Navigate Essential Legislative Requirements for Payroll in India
Selected theme: Essential Legislative Requirements for Payroll in India. From EPF and ESI to TDS, Bonus, Gratuity, and state-specific obligations, this home page turns complex rules into clear actions. Stay ahead with timely insights, practical checklists, and friendly reminders—subscribe for updates and ask your payroll questions anytime.
Central statutes you cannot ignore
Payroll touches several core laws: Payment of Wages, Minimum Wages, Payment of Bonus, Payment of Gratuity, EPF, ESI, Income‑tax, Equal Remuneration, and Maternity Benefit. Labour Codes aim to consolidate many of these, but until fully implemented, legacy acts and current notifications govern your monthly routine.
State-level overlays that change the details
Shops and Establishments Acts, Professional Tax, and Labour Welfare Fund rules operate at the state level, affecting registrations, registers, holidays, and returns. The framework remains central, but forms, portals, and due dates vary by location—so your compliance calendar must mirror your establishment footprint.
A founder’s first compliance audit
When Riya’s Chennai startup crossed twenty employees, EPF registration triggered overnight. An inspector later praised their tidy ESI, PT, and wage registers—painstakingly built from day one. Her lesson: front-load the basics and audit yourself monthly. Share your first-audit story in the comments and help another founder breathe easier.
Registrations and Applicability Thresholds
EPF and ESI triggers
EPF generally applies when an establishment employs 20 or more persons; contributions typically sit at 12% of PF wages from both employer and employee. ESI usually applies at 10 or more employees in notified areas, covering eligible employees up to the current wage ceiling of ₹21,000 per month. Register promptly to avoid penalties.
For PF, the base typically centers on Basic plus Dearness Allowance, and regularly paid universal allowances may need inclusion. For Bonus, calculations often reference salary or wages as Basic plus DA. For Gratuity, last drawn Basic plus DA drives payout. A unified definition is expected under the Labour Codes once fully notified.
Wages, Deductions, and Timelines
State Compliance Calendar and Practical Workflows
Monthly and quarterly rhythm
Mark PF and ESI payments typically by the 15th, TDS by the 7th, and Professional Tax as per each state’s cycle. Add quarterly TDS returns, state returns, and periodic LWF contributions where applicable. Want our downloadable master calendar with reminders? Subscribe and choose your operating states.
Registers, returns, and inspections
Keep attendance, wage, overtime, leave, bonus, and gratuity registers as prescribed. Ensure timely online filings, signed extracts, and acknowledgment archives. During inspections, present organized evidence that matches returns and challans. A simple naming convention can halve audit time—ask us for the template in the comments.
Change Management: New Labour Codes and Staying Updated
The four Labour Codes seek to simplify compliance, unify key definitions, expand social security, and modernize record‑keeping. A common ‘wages’ concept could affect PF, Bonus, Gratuity, and leave valuations. Track state notifications and readiness to understand when the new regime actually starts affecting your payroll.
Change Management: New Labour Codes and Staying Updated
Test payroll with a conservative ‘wage’ definition where allowances cannot exceed half of total cost‑to‑company, then model PF and Gratuity impacts. Share findings with finance to realign budgets, revise offer templates, and reset compensation bands. Dry‑run today to avoid last‑minute scrambles when notifications land.
