Insurance Deduction Calculator
Split a group health insurance premium between employer and employee, add GST at 18%, and see the monthly salary deduction. Dependant and top-up cover is normally the employee's own cost.
Free · No sign-up · Nothing leaves your browser · Figures reviewed 22 September 2026
Your details
Per member per year, before GST.
Share of the employee's own cover borne by the employer.
Deducted from salary each month
₹2,200
₹26,400 a year of a ₹35,400 total premium.
- Employer · 25%
- Employee · 75%
The premium
- Employee cover
- ₹9,000
- Dependant cover3 dependants at ₹7,000
- ₹21,000
- Voluntary top-up
- ₹0
- GST at 18%
- ₹5,400
- Total premium
- ₹35,400
Who pays
- Employer100% of the employee's own cover
- ₹9,000
- Employee, for the year
- ₹26,400
- Employee, per month
- ₹2,200
A premium the employer pays for group health cover is not a taxable perquisite for the employee.
The employee's own share of a group premium does not qualify for the section 126 (old section 80D) deduction in the new tax regime, and in the old regime only where it is genuinely the employee's own payment.
Deducting a premium from salary is a deduction from wages and counts towards the 50% cap in section 18(2) of the Code on Wages.
Group health cover is usually quoted per member per year before GST. Turning that into a payslip line means deciding who pays for whom: most employers cover the employee in full and pass on the premium for dependants and any voluntary top-up.
A premium the employer pays is not a taxable perquisite for the employee. The employee's own share is a deduction from wages, and it counts towards the 50% cap on total deductions.
Frequently asked questions
- Is employer-paid health insurance taxable for the employee?
- No. A premium the employer pays for group health cover is not a taxable perquisite in the employee's hands.
- Can an employee claim the 80D deduction on a group policy?
- Only for the part they genuinely pay themselves, and only in the old tax regime — section 126, formerly 80D. The new default regime does not allow it at all.
- Does an insurance deduction count towards the 50% deduction cap?
- Yes. Section 18(2) of the Code on Wages caps total deductions from wages at 50% in any wage period, and a premium recovery counts towards it alongside PF, loans and everything else.
About this tool
Built by the ViniOffice team. Figures and rules last reviewed 22 September 2026 against the statutory reference this team maintains. Indian statutory rates are date-effective and change by notification — confirm against the current one before running payroll or filing.
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