HR Guide
Payroll & Statutory Compliance in India: A Practical Guide
By Mithun K. Singh, Founder, Svasamm Research · 16 July 2026
Running payroll in India is more than paying salaries — it’s PF, ESI, professional tax, TDS and the returns that go with each, on deadlines that don’t move. This guide explains the core statutory components and how an HRMS keeps them right.
The core statutory components
This is general information, not tax or legal advice. Thresholds and rates change — confirm the current position for your establishment with a qualified professional.
- Provident Fund (PF) — employee and employer contributions, filed with EPFO.
- ESI — for employees below the wage threshold, filed with ESIC.
- Professional Tax — state-specific, with its own slabs and returns.
- TDS on salary — deducted per the income-tax slabs and deposited monthly.
Where payroll goes wrong
- Attendance not tied to pay — manual entry causes errors and disputes.
- Missed deadlines — late PF/ESI/TDS deposits attract penalties.
- Wrong slabs — professional tax and TDS mis-computed.
- No audit trail — payslips and returns not reconstructable.
How an HRMS keeps it right
Salary structures compute PF, ESI, PT and TDS automatically; attendance and shifts flow straight into the payroll run; and the reports needed for filing come out of the same system — with payslips and an audit trail for every cycle.
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