This work reports the fabrication of magnetite (Fe3O4) nanoparticles (NPs) coated with various biocompatible surfactants such as glutamic acid (GA), citric acid (CA), polyethylene glycol (PEG), polyvinylpyrrolidine (PVP), ethylene diamine (EDA) and cetyl-trimethyl ammonium bromide (CTAB) via co-precipitation method and their comparative inductive heating ability for hyperthermia (HT) applications. X-ray and electron diffraction analyses validated the formation of well crystallined inverse spinel structured Fe3O4 NPs (crystallite size of ~ 8–10 nm). Magnetic studies confirmed the superparamagnetic (SPM) behaviour for all the NPs with substantial magnetisation (63–68 emu/g) and enhanced magnetic susceptibility is attributed to the greater number of occupations of Fe2+ ions in the lattice as revealed by X-ray photoelectron spectroscopy (XPS). Moreover, distinctive heating response (specific absorption rate, SAR from 130 to 44 W/g) of NPs with similar size and magnetisation is observed. The present study was successful in establishing a direct correlation between relaxation time (~ 9.42–15.92 ns) and heating efficiency of each surface functionalised NPs. Moreover, heat dissipated in different surface grafted NPs is found to be dependent on magnetic susceptibility, magnetic anisotropy and magnetic relaxation time. These results open very promising avenues to design surface functionalised magnetite NPs for effective HT applications. © 2020, The Author(s).