Why Outsource Payroll?

Payroll compliance involves four different statutory obligations every month — PF, ESIC, TDS, and salary slips. One mistake affects all your employees.

01

Multiple Compliance Deadlines

PF by 15th, ESIC by 15th, TDS by 7th — every month. Payroll must be processed accurately before these deadlines to avoid interest and penalties.

02

Accurate Salary Slips

Employees need payslips for home loans, rental agreements, and bank applications. Incorrect slips or missing TDS deductions create personal demand notices for employees.

03

Avoid PF/ESIC Inspections

Non-deposit or short deposit of PF/ESIC attracts interest, penalty, and departmental inspection — disrupting operations and reputation.

04

HR Stays Focused

Founders and HR teams focus on hiring and performance while payroll compliance runs on schedule — handled completely by compliance experts.

Legal Framework

Payroll compliance spans four major statutes — all with independent penalty provisions.

EPF & Miscellaneous Provisions Act 1952: PF contribution mandatory for establishments with 20 or more employees. Employer contributes 12% of basic salary; employee contributes 12%. Deposit due by 15th of each month. Non-deposit: interest 12% p.a. + penalty up to 25% of arrears.

Employees State Insurance Act 1948: ESIC applies to employees earning ₹21,000/month or below (₹25,000 for persons with disability). Employer: 3.25%; Employee: 0.75% of gross wages. Deposit due by 15th of each month.

IT Act 1961, Section 192: TDS on salary must be deducted at estimated annual tax rates and deposited by 7th of the following month. Quarterly TDS return (24Q) filed with Form 16 issued annually.

Payment of Wages Act 1936: Wages must be paid by the 7th of the following month (for establishments below 1,000 employees) or by the 10th (for larger establishments).

Monthly Payroll Process

Full-cycle payroll — from structure setup to statutory filings — handled every month without fail.

1

Set Up Payroll Structure (One-Time)

CTC breakup designed — basic salary, HRA, allowances, and deductions configured for each employee. Investment declarations collected for TDS estimation.

2

Monthly Attendance & Leave Reconciliation

Attendance records reviewed. LOP (loss of pay), leaves, and bonuses factored into the gross salary computation for the month.

3

Compute Gross Salary, PF/ESIC Deductions, TDS

Gross salary calculated. PF (12% employee + 12% employer) and ESIC (0.75% employee + 3.25% employer) deducted. TDS computed on projected annual income.

4

Generate Salary Slips for All Employees

Detailed payslips generated for each employee showing gross pay, all deductions (PF, ESIC, TDS, professional tax), and net take-home salary.

5

File PF (ECR), ESIC Return & Deposit TDS

PF Electronic Challan-cum-Return (ECR) filed on EPFO portal. ESIC contribution challan generated. TDS deposited by 7th of next month. All challans shared with employer.

Documents Required

Required once at onboarding, then only monthly attendance updates are needed.

Employee details — name, PAN, Aadhaar, date of birth, date of joining
Bank account number and IFSC of each employee
UAN (Universal Account Number) for PF-registered employees
CTC structure / offer letters for each employee
Monthly attendance records or leave register
Previous month payroll data (for first month onboarding)
Investment declaration forms (Form 12BB) for TDS calculation
EPFO employer credentials and ESIC employer code

Timeline

Payroll by 28th of each month. All statutory deposits completed before their respective due dates.

28th

Payroll Processed

7th

TDS Deposit Due

15th

PF & ESIC Due

Quarterly

TDS Return (24Q)

Benefits & Risks

Benefits of Compliant Payroll

Fully compliant payroll — avoid PF/ESIC inspection and penalty notices
Employees receive accurate salary slips required for loans and rental agreements
TDS deducted correctly — no demand notices on employees at year-end
Monthly statutory filings on time — zero default record
HR and founders free to focus on business instead of compliance deadlines

Risks of Non-Compliance

Non-deposit of PF: interest 12% p.a. + penalty up to 25% of arrear amount
ESIC non-compliance: employer penalized and employees lose medical coverage
Wrong TDS deduction: employees receive income tax demand notices
Late TDS deposit: interest 1.5%/month from deduction date
All defaults attract potential prosecution under respective Acts

Monthly Payroll Processing — PF, ESIC & TDS