Temp To Perm Staffing Services Under SAC Code 998516
Temp to perm staffing services under this SAC code cover cases where employees first join as temporary or contract staff and later move to the client’s permanent rolls. This contract to hire model lets companies test candidates on live work before confirming them. The staffing firm manages payroll and compliance during the temp period and charges a fee on conversion, so using this SAC code separates such hybrid arrangements from pure temp or permanent staffing.
Temp To Perm Staffing Services GST Rate for SAC Code 998516
For GST, temp to perm staffing is treated as manpower supply and HR support. The taxable value normally includes monthly billing for the temporary phase plus any one time conversion or placement fee charged when the employee moves to the client’s rolls.
Before the September 2025 revision, these services were generally taxed at the standard rate, similar to other staffing services. After the change in slabs, temp to perm staffing under this code remains within the 18% GST slab in most taxable scenarios, as it is considered a form of contract staffing with an additional conversion component.
The table below highlights the latest GST rate notified for SAC code 998516 in regular cases.
| Code | Description | Old GST Rate (till 21 Sep 2025) |
New GST Rate (from 22 Sep 2025) |
Notes on change / inclusions |
|---|---|---|---|---|
| 998516 | Temporary staffing-to-permanent placement services | 18% with ITC | 18% with ITC | Conversion of temp staff to permanent placement is specifically listed at 18% GST in recent staffing rate summaries. Concessional sports-event entries do not apply here. |
Staffing firms should clearly present the temp phase billing and the conversion fee, mention SAC 998516 and charge 18% GST wherever the service is taxable, so that both parties can track hiring costs and credits without confusion.
Explore Other SAC Codes Under 9985
SAC 998516 is one of the specialised staffing codes within heading 9985, which covers various employment and HR service models including permanent recruitment, contract staffing, temporary staffing, payroll outsourcing and co employment.
Below is a list of related six-digit SAC codes under 9985 that your application can display through a separate table sourced from the master data.
This code is best used when there is a clear temp period followed by a planned or possible move to permanent employment. If the engagement is purely temporary, fully permanent, only payroll related or based on full co employment, another SAC code from the 9985 family generally fits better.
Conclusion
This SAC code is meant for temp to perm staffing where candidates start as temporary resources and may later become permanent employees of the client. These services are typically taxed at 18% GST, in line with other manpower supply services. Choosing the right code and rate supports clean tracking of trial hiring costs and conversion fees in contracts and GST returns. For large scale programmes or cross location conversions, it is a good idea to align HR, finance and tax teams on the GST treatment in advance.
Important Disclaimer
The entire content on this page has been arranged to the best of the author's understanding and is subject to periodic updates as per the law for the time being in force. The above does not constitute professional advice or a formal recommendation. While due care has been taken in preparing this content, the existence of mistakes and omissions cannot be ruled out. BUSY Infotech Private Ltd. and its associates will not be held responsible for any loss or damage arising from any inaccurate or incomplete information in this document. We recommend consulting a professional tax consultant before acting on the information contained in this piece of content.