Manpower costing and billing: how contractors price and bill staff

What is the difference between costing and billing?

Costing happens once per contract, before you sign, and again when wages change. It answers one question: what must the client pay per post so that every legal cost is covered and you still earn a margin? Billing happens every month. It answers a different question: how many staff-days did we actually supply at each site, and what do they come to at the agreed rate?

Most money is lost in the gap between the two. A rate that looks fine on paper fails when a wage revision arrives and the contract has no revision clause. A good rate earns nothing when the monthly bill misses staff-days, forgets agreed overtime, or is disputed because the attendance behind it cannot be shown.

How do you calculate the rate per post?

Start with the minimum wage your state notifies for the category of work, the skill level and the zone of the site, split into basic and VDA. On a post that must be covered all seven days, add a reliever at one sixth of wages, because each person gets a weekly off and someone else has to cover that day. Then add the employer's statutory costs on wages plus reliever: provident fund (tender sheets usually show about 13%), ESI at 3.25% for staff earning up to ₹21,000 a month, and bonus at the 8.33% minimum. Add uniform and other monthly costs, then your service charge on that subtotal.

For a ₹18,000 wage with a reliever, ₹500 uniform and a 10% service charge, the rate comes to ₹29,327.98 per post per month before GST. Because a 7-day post is manned every day, it covers 26 × 7/6 staff-days, so the matching rate is about ₹966.86 per staff-day. The full guide walks through every line, with the mistakes that cost agencies money.

Read the full guide: how to calculate manpower rate per post →

Is there a calculator that does the costing for you?

Yes. The free manpower rate calculator takes basic + VDA (per month or per day), the working days, the reliever switch, PF, ESI, bonus, uniform, your service charge, GST and the number of posts. It returns the full per-post breakdown, the rate per staff-day and the monthly total with GST for the whole contract. It drops ESI automatically when the monthly wage is above ₹21,000 and shows every line with the arithmetic behind it, so you can check it against a client's own sheet.

It runs on the server, so it works on any phone without an app, and the result can be printed, downloaded as Excel or shared on WhatsApp. Every default is editable and dated; check the statutory rates with your CA before you quote.

Open the free manpower rate calculator →

Can you do the same costing in Excel?

The free manpower costing sheet puts the same calculation into live Excel formulas: yellow input cells for wage, VDA, working days, reliever, PF, ESI, the ESI wage limit, bonus, uniform, service charge, GST and posts, and every cost line below them recalculating as you type. It uses the same order and the same rounding as the online calculator, so a quote from the sheet and from the calculator agree to the paisa.

Many agencies keep one copy per client, so that when the state revises the VDA they change two cells and send the client the new rate the same day. You can add rows for extras such as a supervisor share or equipment; just add them into the subtotal.

Download the manpower costing sheet →

How do you quote for a security or manpower tender?

A tender is costing under stricter rules. The buyer usually fixes the format of the price bid and often the statutory lines too, and asks you to quote only your service charge or a total rate. The work is in reading the tender documents line by line: the category and zone of wages it expects, the number of working days, whether a reliever is included, how overtime and holidays are treated, and the payment terms.

The biggest risk is quoting a margin so thin that one wage revision or a late payment turns the contract into a loss. The full guide covers how to read a bid format, build your own check sheet beside it, price the costs the bid does not show, and decide when to walk away.

Read the full guide: how to quote for a security or manpower tender →

How do you bill a client for manpower each month?

Close the month's attendance site by site. Count staff-days for each category and shift (a half-day is 0.5), multiply by the agreed rate per staff-day, and add overtime only if the contract bills it, at the agreed hourly rate. Then work out GST on the taxable value: CGST and SGST if the client is in your state, IGST if not.

Attach a staff-day summary and, where the contract asks for it, the signed attendance sheet. A bill that matches the client's own record of who was on duty is rarely questioned, and gets paid faster. The full guide includes a worked example with three categories of staff and the reverse charge rules for security services.

Read the full guide: how to bill a client for manpower →

Is there a quick way to check a monthly bill?

The free site billing calculator takes staff-days, the rate per staff-day, overtime hours and the overtime rate, and the GST percentage, and returns the taxable value, the GST and the bill total, with every step shown. It accepts half staff-days, so a month with half-days adds up correctly.

Use it to sanity-check an invoice before it goes out, or to answer a client who asks what a change in deployment would cost. If the client pays a monthly rate per post, the calculator's FAQ explains how to turn that into a rate per staff-day without overstating it.

Open the free site billing calculator →

What should a manpower bill look like?

The free manpower bill format is an Excel tax invoice laid out for staff supply: your agency's name, GSTIN and PSARA licence number, the client and site, the billing period, and one line per category or shift with staff, days, staff-days, rate and amount. An overtime line, the taxable value, CGST and SGST or IGST (switched by one Yes/No cell), the total and a reverse charge Yes/No complete it.

Fill your details once and save the file as a master; each month you only change the invoice number, period and staff-days. Confirm the SAC code and the reverse charge wording with your CA.

Download the manpower bill format →

How does GST work on manpower and security services?

Manpower supply and security services sit under the support services heading (9985) and are taxed at 18%. The rate changes from 22 September 2025 did not list this heading. The important twist is reverse charge: since 1 January 2019, security services supplied by anyone other than a body corporate to a registered person are taxed under reverse charge, so the client pays the GST to the government instead of you, with some exceptions.

That changes your invoice, your cash flow and how you price. The full guide explains the conditions and exclusions, what the invoice must say, CGST and SGST versus IGST, and how to handle a contract that mixes security and housekeeping staff. Always confirm your own case with your CA.

Read the full guide: GST on manpower and security services →

Why do contractors under-bill?

Under-billing is rarely one big mistake. It is a few staff-days missed at each site, overtime that was worked but never agreed in writing, a reliever who covered a weekly off but was not counted, or a rate that stayed the same for six months after the VDA went up. Each is small; across ten sites and a year they add up to a real share of your margin.

Most of these leaks trace back to attendance that cannot be trusted or cannot be shown. The full guide lists the common leaks, how to find them in last month's bill, and why billing straight from a clean, per-site attendance record closes them.

Read the full guide: why contractors under-bill →

What should you do when wages go up?

Most states revise the VDA part of the minimum wage once or twice a year. The day a revision takes effect, your cost per post rises, but your bill only rises if your contract lets it. Three habits protect you:

1. Write a revision clause into every contract: the rate moves with the statutory wage from the date of the notification.
2. Keep one costing sheet per client so the new rate is two cells away.
3. Send the revised rate in writing the same month, with the notification attached, and bill the new rate from its effective date.

Here is what a ₹500 VDA increase does to the example post above:

On 20 posts, that is about ₹16,000 a month you pay whether or not the client agrees to the new rate. Run your own numbers in the manpower rate calculator.

What does one month look like, from attendance to payment?

A predictable monthly routine is what keeps costing assumptions and real bills in line. A typical cycle for an agency with several client sites looks like this:

Notice the timing problem in the middle of that table: you must pay wages within the first week, while the client may pay your bill weeks later. That gap is a real cost, and it belongs in your service charge.

How do you get paid on time?

• Agree the bill date and the payment period in the contract, and the documents that must go with each bill.
• Send the attendance summary with the bill, not after the client asks for it.
• Match the client's format. Many large clients process bills only in their own layout or on their own portal; learn it once.
• Follow up on a schedule, starting the day after the due date, and keep a simple list of outstanding bills by client and age.
• Price the wait. If a client always pays in 60 days, that finance cost belongs in their rate at the next revision.

How do costing and billing connect to attendance?

Costing assumes a number of staff-days per post. Billing charges for the staff-days that actually happened. Salary pays for the days each person actually worked. All three rest on the same record: who was on duty, on which day, at which site. When that record is a paper register filled in from memory, the three numbers drift apart, and you discover it only when a staff member disputes his pay or a client disputes the bill.

HaazriPro is built around that single record. Supervisors mark attendance by tapping each staff member's face photo, even offline. At month end the same attendance gives the salary sheet and, for each site, staff-days multiplied by that site's agreed billing rate.

Sources

• PIB, 21 Nov 2025: the four Labour Codes made effective
• Code on Wages, 2019 (India Code)
• Code on Social Security, 2020 (India Code)
• PIB, 16 Sept 2026: EPF wage ceiling raised to ₹25,000
• ESIC: contribution rates
• ESIC: coverage and wage limit
• Notification 11/2017-Central Tax (Rate): rates for services, heading 9985
• Notification 29/2018-Central Tax (Rate): reverse charge on security services
• GST Council, 56th meeting: rate changes from 22 September 2025

This guide explains the rules in plain language. It is not legal or tax advice. Laws and rates change, so confirm statutory rates and the GST treatment of your contracts with your CA before you act on it.