Payroll is more than salary transfer
Indian payroll touches at least seven different statutory authorities — Income Tax (TDS), EPFO (PF), ESIC, Professional Tax (state-wise), Labour Welfare Fund, Gratuity Fund and the new wage code regulators. Each has its own forms, due dates, and penalties.
Errors are not just compliance issues — they damage employee trust faster than any other operational mistake.
CTC structuring done right
- Basic salary at 40–50% of CTC for optimal PF and gratuity exposure
- HRA structured to maximise exemption based on city of residence
- LTA, food coupons, NPS employer contribution and reimbursements used legitimately
- Variable pay tied to measurable KPIs, not just discretion
- ESOPs documented separately with clear vesting and exercise terms
Statutory must-dos every month
- TDS on salary deposited by 7th of next month, return filed quarterly in Form 24Q
- PF contribution and ECR filed by 15th of next month
- ESIC contribution by 15th of next month, applicable up to wages of INR 21,000
- Professional tax — state-specific, monthly or annual
Beyond payroll: labour law and HR hygiene
Every company with 10+ employees must constitute a PoSH Internal Committee and conduct annual training. Employment contracts should clearly cover notice period, IP assignment, non-solicitation and confidentiality. Leave policy, expense policy and code of conduct should exist in writing — not just in WhatsApp messages.
Frequently asked
When is PF registration mandatory?
When the headcount crosses 20 employees, registration is mandatory. Voluntary registration is allowed earlier.
Do remote employees need state-specific PT registration?
Yes, professional tax depends on the state where the employee works. Distributed teams often need multi-state registrations.