What is the difference between payroll processing and payroll management?

Payroll processing refers specifically to the monthly cycle of computing gross salary, deductions, and net pay and disbursing salaries. Payroll management is the broader function including statutory registration and compliance (PF, ESI, TDS, PT), return filing, year-end Form 16, F&F settlements, and CTC structure advisory. Patron Accounting provides both as a single integrated managed service.

Is outsourcing payroll to a CA firm better than using payroll software?

Payroll software automates calculations but cannot optimise tax regimes, catch misclassified perquisites, flag PT deadline changes, or process a compliant F&F within 2 working days. CA-managed outsourcing combines automated accuracy with professional review and regulatory awareness. For a 50-person company, in-house payroll costs typically exceed outsourcing to Patron Accounting.

What are mandatory statutory deductions from an Indian employee's salary?

Statutory deductions include: (a) EPF - 12% of Basic+DA; (b) ESI - 0.75% of gross for employees earning up to Rs 21,000/month; (c) TDS - income tax at applicable slab rate under Income Tax Act 2025; (d) Professional Tax - state-specific, max Rs 2,500/year; (e) Labour Welfare Fund - state-specific in applicable states. Employer also contributes 12% EPF, 3.25% ESI, and accrues gratuity.

What is the 50% basic wage rule and how does it affect payroll?

The Code on Wages 2019 (active November 2025) requires that basic wages must be at least 50% of total CTC. This prevents low-basic/high-allowance structures that minimise PF liability. For example, if CTC is Rs 50,000/month, Basic+DA must be at least Rs 25,000 - making minimum EPF contribution Rs 3,000/month each from employee and employer.

What is the F&F settlement 2-working-day rule?

Under the New Wage Code (active November 2025), employers must settle all salary dues within 2 working days of an employee's exit. This requires real-time payroll readiness - companies cannot wait for the regular monthly cycle. Patron Accounting maintains a standing F&F workflow activated the same day an exit is confirmed.

How does the Income Tax Act 2025 affect payroll?

The Income Tax Act 2025 replaces the 1961 Act from April 1 2026. For payroll, it retains TDS on salary at applicable slab rates but introduces updated Form 24Q and Form 16 formats and stricter audit trail requirements. Payroll systems must be updated before the April 2026 cycle. Patron Accounting has fully implemented ITA 2025.

What statutory records must employers maintain under the November 2025 Labour Codes?

Employers must maintain fully digitalised wage registers, attendance registers, muster rolls, PF and ESI contribution records, payslips, LWF records, and statutory challans. All records must be retained for 7 years minimum and available for inspection without prior notice. Failure to produce digital records attracts adverse findings and penalties.

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Payroll Processing and Management Services in India

Q: Payroll outsource kaise karein India mein?

Patron Accounting se payroll outsource karna simple hai. Aapko employee data (PAN, Aadhaar, UAN, bank details), salary structure, aur attendance records dena hota hai. Hum complete setup karte hain - EPFO, ESIC, TAN, PT registrations se lekar monthly payslip, TDS, PF, ESI deposits, Form 24Q filing, aur year-end Form 16 tak sab handle karte hain. Fee Rs 149 per employee se shuru hoti hai. Quick Answers Q: EPF rate? A: 12% employee + 12% employer of Basic+DA. Deposit by 15th monthly. [EPF Act 1952] Q: ESI rate? A: 0.75% employee + 3.25% employer. Applicable for gross up to Rs 21,000/month. Deposit by 15th. Q: TDS deposit deadline? A: 7th of following month under Income Tax Act 2025 (from April 2026). Q: Salary payment deadline? A: 7th of following month for under 1,000 employees. [Code on Wages 2019] Q: F&F settlement deadline? A: Salary dues within 2 working days of exit. [New Wage Code, November 2025] Q: Form 16 deadline? A: To all employees by June 15 annually. Form 24Q quarterly: 31 Jul, 31 Oct, 31 Jan, 31 May.

Reviewed by CA and CS Team, Patron Accounting LLP ICAI & ICSI Registered| 15+ Years Experience| Last Updated: 11 March 2026 Verify Credentials →

End-to-End Monthly Payroll: Attendance to payslip to bank disbursement by the 7th of each month as mandated under the Code on Wages 2019.

Statutory Compliance: PF (12%+12%), ESI (0.75%+3.25%), TDS under Income Tax Act 2025, Professional Tax, and Labour Welfare Fund - all deposits and returns managed.

F&F in 2 Working Days: Full-and-final settlement within 2 working days of employee exit per New Wage Code requirement.

Labour Code Ready: All four national Labour Codes (November 2025), 50% basic rule, and digital record-keeping mandates fully implemented.

500+ companies and 20,000+ employees under Patron Accounting managed payroll with 15+ years zero-penalty track record.

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Real Stories from Real People

Hear how teams across industries use Patron to save time, cut costs, & stay in control.

“

We moved our payroll of 280 employees to Patron Accounting after our in-house team struggled with the new Labour Code requirements. Within one month, everything was in order - payslips accurate, PF and ESI filed on time, and our F&F processing is now done within 2 days of exit.

Sudhir Deshmukh

HR Director, Manufacturing Company, Pune

★★★★★

2 months ago

“

Patron Accounting handles our payroll across 6 states. The PT and LWF compliance alone was a nightmare in-house. They have a state-wise matrix and never miss a deadline. The monthly MIS report is a bonus for our finance team.

Anuradha Joshi

CFO, Retail Chain, Mumbai

★★★★★

3 months ago

“

As a GCC with 120 India employees, we needed a CA firm that understood both Indian payroll law and cross-border salary components. Patron got our DTAA-based TDS right from month one and handles our expat payroll seamlessly.

Mark Reynolds

India Country Head, Technology GCC, Bangalore

★★★★★

1 month ago

“

We switched from payroll software to Patron Accounting's managed service after our previous provider missed a PT deadline in Karnataka. The software calculated correctly but nobody filed. With Patron, filing is guaranteed - 15 years zero-penalty speaks for itself.

Kavita Nair

Founder, EdTech Startup, Delhi NCR

★★★★★

4 months ago

“

Started with 12 employees and Patron has scaled with us to 350. Never had to renegotiate or change providers. The monthly payroll MIS and year-end Form 16 reconciliation are consistently perfect. Best payroll decision we made.

Rohit Patil

CEO, Healthcare Services, Pune

★★★★★

2 months ago

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Overview What Is Who Needs Our Services Process Documents Challenges Fees Calendar Benefits In-House vs Outsource FAQs

Payroll Processing and Management - Quick Reference for 2026

📌 TL;DR - Payroll Processing and Management Services at a Glance

Payroll processing and management in India has never been more regulated. With all four national Labour Codes active since November 2025, the Income Tax Act 2025 replacing the 1961 Act from April 1 2026, the 50% basic wage rule live, mandatory digital record-keeping, and F&F settlements required within 2 working days of exit - the compliance burden on any in-house payroll team has increased substantially. Patron Accounting handles everything from attendance to payslip to bank disbursement, starting at Rs 149 per employee.

A single missed deadline or miscalculated deduction can now attract penalties of Rs 200/day, interest at 12% per annum, and in serious cases, prosecution. For businesses that want accurate, timely, penalty-free payroll every month, outsourcing to Patron Accounting is the clear operational choice.

Parameter	Key Detail
EPF Contributions	12% employee + 12% employer of Basic+DA. Mandatory for 20+ employees. Deposit by 15th monthly. [EPF Act 1952, Section 1(3)(a)]
ESI Contributions	0.75% employee + 3.25% employer. Applies to employees earning up to Rs 21,000/month gross. Mandatory for 10+ employees. [ESI Act 1948]
TDS on Salary	Deducted under Income Tax Act 2025 (effective 1 April 2026). At applicable slab rate per employee's tax regime choice. Deposit by 7th monthly.
Professional Tax (PT)	State-specific levy; max Rs 2,500/year. Applicable in Maharashtra, Karnataka, West Bengal, Tamil Nadu, and others.
Salary Payment Deadline	By 7th of following month (under 1,000 employees) or 10th (1,000+ employees). [Code on Wages 2019]
F&F Settlement Deadline	Within 2 working days of employee exit for salary dues. [New Wage Code, November 2025]
Digital Records	Mandatory 7-year retention of all wage registers, payslips, attendance logs, and statutory challans. [November 2025 Labour Codes]
Starting Price	Rs 149 per employee per month (Patron Accounting LLP)

Content is reviewed quarterly for accuracy.

What Is Payroll Processing and Management?

Payroll processing and management is the complete monthly operational cycle of computing employee compensation - from raw attendance and leave data to gross salary, statutory deductions (PF, ESI, TDS, PT, LWF), net salary disbursement, payslip issuance, statutory contributions deposit, and all government return filings - executed accurately, on time, and in full compliance with India's central and state labour and tax laws.

Under the Code on Wages 2019 (active November 2025), Basic Pay must be at least 50% of total CTC. This directly affects the PF contribution base and prevents employers from structuring low basic / high allowance CTC to minimise PF contributions.

The Income Tax Act 2025 (effective April 1 2026) replaces the Income Tax Act 1961, updating TDS calculation methods, Form 24Q formats, and Form 16 generation requirements for all employers.

Key Terms for Payroll Processing and Management:

Gross Salary: Sum of all earnings including Basic Pay, HRA, DA, LTA, Special Allowance, bonuses, reimbursements, and arrears. Basic Pay must be at least 50% of total CTC under the Code on Wages 2019.

Statutory Deductions: EPF (12% of Basic+DA), ESI (0.75% of gross if eligible), Professional Tax (state-specific), TDS at applicable income tax slab rate, and Labour Welfare Fund.

Net Salary (Take-Home): Gross salary minus all employee-side deductions. Disbursed by bank transfer by the 7th of following month.

F&F Settlement: Full-and-final settlement of all salary dues within 2 working days of exit per New Wage Code (November 2025).

Form 16: Annual TDS certificate issued to employees by June 15 showing total salary, deductions, and tax paid during the financial year.

Managed Payroll PF, ESI, TDS, Form 16

Who Needs Managed Payroll Processing in India?

Payroll compliance obligations arise the moment a business makes its first hire in India. The complexity scales with employee count, salary diversity, geographic spread, and workforce composition. Patron Accounting's managed payroll service covers:

Startups and SMEs (1-50 employees): Avoiding non-compliance penalties from day one; correct PF and ESI registration at the right thresholds; TDS from first eligible hire; and salary structure design compliant with the 50% basic wage rule.
Growing Mid-Market Companies (50-500 employees): Multi-state PT compliance, variable pay processing (bonuses, commissions, incentives), mid-cycle salary revisions with arrear computation, and inspection-ready digital registers.
Large Enterprises and Corporates (500+ employees): High-volume payroll across multiple locations and states; complex salary bands; contractual and third-party workforce payroll management; integration with HRMS/ERP systems.
Foreign Companies with Indian Operations: Payroll compliance under Indian law for India-based employees; DTAA-based TDS optimisation for expat staff; FEMA compliance for cross-border salary components.
Companies Transitioning from In-House to Outsourced Payroll: Migration of existing employee data and historical payroll records; gap audit of past compliance; immediate takeover of monthly processing cycle.

Statutory Registration Thresholds:

TAN: From first employee whose annual salary exceeds the income tax exemption threshold. [Section 203A, Income Tax Act 2025]
EPFO Registration: When headcount reaches 20 or more employees. [Section 1(3)(a), EPF and MP Act 1952]
ESIC Registration: When headcount reaches 10 or more employees. [Section 2(12), ESI Act 1948]
Professional Tax Registration: Required in applicable states as soon as any employee is on payroll.

6 Payroll Processing and Management Services by Patron Accounting

Service	What We Do
Payroll Setup and CTC Structure Design	Employee data onboarding, CTC breakdown with Basic >= 50% of CTC (Code on Wages 2019), tax regime advisory, Form 12BB collection, and all statutory registrations (EPFO, ESIC, TAN, PT).
Monthly Payroll Processing	Attendance validation, gross salary computation, all statutory deductions (EPF, ESI, TDS, PT, LWF), net salary calculation, payslip generation, and bank salary upload file preparation.
Statutory Contribution Deposits	EPF and ESI by 15th, TDS by 7th, PT per state schedule, LWF per state calendar - all deposits managed with built-in deadline buffers.
Statutory Return Filing	Monthly EPF ECR through EPFO Unified Portal, quarterly Form 24Q under Income Tax Act 2025, half-yearly ESI Form 5, and state-wise PT returns.
Full-and-Final Settlement (F&F)	Exit processing within 2 working days per New Wage Code - unpaid salary, leave encashment, gratuity, reimbursements, TDS on F&F, and Form 16 issuance.
Year-End Compliance	Form 16 Parts A and B by June 15, Form 26AS reconciliation, gratuity provision computation, statutory bonus calculation under Payment of Bonus Act 1965.

Our Process

10-Step Monthly Payroll Processing Cycle

Our CA team follows this systematic monthly cycle for every client - from data collection on the 20th to statutory filing by the 15th of the following month. Each step is documented and verified.

Step 1

Pre-Payroll Setup (One-Time)

Collect all employee master data (PAN, Aadhaar, UAN, bank account). Design CTC structure with Basic >= 50% of CTC per Code on Wages 2019. Complete all statutory registrations - EPFO, ESIC, TAN, and PT across all applicable states.

CTC structure designed Registrations complete

Setup Complete 01

Step 2

Monthly Input Collection (by 20th)

Receive approved attendance data, leave records, variable pay approvals, reimbursement claims, mid-month joinings or exits, and salary revision letters effective that month.

Attendance validated Variables collected

Data Collected 02

Step 3

Payroll Computation (by 22nd)

Calculate gross salary per employee. Apply statutory deductions: EPF (12%), ESI (0.75%), TDS under Income Tax Act 2025, PT per state slab, LWF per state schedule, and voluntary deductions. Compute net take-home salary.

Gross-to-net computed All deductions applied

Net Pay Ready 03

Step 4

Payroll Validation (by 23rd)

Cross-verify payroll output against previous month. Check new joiner and exit calculations. Validate TDS projections for the full year. Reconcile totals against approved headcount and salary budgets.

Anomalies flagged TDS projections verified

Verified Clean 04

Step 5

Approval and Disbursement (by 28th)

Present payroll summary to authorised signatory. Prepare NEFT bank salary file. Submit to company's bank. Confirm salary credit by the 7th of following month per Payment of Wages Act 1936.

Client sign-off Bank file submitted

Salaries Credited 05

Step 6

Statutory Deposits (by 7th and 15th)

Deposit TDS by the 7th. Deposit EPF (12%+12%) and ESI (0.75%+3.25%) by the 15th. Deposit PT as per state deadlines. All deposits with built-in deadline buffers.

TDS by 7th PF/ESI by 15th

Deposits Done 06

Step 7

Return Filing (Monthly/Quarterly)

File EPF ECR monthly through EPFO Unified Portal. File Form 24Q quarterly under Income Tax Act 2025. File ESI half-yearly return (Form 5). File state PT returns per schedule.

ECR filed 24Q filed

Returns Filed 07

Step 8

F&F Settlement (within 2 working days)

Upon exit confirmation, compute all outstanding dues: unpaid salary, leave encashment, gratuity, reimbursements, and TDS. Process bank transfer and issue F&F payslip within the mandatory 2-working-day window per New Wage Code.

F&F in 2 days TDS adjusted

Exit Settled 08

Documents Required for Payroll Onboarding

Keep the following documents ready for a smooth payroll transition:

Company PAN and TAN (Tax Deduction Account Number)
EPFO Establishment Code and ESIC Employer Code (or documents for fresh registration)
Professional Tax Registration Certificates for all applicable states
PAN, Aadhaar, UAN, and bank account details for all employees
Employment contracts, appointment letters, and current salary structures
Investment declarations (Form 12BB) from all employees opting for old tax regime
Attendance and leave records for the first processing month
Previous payroll data, TDS challans, and Form 16 (if migrating from another provider)
Authorised signatory details and bank mandate for statutory payment transfers

Common Payroll Challenges and How Patron Accounting Resolves Them

Challenge	Impact	How Patron Accounting Solves It
Regulatory Changes - Labour Codes 2025 and Income Tax Act 2025	In-house teams and generic software lag behind the most significant payroll reforms in decades	CA team has fully implemented all four Labour Code requirements and Income Tax Act 2025 provisions. Zero-disruption transition with compliance update briefing each financial year.
F&F Settlement Within 2 Working Days	Companies processing F&F manually or in batches cannot meet the new 2-working-day deadline	Standing F&F computation template for each client. Calculation initiated same day as exit notification. Bank transfer instructions within 1 working day.
Multi-State PT and LWF Complexity	Different PT slabs, payment frequencies, and LWF structures across states cause missed deadlines	Internal state-compliance matrix updated every financial year. All state-level filings tracked independently. Consolidated compliance calendar provided annually.
Payroll Data Security and Confidentiality	Mishandled salary data creates legal exposure under DPDPA 2023	Secured, access-controlled systems with role-based access. No unencrypted transmission. Data archived per 7-year statutory retention requirement.

Payroll Processing and Management Fees

Fee Component	Amount
Starter Package (up to 10 employees)	Rs 3,000 - Rs 5,000/month
Growth Package (11-50 employees)	Rs 5,000 - Rs 10,000/month
Professional Package (51-150 employees)	Rs 10,000 - Rs 20,000/month
Scale Package (151-500 employees)	Rs 20,000 - Rs 40,000/month
Enterprise (500+ employees)	Custom pricing with dedicated CA team
Compliance Catch-Up (any size)	Rs 8,000 - Rs 25,000 one-time
Patron Accounting Professional Fees	Starting from INR 149 per employee (Exl GST and Govt. Charges)

All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.

Professional service charges for drafting, filing, and representation are separate from the statutory fees. The exact fee depends on the complexity of the case, disputed amount, and number of hearings required. Contact us for a detailed quote.

Get a free Payroll Processing and Management consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

Monthly Payroll Processing Calendar

Stage	Estimated Timeline
Employee data and input collection cutoff	20th of current month
Payroll computation and gross-to-net calculation	20th to 22nd
Payroll validation and anomaly resolution	22nd to 23rd
Client approval of payroll summary	24th
Bank salary file submission	24th to 28th
Employee salary credited to bank accounts	By 7th of following month (mandatory)
TDS deposit (ITNS 281)	By 7th of following month
EPF and ESI contribution deposit	By 15th of following month
EPF ECR filing	Monthly through EPFO Unified Portal
Form 24Q (quarterly TDS return)	31 Jul, 31 Oct, 31 Jan, 31 May
ESI half-yearly return (Form 5)	Nov 11 and May 11
Form 16 issuance to all employees	By June 15 each year

Important: This calendar is followed for every client, every month, with built-in deadline buffers. TDS deposit (7th) and PF/ESI deposit (15th) are non-negotiable statutory deadlines - late deposits attract 12% per annum interest and damages of 5-25% under EPF Act Section 14B.

Key Benefits

Why Businesses Outsource Payroll to Patron Accounting

Zero Penalty Guarantee

Every statutory deposit and filing is calendar-driven with built-in buffers. In 15+ years, Patron Accounting has never caused a client to incur a late filing penalty under our management.

Regulatory Readiness

Labour Codes (November 2025), Income Tax Act 2025 (April 2026), 50% basic rule, F&F 2-working-day rule, and digital records mandate - all implemented and live in our payroll processes.

CA-Level Expertise

Payroll is processed and reviewed by Chartered Accountants. TDS optimisation, tax regime advisory, and gratuity/bonus computation accuracy come as standard, not premium add-ons.

Data Security

Payroll data handled under strict access controls, encrypted transmission, and DPDPA 2023-aligned data handling practices. Employee financial data stays confidential.

Multi-State Ready

PT and LWF compliance across Maharashtra, Karnataka, West Bengal, Tamil Nadu, and all other states with an internal state-compliance matrix updated annually.

Scalability

Whether you add 5 employees or 500, Patron Accounting's payroll service scales without disruption, renegotiation, or additional lead time. From startup to enterprise.

Trusted by 500+ Indian Businesses for Over 15 Years

4 Offices Across India: Pune (Head Office), Mumbai, Bangalore, Delhi NCR - ensuring local expertise with national payroll coverage.

500+ Companies with Managed Payroll: Across IT, manufacturing, healthcare, education, retail, and financial services sectors.

20,000+ Employees under Patron Accounting Payroll: From startups with 5 employees to enterprises with 1,000+ - all processed with the same CA-level accuracy.

15+ Years Zero-Penalty Track Record: Not a single client has incurred a late filing penalty under Patron Accounting's managed payroll service.

12,000+ Statutory Filings Annually: EPF ECR, Form 24Q, ESI Form 5, PT returns, and LWF contributions - all managed on time, every time.

In-House Payroll vs Patron Accounting Managed Payroll

Parameter	In-House / DIY	Patron Accounting
Labour Code 2025 + ITA 2025 Updates	Often delayed; software update dependency	Immediately implemented; zero gap
F&F within 2 Working Days	Operationally very difficult in-house	Standard process - 1 working day to compute
Multi-State PT and LWF	High miss rate; each state tracked manually	State matrix updated annually; auto-filed
TDS Accuracy (Old vs New Regime)	Employee self-declares; employer often applies incorrectly	CA-reviewed regime comparison per employee
Payroll Data Security	Spreadsheets, email - high breach risk	Role-based access; encrypted; DPDPA-aligned
Statutory Register Maintenance	Often incomplete or paper-based	Digital, 7-year compliant archives
Penalty Exposure	High - missed deadlines frequent	Negligible - deadline-buffer calendar in place
Cost (all-in: staff + software + filing)	Rs 40,000 - Rs 2,00,000/month depending on size	Rs 3,000 - Rs 40,000/month managed fee

Related Services from Patron Accounting

Patron Accounting offers a comprehensive suite of payroll-adjacent compliance services:

Payroll Services (Overview) - Industry-specific payroll services for IT, healthcare, education, manufacturing, and retail sectors.
ESIC Calculation and Compliance - Dedicated ESIC registration, contribution calculation, and half-yearly return filing services.
Provident Fund Registration - EPFO establishment code registration, UAN generation, and ongoing PF compliance.
TDS Return Filing - Quarterly Form 24Q/26Q filing, Form 16 generation, and TRACES reconciliation.
Gratuity Calculations and Compliance - Gratuity provision computation, fund management, and Payment of Gratuity Act compliance.
Income Tax Return Filing - ITR filing for salaried employees with Form 16 integration and refund processing.

Legal Framework for Payroll Processing in India

Code on Wages 2019 (November 2025 Implementation): Consolidates four wage-related laws. Key payroll implications: (a) Basic wages must be at least 50% of total remuneration - directly affects PF contribution base. (b) Wages must be paid by the 7th (under 1,000 employees) or 10th (1,000+ employees). (c) F&F settlement within 2 working days of exit. [Source: Code on Wages 2019, Sections 2(y), 17, and 23]

EPF and MP Act 1952: Mandatory for 20+ employees. Employee contribution: 12% of Basic+DA. Employer: 12% (8.33% to EPS capped at Rs 15,000 basic + 3.67% to EPF). Monthly ECR through EPFO Unified Portal. Deposit by 15th monthly. Penalty for late deposit: interest at 12% per annum (Section 7Q) plus damages of 5-25% under Section 14B.

ESI Act 1948: Applicable to establishments with 10+ employees where employees earn up to Rs 21,000/month gross. Employee: 0.75% of gross. Employer: 3.25% of gross. Deposit by 15th monthly. Form 5 by November 11 and May 11. Penalty: 12% per annum interest plus prosecution.

Income Tax Act 2025 (Effective April 1 2026): Replaces the Income Tax Act 1961. TDS on salary at applicable slab rate. Deposit by 7th of following month. Form 24Q quarterly. Form 16 by June 15 annually. Updated formats and stricter audit trail requirements.

Payment of Gratuity Act 1972: Payable after 5 years continuous service (1 year for fixed-term contracts post-2018). Formula: 15 days x last drawn salary / 26 x completed years. Maximum tax-exempt: Rs 20,00,000 under Income Tax Act 2025.

Payment of Bonus Act 1965: Applicable for 20+ employees. Mandatory for employees earning up to Rs 21,000/month. Minimum 8.33% of annual wages; maximum 20%. Payable within 8 months of close of accounting year.

Obligation	Deadline	Penalty for Default
Salary disbursement	7th / 10th of following month	Payment of Wages Act violation; labour authority action
TDS deposit on salaries	7th of following month	Interest 1.5%/month; penalty up to TDS amount under ITA 2025
EPF contribution deposit	15th of following month	Interest 12% p.a. (Section 7Q); damages 5-25% under Section 14B
ESI contribution deposit	15th of following month	12% p.a. interest; prosecution under ESI Act 1948
Form 24Q quarterly TDS return	31 Jul, 31 Oct, 31 Jan, 31 May	Rs 200/day late fee under ITA 2025; minimum equal to TDS amount
Form 16 issuance	By June 15 annually	Rs 100/day penalty under ITA 2025
F&F salary dues settlement	Within 2 working days of exit	Code on Wages 2019 violation; labour dispute

Frequently Asked Questions - Payroll Processing and Management

Find answers about payroll outsourcing, statutory deductions, Labour Codes 2025, Income Tax Act 2025, and compliance requirements.

Quick Answers

Q: EPF rate? A: 12% employee + 12% employer of Basic+DA. Deposit by 15th monthly. [EPF Act 1952]

Q: ESI rate? A: 0.75% employee + 3.25% employer. Applicable for gross up to Rs 21,000/month. Deposit by 15th.

Q: TDS deposit deadline? A: 7th of following month under Income Tax Act 2025 (from April 2026).

Q: Salary payment deadline? A: 7th of following month for under 1,000 employees. [Code on Wages 2019]

Q: F&F settlement deadline? A: Salary dues within 2 working days of exit. [New Wage Code, November 2025]

Q: Form 16 deadline? A: To all employees by June 15 annually. Form 24Q quarterly: 31 Jul, 31 Oct, 31 Jan, 31 May.

Payroll Is Too Important to Manage Casually - Start Today

India's payroll compliance landscape has fundamentally changed in 2025-26. Four Labour Codes are active. The Income Tax Act 2025 comes into force April 1 2026. F&F must be settled in 2 working days. Digital registers must be maintained for 7 years. Basic salary must be 50% of CTC.

A salary error erodes employee trust and drives attrition. A compliance failure invites penalties (Rs 200/day late fee, 12% per annum interest), regulatory notices, and in serious cases, prosecution of directors and officers.

Action: Call +91 945 945 6700 or WhatsApp us for a free payroll health check and transition assessment.

Move to Accurate, Penalty-Free Managed Payroll

Payroll is the single interaction every employee has with their employer every month. A salary error, delayed payment, or missing payslip erodes trust and drives attrition. A compliance failure invites penalties, regulatory notices, and prosecution.

For businesses that partner with Patron Accounting, the 2026 payroll compliance environment is a non-event - handled with CA precision, every month, on time, with zero surprises. 500+ companies and 20,000+ employees trust us for their payroll. Starting at Rs 149 per employee.

Contact us for a free payroll health check and transition assessment. Our team will audit your current payroll compliance, identify gaps, and provide a custom quote within 24 hours.

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Content Created: 11 March 2026 | Last Updated: 11 March 2026 | Next Review: June 2026 | Reviewed By: CA & CS Team, Patron Accounting LLP

This page is reviewed every 3 months. Content is aligned with the four Labour Codes (active November 2025), Income Tax Act 2025 (effective April 1 2026), EPF Act 1952, ESI Act 1948, and Code on Wages 2019. Next scheduled review: June 2026.

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