Overview
Payroll turns employment terms into accurate monthly payments and statutory deductions: TDS on salary, provident fund and ESI contributions, and professional tax where it applies. Under the Labour Codes, the definition of "wages" affects how contributions and benefits are calculated. Have your salary structure reviewed against the current rules.
Who this is for
- Employers running monthly payroll
- Finance teams choosing payroll software or a provider
Step by step
- Design the salary structureDefine components and check them against the current definition of wages.
- Collect employee declarationsTax regime choice and investment declarations affect TDS.
- Process monthly payrollCalculate pay, deductions and employer contributions; pay salaries through the bank.
- Deposit and fileDeposit TDS, PF, ESI and professional tax by their due dates and file the related returns.
- Year-endIssue TDS certificates for salary and reconcile annual figures.
Documents you will need
- Employee master data
- Attendance and leave records
- Tax declarations and proofs
- Challans and return acknowledgements
The process
Deposits and returns are made on the Income Tax, EPFO, ESIC and State portals.
Authorities involved
- Income Tax Department, EPFO, ESIC, State PT departments: Receive deductions and returns.
Common mistakes
- Deducting TDS without considering the employee’s chosen regime.
- Late PF or ESI deposits.
- Delaying full and final settlement after exit.
Checklist
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Frequently asked questions
Is PF mandatory for every employee?
It depends on whether your establishment is covered and on the employee’s wages and status. Check the current EPFO rules.
Official sources
- EPFO — employer registration and returns — Employees’ Provident Fund Organisation
- ESIC — employer registration and contributions — Employees’ State Insurance Corporation
- Income Tax e-filing portal — Income Tax Department
- Ministry of Labour and Employment — Labour Codes and rules — Ministry of Labour and Employment
Related services
- EPF Registration — from ₹2,123 (incl. GST) + Govt. Fees, if applicable
- TDS Return Filing – Quarterly — from ₹6,843 (incl. GST) + Govt. Fees, if applicable
- Professional Tax Registration — from ₹2,123 (incl. GST) + Govt. Fees, if applicable
Tools: Income tax calculator