributions (12% each from employee and employer) and ECR filing
- ESI deductions and returns for eligible employees
- TDS calculation under the new income tax regime, including the section 87A rebate and 4% health and education cess
- Quarterly Form 24Q filing and annual Form 16 generation for employees
- Gratuity provisioning for employees with five or more years of service
- Compliance with India's four consolidated Labour Codes, which have been in force since 2025
A cheap tool that skips these or handles them inaccurately creates more cost downstream — in penalties, manual corrections, and accountant fees. When comparing prices, verify specifically which of these filings the software automates end-to-end versus which ones you still do manually.
Hidden costs to check before signing
The advertised PEPM rarely tells the full story. Ask vendors directly about:
Implementation and onboarding fees. Some charge a one-time setup fee of ₹10,000–₹50,000. Others include it. For complex payroll migration, this can be significant.
Data migration. Moving historical payroll data, employee records, and leave balances from a previous system or spreadsheets often involves either a paid service or significant internal time.
Support tiers. Email support may be included; phone or dedicated account management often is not. Check what happens if a payroll run fails on a Friday evening.
Annual contracts vs. monthly billing. Annual contracts typically offer a 15–20% discount but lock you in. If you are evaluating for the first time, a monthly plan gives flexibility even at a higher rate.
Per-payslip or per-transaction pricing. A small number of vendors, particularly those targeting very small businesses, charge per payslip rather than a flat monthly fee. At low headcount this can be cheap; it scales poorly.
How to size your actual budget
A reasonable working budget for a 50-person company that needs full statutory payroll compliance, leave and attendance management, and basic HR workflows is ₹15,000–₹25,000 per month on a SaaS platform. Larger companies with 200–500 employees typically pay ₹40,000–₹1,20,000 per month depending on the suite. If you are managing payroll across states or handling a mix of full-time employees and contractual workers, budget toward the higher end and confirm multi-state compliance capability explicitly with the vendor.
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