Security Agency Payroll Compliance - Complete Overview
📌 TL;DR - Security Agency Payroll Services at a Glance
Security agency payroll in India operates under a uniquely layered compliance architecture. A PSARA-licensed agency must simultaneously satisfy PSARA 2005 (licensing), CLRA 1970 (contractor licence and registers), Code on Wages 2019 (minimum wages and 50% basic rule), Social Security Code 2020 (EPF and ESI), OSH Code 2020 (overtime at double rate), IR Code 2020 (fixed-term guard gratuity after 1 year), and the Payment of Bonus Act. Patron Accounting manages this entire compliance landscape from Rs.3,999/month.
| Parameter | Requirement / Rate |
|---|---|
| Minimum Wages | State-specific for security guard categories; revised April and October; national floor wage under Code on Wages 2019 |
| EPF | Employer 12% + Employee 12% of basic + DA; mandatory for agencies with 20+ employees; deposit by 15th each month |
| ESI | Employer 3.25% + Employee 0.75%; workers earning up to Rs.21,000/month; mandatory 10+ employees |
| Overtime | OSH Code 2020: beyond 8 hours/day or 48 hours/week = overtime at twice the ordinary rate; Form B register mandatory |
| Bonus | Payment of Bonus Act: minimum 8.33% of annual wages (max 20%); workers earning up to Rs.21,000/month |
| Gratuity | IR Code 2020 (Nov 2025): fixed-term guards eligible after 1 year; 15 days salary per year; capped at Rs.20 lakh |
| GST | Security agency (body corporate): 18% GST under forward charge; non-body corporate with registered client: RCM applies |
Code on Wages 2019. The resulting EPF base increase is significant when multiplied across thousands of guards. Fixed-term deployment contracts - the industry's preferred model for site-specific guard postings - now trigger gratuity eligibility after just one year under the Industrial Relations Code 2020.
Paper muster rolls and wage registers are no longer accepted under OSH Code 2020; digital records are mandatory and subject to remote web-based inspection. The Income Tax Act 2025, effective April 1, 2026, revises Form 24Q and Form 16 formats. Patron Accounting's CA team manages this entire compliance landscape, so security agency owners can focus on winning contracts and deploying guards - not navigating multi-statute payroll filings.
Content is reviewed quarterly for accuracy.