—Payroll & Labour Law Compliance
Payroll Processing
Monthly salary computation, payslips, salary TDS computation and Form 16.
Handled by a practising Chartered Accountant or Company Secretary.
Scope of work
Monthly salary computation, payslips, salary TDS computation and Form 16.
Key deliverables
- Payroll register
- payslips
- Form 16
Governing law
Income-tax Act (1961 / 2025, as applicable to the period)
Frequency
Monthly
REGISTRATION + COMPLIANCE CARE
Payroll Processing + Compliance Care
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+ ₹9,599/yr for year-one ROC compliance
- Payroll register
- payslips
- Form 16
- Financial statements in Schedule III format
- Board report and AGM notice
- Filed AOC-4 with SRN
- Filed MGT-7 / MGT-7A with SRN
- Board and AGM minutes
500+
Companies incorporated
100%
CA/CS-signed filings
4.8/5
Founder rating
—A closer look
Understanding payroll management
Everything below is written for employers — what running payroll in India involves each month, where the compliance traps are, and how outsourcing it works.
What is payroll management?
Payroll management is everything involved in paying employees correctly and on time: calculating salaries, attendance, leave and variable pay, deducting income tax, PF, ESI and Professional Tax, paying the money, depositing the deductions, filing the returns, and giving employees payslips and Form 16.
It sits at the meeting point of tax law, social security law, state law and employee trust. Mistakes are visible — employees notice immediately — and statutory defaults carry interest and penalties.
The key terms
The building blocks of a payroll:
- CTC and gross salary
- Cost to company includes employer contributions and benefits; gross salary is what's paid before employee deductions.
- TDS on salary
- Income tax the employer deducts monthly, based on the employee's estimated annual tax under their chosen regime.
- EPF
- Provident fund contributions — generally 12% each from employer and employee, on wages up to the applicable ceiling or more by choice.
- ESI
- Health insurance contributions for employees earning up to ₹21,000 a month, where ESI applies.
- Professional Tax
- A state tax on employment, deducted monthly in states that levy it, including Telangana.
- Form 16
- The annual TDS certificate the employer gives each employee.
- Full and final settlement
- The final payment to a leaving employee, including leave encashment and gratuity where due.
A simple example
A Hyderabad startup grows from 12 to 45 employees in a year. Payroll had been run on a spreadsheet by the founder. PF registration was due at 20 employees but was missed, regime choices weren't collected, and Professional Tax wasn't being deducted. Moving payroll to a managed service fixes the setup: PF is registered and back-contributions calculated, regime declarations are collected, Telangana Professional Tax is registered and deducted, and each month's payroll is reviewed before release. Employees get payslips on the same day each month.
Why it matters
Payroll errors cost money and trust:
- Employee trust
- Late or wrong salaries damage morale quickly.
- TDS defaults
- Short deduction or late deposit of TDS attracts interest, fees and disallowance.
- PF and ESI damages
- Late contributions attract interest and damages, and inspections can go back years.
- State compliance
- Professional Tax and Labour Welfare Fund obligations differ by state.
- Labour Codes
- The new Codes change wage definitions and related calculations.
- Confidentiality
- Salary data is sensitive and needs controlled access.
- Founder time
- Payroll consumes time every month that's better spent elsewhere.
Who is this for?
- Startups hiring their first employees
- Growing businesses crossing PF or ESI thresholds
- Businesses with employees in more than one state
- Foreign companies with Indian employees or subsidiaries
- Businesses whose in-house payroll person has left
We work with your HR or attendance system, or provide one, and keep the final approval with you.
Ways to run payroll
How the options compare:
| Aspect | Spreadsheet | Payroll software | Outsourced | Employer of record |
|---|---|---|---|---|
| Who calculates | You | Software, set up by you | Provider | EOR employs the staff |
| Compliance | Your responsibility | Your responsibility, with help from the tool | Provider handles filings | EOR handles everything |
| Best for | Very small teams | Teams with in-house HR | Growing businesses | Foreign companies without an Indian entity |
| Risk | High error risk | Setup errors | Depends on provider | Less control, higher cost |
What we'll need from you
- Employee data
- Joining details, PAN, Aadhaar, bank accounts and UAN.
- Salary structures
- CTC breakdowns and any variable pay rules.
- Attendance and leave
- Monthly inputs, or access to the attendance system.
- Registrations
- TAN, PF, ESI, Professional Tax and Shops and Establishments.
- Tax declarations
- Employees' regime choices and investment proofs.
- Policies
- Leave, reimbursement and bonus policies.
Pricing is per employee per month, with a minimum.
How our monthly payroll works
A typical monthly cycle:
- 1
Collect inputs
Attendance, leave, joiners, leavers and variable pay are collected.
- 2
Calculate
Salaries, TDS, PF, ESI and Professional Tax are calculated.
- 3
Review and approve
You review a payroll summary with variances before approving.
- 4
Pay
Bank transfer files are prepared for release.
- 5
Deposit and file
TDS, PF, ESI and Professional Tax are deposited, and returns filed.
- 6
Payslips and reports
Payslips go to employees, and reports to you.
Beyond the monthly run
Payroll has an annual rhythm too:
- Regime declarations
- Collect regime choices and declarations at the start of the year.
- Proof collection
- Collect investment proofs from old-regime employees before the year-end.
- Quarterly TDS returns
- File Form 24Q each quarter.
- Form 16
- Issue Form 16 after the year-end.
- Increments
- Process annual revisions and arrears.
- Statutory payments
- Handle bonus, Labour Welfare Fund and other annual payments.
Benefits and responsibilities
Benefits
- Accurate, on-time salaries
- All statutory deductions deposited and filed
- Payslips and Form 16 for every employee
- Confidential handling of salary data
- More time for founders and HR
Responsibilities
- Send inputs by the agreed cut-off
- Tell us about joiners and leavers promptly
- Review and approve each payroll
- Fund salaries and statutory payments on time
- Keep salary structures and policies current
- Share employees' declarations
—FAQ
Questions employers actually ask us
Generally when you employ 20 or more people, though you can register voluntarily earlier. Once registered, PF applies to all eligible employees.