Co Employment Services Under SAC Code 998517
Co employment services under this SAC code relate to arrangements where a professional employer organisation shares employer responsibilities with the client. Under this model, co employment services, PEO services and professional employer organisation support cover HR administration, payroll, compliances and sometimes benefits, while the client directs day to day work. Many SMEs and growing businesses use such arrangements to manage HR and statutory risk. Tagging these services under the right SAC code makes billing and GST treatment more transparent.
Co Employment Services GST Rate for SAC Code 998517
In GST, co employment and PEO arrangements are treated as comprehensive HR and employment management services. The taxable value usually includes a service fee calculated as a percentage of payroll, a per employee charge or a fixed monthly amount for handling HR, payroll and compliance for the co employed workforce.
Historically, such HR support services were taxed under the standard professional services slab. After the September 2025 revision, co employment and PEO services classified under this code generally continue to be taxed at 18% in ordinary taxable cases, as they fall under business support and employment services.
The table below summarises the latest standard GST rate applicable for this SAC code.
| Code | Description | Old GST Rate (till 21 Sep 2025) |
New GST Rate (from 22 Sep 2025) |
Notes on change / inclusions |
|---|---|---|---|---|
| 998517 | Co-employment staffing services | 18% with ITC | 18% with ITC | Co-employment / PEO services are covered under 99851 employment services; updated GST guides note 18% as the applicable rate, with ITC allowed to eligible recipients. No 5% general-use slab is notified for this code. |
Service providers should describe the co employment or PEO scope clearly, mention SAC 998517 on invoices and charge 18% GST where tax is payable, helping clients manage HR outsourcing costs and claim eligible credits correctly.
Explore Other SAC Codes Under 9985
SAC 998517 falls under heading 9985, alongside recruitment, staffing, payroll and other HR outsourcing services. Together, these codes reflect the full spectrum of modern workforce solutions that businesses can use to support their operations.
The list below highlights key six-digit SAC codes under 9985 which your backend can render as a dynamic table for users who need a detailed classification view.
This co employment code is usually chosen when the service provider takes a broad HR role for employees on its rolls, while the client controls daily work. Where the engagement is limited to permanent recruitment, simple staffing, temp to perm arrangements or stand alone payroll processing, other codes within 9985 are a more accurate choice.
Conclusion
This SAC code is designed for co employment and PEO style services where a specialist firm shares employer responsibilities with the client and manages HR, payroll and compliance. These services typically attract 18% GST under the standard slab. Using the correct code and rate helps both the service provider and the client keep co employment costs visible and defendable during GST reviews. For cross border PEO models or large multi entity arrangements, it is prudent to document responsibilities clearly and review the GST impact with a tax professional.
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.