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Payroll for India

Payroll for India That Handles PF, ESI and TDS

Salaries, deductions and filings in a single run. Niyuk works out provident fund, employee state insurance, professional tax and income tax for every employee, in every state you operate in, and produces the challans and returns that have to follow.

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What is Payroll in India?

Payroll in India is the monthly job of turning attendance and salary structures into net pay, and then into the contributions and taxes the law asks for. It covers provident fund, employee state insurance, professional tax, income tax deducted at source, labour welfare fund and gratuity, and each one carries its own rate, its own due date and its own return.

What separates it from payroll anywhere else is how much of it is set by statute rather than by the company. The provident fund ceiling, the ESI wage threshold, the professional tax slab in each state and the tax regime an employee picked at the start of the year all decide the figure before anybody in HR does.

That is also why it goes wrong quietly. A rate that changed in April, a state you opened an office in, an employee who crossed the ESI threshold halfway through a contribution period: each one makes the month wrong without making it look wrong, and it usually surfaces in an inspection rather than on a payslip.

Capabilities

What Niyuk Works Out
on Every Indian Payroll Run

Eight statutory heads, one run.

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Provident Fund (PF)

Employee and employer shares at 12% each, the pension split inside the employer half, admin charges and the ECR file, all against the wage ceiling in force that month rather than one typed in last year.

Employee State Insurance (ESI)

Employees under the gross wage threshold are picked up automatically, stay covered to the end of the contribution period when they cross it, and come out when the rules say they do, not when somebody notices.

Professional Tax

Every state sets its own slabs and its own filing dates. Niyuk applies the one that matches where the employee actually works, not where the head office is registered.

Income Tax and TDS

Tax worked out under the regime each employee chose and re-projected every month as their pay changes, so nobody meets a deduction in March that nobody warned them about.

Form 16

The annual certificate each employee needs to file their return, built from the runs that already happened rather than assembled the following May, so it agrees with what was actually deducted.

Form 24Q

The quarterly return of tax deducted from salaries, prepared from those same runs, with the deductee details already matched against the challans that were paid.

Gratuity

Accrues from the joining date, so the liability is a number you already know before somebody resigns rather than one finance works out afterwards.

Labour Welfare Fund (LWF)

Deducted in the states that levy it and only in the months they ask for, which is twice a year in some states and once in others.

Why Niyuk

Why Payroll Teams
in India Choose Niyuk

The statutory part of the month stops being a separate job. Six things follow from that.

  • Statutory rates kept current
  • Every state you employ in
  • One run, every filing
  • Arrears recomputed properly
  • An audit trail on every change
  • Attendance feeds it directly
Comparison

Doing Indian Payroll by Hand
vs Doing It in Niyuk

Eight things that change when the deductions and the filings come off the same run.

Indian payroll done by hand compared with Niyuk
Every month A spreadsheet and a consultant Niyuk payroll for India Recommended What changes
Provident fund Carried over from last month Worked out at the current ceiling An April change cannot slip through
ESI eligibility Checked by hand Applied from gross wages Nobody is missed or kept in too long
Professional tax One state remembered Per state, per work location A new office does not break the run
Income tax Projected once a year Re-projected every month No one gets a shock deduction in March
Form 16 Assembled the following May Built as the year runs It is ready when it is due
Arrears and revisions Recalculated by hand Recomputed across months The difference can be explained
Challans and returns Prepared separately Produced from the same run The return matches what was paid
A month that is wrong Found at audit Flagged before approval You fix it while it is still cheap

How a Payroll Run
Works in India

Inputs close

Attendance, leave without pay, overtime, new joiners, exits and any reimbursement claims are locked for the month. Nothing after this point changes the run without leaving a record.

The salary structure applies

Each employee's CTC breaks into basic, allowances and the heads that the statutory calculations read, which is what makes the deductions below come out the same way twice.

Statutory deductions are worked out

Provident fund, ESI, professional tax and income tax are calculated per employee against the rules that apply to them: their wages, their state and the tax regime they chose.

The run is checked and approved

Anything unusual is flagged before anyone signs: a net pay that moved more than it should, an employee who has crossed a threshold, a deduction that did not apply last month and does now.

Salaries go out

The bank advice is produced from the approved run and payslips reach employees in the same pass, so what is paid and what is published cannot differ.

Filings and registers follow

Challans, the ECR, the quarterly return and the month's registers all come off the run that was approved, rather than being rebuilt from it afterwards.

Built for India

A Global Payroll Tool
vs One Built for India

Most payroll software can pay people. These are the seven places where paying them in India asks for something more.

A global payroll tool compared with payroll built for India
Where India differs A global payroll tool Niyuk, built for India Recommended Why it matters
Provident fund Not modelled EPF, pension and admin charges The split inside the employer share is statutory
ESI Not modelled Threshold and contribution periods Cover cannot lapse in the middle of one
Professional tax One rate, if any Slabs for each state The amount follows where the person works
Income tax A flat field to fill in Both regimes, projected monthly Employees choose, and some change their minds
Statutory returns Exported to a spreadsheet Form 24Q, Form 16 and the ECR The portal will only take its own format
Registers Built when somebody asks Kept as the month runs An inspection asks for a month, not a year
Gratuity A note held in finance Accrued per employee It is a liability, not a surprise
Industries

Built for Every Industry

Client Story

From a team that made the switch

“Niyuk HR cut payroll processing time by 90% for Applikon IT Solutions Pvt. Ltd.”
Rohit G Founder, Applikon IT Solutions Pvt. Ltd.

Ready to Stop Checking
Payroll by Hand?

One run that works out every deduction, produces every filing, and leaves a record you can show an auditor.

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Frequently
Asked Questions

The questions payroll teams ask before moving off a spreadsheet and a consultant.

Still have questions?

Talk to the team and we will walk you through it.

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Payroll for India covers the complete process of calculating and paying employee salaries while meeting applicable statutory requirements. This can include salary, deductions, Provident Fund (PF), Employee State Insurance (ESI), Professional Tax, income-tax deductions and TDS, along with payslips, payroll registers and statutory reports.

Payroll in India is the process of calculating employee earnings and deductions, processing salaries, and managing applicable statutory compliance. Depending on employee and employer eligibility, this may include PF, ESI, Professional Tax, TDS, gratuity and other statutory requirements.

An Indian payroll run typically starts with employee attendance, leave, salary and variable-pay data. The payroll system calculates gross salary, deductions and applicable statutory contributions, calculates net pay, generates payslips and prepares the required payroll reports and compliance records.

Provident Fund (PF) contributions are generally calculated as a percentage of eligible wages, subject to the applicable rules and wage limits. The employee and employer contributions are accounted for during payroll, and the applicable contribution information is used for statutory filing and reporting.

Employee State Insurance (ESI) is a social-security scheme that provides eligible employees with medical and other benefits. For employees and employers covered under ESI, payroll calculates the applicable employee and employer contributions based on the prevailing rules, eligibility and wage criteria.

Professional Tax (PT) is a state-level tax applicable in certain Indian states and is generally deducted from an employee's salary according to the applicable state's rules and salary slabs. The amount and applicability can therefore vary based on the employee's work location and the relevant state regulations.

Tax Deducted at Source (TDS) on salary is calculated by the employer based on the employee's taxable income and applicable income-tax rules, declarations and eligible deductions or exemptions. The calculated TDS is deducted from salary and deposited with the government, with the required reporting completed through the applicable tax forms.

Form 16 is a certificate issued by an employer to an employee showing salary income and the tax deducted at source during the financial year. It provides employees with information they can use when preparing their income-tax return.

Form 24Q is a quarterly TDS statement filed by employers for tax deducted from salaries. It contains details relating to salary payments and TDS deductions for employees and is submitted to the income-tax authorities through the prescribed process.

ECR stands for Electronic Challan cum Return. It is used by employers to submit Provident Fund contribution and employee-related information to the EPFO through the applicable electronic filing process. Payroll data can be used to prepare the information required for the ECR submission.

The PF contribution period refers to the period for which eligible employee and employer Provident Fund contributions are calculated and reported. Payroll processing uses the relevant salary and employee information for the applicable contribution period before the statutory contribution is deposited.

The ESI wage ceiling is the prescribed wage limit used to determine whether an employee falls within the coverage criteria of the Employees' State Insurance scheme, subject to applicable rules and exceptions. Employers should apply the current statutory threshold and eligibility requirements when processing payroll.

Yes. Payroll software can apply state-specific Professional Tax rules based on an employee's applicable work location and payroll information. This helps organisations calculate the appropriate deduction and maintain the relevant payroll records and reports.

Yes. Niyuk can generate employee payslips and payroll records as part of the payroll process. It helps organisations maintain payroll information, salary calculations, deductions and statutory data in one system, making payroll administration and reporting easier.

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