Digital payments at core — Here's what Gen Z's UPI spending for essentials, discretionary, travel and subscriptions show

Analysis of millions of UPI transactions, reflecting the spending habits of more than 5.2 lakh salaried Gen Z users by SalarySe showed that digital payments formed the core of the generation's financial management.

From managing utility bills, recurring subscriptions and financial services, spending by India's youngest workforce is concentrated around a few core categories that support everyday living rather than the occasional big-ticket purchases, according to the study.

Piyush Bagaria, Co-founder of SalarySe in the statement noted that Gen Z in India is the first generation to manage almost every aspect of its financial life through a digital-first ecosystem. “Our analysis suggests that India's youngest salaried workforce is building more structured financial habits, where everyday responsibilities, digital payments and lifestyle choices coexist seamlessly,” he said.

Gen Z buy essentials, not big-ticket lifestyle purchases

Majority of Gen Z's monthly wallet is spent on everyday essentials and recurring financial commitments rather than big-ticket lifestyle purchases, the study found.

“The findings challenge common perceptions of Gen Z as a lifestyle-first generation, highlighting a spending pattern where everyday necessities, digital payments, financial services and discretionary consumption coexist as young professionals navigate evolving incomes and life stages,” the release said.

The analysis also highlights evolving recurring payment habits for entertainment subscriptions. Beyond entertainment, recurring mandates increasingly span utilities, financial services and other digital subscriptions, which highlighted the expanding role of UPI and AutoPay in managing everyday digital payments.

“The scale and ubiquity of UPI have fundamentally changed how young professionals spend and manage their financial decisions. As this workforce continues to grow, these behavioural shifts will reshape how businesses, employers and financial institutions design products, employee benefits and financial experiences for the next decade,” Bagaria added.

Gen Z's spending habits in millions of UPI transactions

“The prominence of bill payments, subscriptions and financial services reflects a generation that has grown up with digital payments at its core, where managing utility bills, recurring subscriptions and financial services through digital platforms has become an integral part of everyday life,” the SalarySe release stated.

According to the study by the artificial intelligence (AI) and UPI-powered employee financial benefits platform, found the following expenditures comprised their big expenditures:

• Bill payments and subscriptions account for the largest share of monthly consumption spending, comprising 20.1% of the pie,
• This was followed by grocery, which comprises 15.7% of the spending,
• Further, financial services at 12.2%, shopping at 11.9%, and food at 11.5%, make up the top five basket.
• Overall, these “everyday” categories account for over 70% of Gen Z's monthly spending.
• The study also found that discretionary spending doesn't fall with age — 32% for both 18–23 and 24–29 age groups saw spend on essentials rise from 50% to 58%.
• Meanwhile, spending on travel was only 5% of the pie.
• Further, when it comes to observable recurring entertainment subscriptions — Jio took the lead (12.4%), followed by Netflix (10.7%), and Spotify (5.6%).

How is spending behaviour evolving?

The study further noted that financial priorities evolve across different life stages, analysing spending behaviour among Gen Z users aged across 18 to 29 years.

• Despite differences in income and financial responsibilities, discretionary spending remains remarkably consistent at 32% among both 18 to 23-year-olds and 24 to 29-year-olds.
• However, the composition of spending changes significantly: Essential spend rises from 50% among 18 to 23-year-olds to 59% among those aged 24 to 29.

“The findings indicate that India's youngest workforce is developing a distinct financial identity, shaped by a mix of everyday essentials, lifestyle consumption and digital-first financial behaviour. As Gen Z continues to become a larger part of the formal workforce, these evolving spending patterns could influence how businesses, employers and financial institutions design products, benefits and digital experiences for the next generation,” the report added.