Start-up’s salary expenditure shot up by 43% between April and September

Total salary expenditure of start-ups increased by 43% indicating hikes, promotions and new hires

Akashdeep Arul
New Update
Start-up’s salary expenditure shot up by 43% between April and September

Indian start-ups has witnessed a hike in its salary expenditure after it rose by 43% in the months from April to September, as per a Razorpay report. This comes after payroll management has become the biggest expenses that organizations incurred during the pandemic which served as an inflection point for start-ups.


In the last two years, payroll procedures of start-ups have undergone a change with the adoption of new technological interventions.

Total salary spends increased by 43% during the period. The pandemic caused many start-ups to freeze performance appraisals and increments. However, the scenario has reversed this year, indicating a gradual movement towards a business recovery.

Edtech, fintech, and electronics (online and offline) are some of the sectors that witnessed a significant increase in their salary spend during the last six months, according to Razorpay. Moreover, some startups even increased the median salary of their employees by 7% this year.


There has been a 52% increase in disbursed bonuses for organizations. The amount paid out on bonuses increased by 23% during the past year as opposed to pay cuts and deferred bonuses last year. Real estate, hospitality and agritech are some of the sectors that were not able to give out bonuses.

Employee headcount has increased by 30% in the last six months led by an increase in onboarding. At an individual organizational level, 57% saw an increase in hiring, and 28% saw a decrease in headcount, in the last six months.

During the last six months, employee headcount in entry-level roles grew by 14% and the data revealed that mid-level roles grew by 31% while mid-senior level roles saw a growth of 38%, Razorpay reported.


“While employing the right talent is critical for businesses and especially start-ups, it also means spending man-hours undertaking tedious payroll management processes without leaving any scope for errors. This continues to be one of the most challenging tasks in business finance,” Shashank Kumar, chief technology officer and co-founder, Razorpay said.

Apart from hiring, the reimbursements to employees increased by 50% in the last six months and travel reimbursements increased by 54% after companies have opened up its offices.

According to a recent industry survey, over 57% of businesses rely on manual efforts for payroll management. Today, organizations are forced to rethink how integrated HRM, payroll software and services can be used to increase efficiency and sustain their payroll practices.


There has been a shift in the industry sentiment and the outlook is that –

WFH related allowances will increase: Payroll predict almost an 80% rise in reimbursements and allowances related to internet connections to further enable remote and hybrid work regimes.

Contractor, freelancers, and gig economy payments are on the rise among startups. Payroll software will have to extend features to accommodate this trend in terms of onboarding and managing compliances.


Data security: Organizations have the responsibility to protect a huge pool of employee data like salaries, addresses, bank account details, and more. Technologies in automated payroll has evolved to protect data by including methods like security questions.

Insurance offerings: Employee health and wellbeing will continue to remain a top priority and we believe more startups will offer health insurance to cover employees and their dependents.