Kautilya’s Arthashastra describes several principles of wage determination, which are briefly described below :

• Cost of Living theory of Wages : Kautilya says that a worker’s wages should be sufficient to enable him provision of bodily comforts and allow him to serve his master with complete zest and dedication and enable him to be free from any kind of greed and dissatisfaction. This concept of Kautilya makes clear that the wages of the labourers should be equal to the amount required for the maintenance of life.
• Ability Theory of Wages : Different workers have varying abilities. Skilled and unskilled workers cannot be paid the same wages. Therefore, Kautilya thought that the workers should be paid wages and allowances according to their skill and efficiency. 
• Productivity Theory of wages : Kautilya very clearly states that a worker’s salary should be in the ratio of quantity produced by him and the time taken by him to produce that quantity. Wages should be paid to worker only for the work that has been done by him. A worker weaving/ spinning thread should be paid according to the thickness, type of the thread or in accordance with its quality. 
• Customary Theory of wages : Regarding the businesses in which there was no definite form of wage determination, Kautilya had said that in such a business, wages should be given as cash or in the form of commodity in practice. He had these views that if an employee does not work then he should be punished. 
• Share Theory of Wages : In the professions where it was not possible to fix wages, Kautilya was of the opinion that workers should get a share from the production. Chanakya says that the farmer’s servant should take grain, ghee be taken by shepherd’s servant, the servant of vaishya will take one-tenth part of the items he has sold/handled, but on the condition that his salary is not decided earlier.

Provision of Social Security: Kautilya also made provisions for the welfare and safety of the workers. 

Some of the major schemes are the following :

• Pension Scheme : Kautilya had also created a pension scheme, according to which if an employee dies while working, his salary should be given to his son and wife in the form of a pension. Not only this, financial aid should also be given to children, elderly and sick family members of such employees. They should be given financial assistance even in the event of death or disease in their home and on the birth of their child.
• Rules of Leave : Kautilya clarified that If the labourers get sick at the time of incidental work or have suffered adversity, they will be entitled to casual leave. They can send someone in their own place to take leave. He also clarified that if the work of embroidery is done by women labourers during festivals or holidays, then they should be paid extra wages in addition to food, pulses and goods. 
• Preference in Employment for the poor and disabled : Kautilya made a provision that the king should give employment on a preferential basis to widows, disabled women, artistes, etc. in jobs like spinning and weaving. He also provided for overtime in tasks of spinning and weaving. Temporary and permanent employees should get less or more salaries depending on their ability and work capability.