How does a recruiter payout per closure work in India?
A recruiter payout per closure in India is paid when a candidate you introduced joins the client, not when they accept the offer. Usually the candidate joins, you send joining proof and an invoice, the client or consultancy pays on agreed days, and tax at source may be deducted. Write the trigger, payment days and replacement terms down.
Indian central rules as of 31 October 2026. How much a closure pays is covered in recruitment commission in India.
At a glance
- Trigger: the joining date, confirmed in writing.
- Payment days: agree a number of days from the joining date or invoice, in writing.
- Documents: joining confirmation, invoice, and your PAN and bank details.
- Tax: TDS may be deducted, and GST may apply to your invoice depending on turnover and registration.
The payout flow
| Step | What happens | What you do |
|---|---|---|
| 1 | Candidate accepts offer | Track the notice period and joining date |
| 2 | Candidate joins | Get written confirmation: joining email, offer copy or client note |
| 3 | You raise an invoice | Quote the candidate, role, joining date, agreed fee and tax details |
| 4 | Client or consultancy processes payment | Follow up on the agreed date |
| 5 | Tax is deducted if applicable | Collect the TDS certificate; keep it for your tax return |
| 6 | Replacement period runs | Watch for the candidate leaving; the fee may be refundable |
Worked example (illustrative). A candidate with annual CTC of Rs 12,00,000 joins. At a fee of 8.33 percent, the consultancy's fee is Rs 99,960. If you agreed a 50 percent share, your share is Rs 49,980 before tax. Fee percentages are by agreement, not by law.
What goes in the agreement?
- The fee or share, and what CTC includes.
- Trigger: joining date.
- Payment days after joining or after the client pays.
- What happens if the candidate does not join.
- Replacement or refund period if they leave early.
- Who deducts tax, and who gives you the certificate.
Use the fee agreement template, adapted to Indian law by a lawyer.
What if payment is late?
- Send a polite reminder with the invoice and joining proof.
- Call the finance contact and agree a date in writing.
- Send a formal notice referencing the agreement.
- If still unpaid, ask a lawyer about your options.
Tax points
The Income Tax Department chart lists TDS rates by payment type. As of the chart dated January 2026, commission or brokerage and professional fees have different rates, and the section numbers changed for payments from 1 April 2026. GST registration for service suppliers depends on turnover; the CBIC FAQ states the general thresholds. Confirm both with a chartered accountant.
What not to do
- Never take money from candidates. See how to spot job scams.
- Do not submit candidates without a written agreement.
- Do not share a candidate's data without consent.
FAQ
When am I paid? After the joining and the agreed payment days.
Do I get paid if the candidate backs out after offer? Usually not, unless your agreement says so.
Is a part payment possible before joining? Only if the agreement provides for it, as in some retained searches.
Sources
- Income Tax Department, TDS rates chart - https://www.incometaxindia.gov.in/documents/20117/42998/TDS-Rates_2026-01-20_02-48-40_a44c15_en.pdf/5ced020c-5670-ccab-840c-ab3eb62e8b84 (accessed 31 October 2026)
- CBIC, FAQ on GST - https://cbic-gst.gov.in/aces/Documents/faq-on-gst.pdf (accessed 31 October 2026)
- Income Tax Department - https://www.incometax.gov.in (accessed 31 October 2026)
This is general information, not legal, tax or immigration advice. Rules change and your situation may differ. Consult a licensed attorney or qualified adviser.