Payroll in India is not just paying salaries - it is four separate statutory deductions, each with its own rate, threshold, deposit deadline and return. Get one deadline wrong and the penalties and interest add up fast. This guide covers the four pillars of payroll compliance: TDS on salary, EPF, ESI and professional tax.
If you would rather automate it, Regikart's accounting and payroll team runs end-to-end payroll with monthly compliance. Start there or contact us.
1. TDS on salary (Section 192)
Every employer must deduct tax at source on salary if an employee's taxable income exceeds the basic exemption limit. Unlike other TDS sections there is no flat rate - you estimate the employee's annual tax (under their chosen regime) and deduct one-twelfth each month.
You deposit the TDS by the 7th of the following month, file the quarterly return in **Form 24Q**, and issue **Form 16** to each employee by 15 June after the financial year ends.
2. EPF (Employees' Provident Fund)
EPF applies to establishments with 20 or more employees. Both employee and employer contribute **12% of basic + dearness allowance**. The employee's 12% goes fully to PF; of the employer's 12%, 8.33% goes to the pension scheme (EPS) and the balance to PF.
3. ESI (Employees' State Insurance)
ESI applies to establishments with 10 or more employees and covers employees earning up to ₹21,000 per month (₹25,000 for employees with disability). The employee contributes **0.75%** and the employer **3.25%** of gross wages. ESI dues are deposited monthly by the 15th.
4. Professional tax (state-wise)
Professional tax is levied by individual states (not all states impose it), so the slabs and due dates differ by state - for example Maharashtra, Karnataka, West Bengal and Tamil Nadu each have their own rates, capped at ₹2,500 per year by law. The employer deducts it from salary and deposits it with the state, with monthly or annual returns depending on the state.
The monthly compliance calendar
| Deduction | Rate | Deposit by | Return |
|---|---|---|---|
| TDS on salary | As per slab (Sec 192) | 7th of next month | 24Q (quarterly), Form 16 annual |
| EPF | 12% + 12% | 15th of next month | Monthly ECR |
| ESI | 0.75% + 3.25% | 15th of next month | Half-yearly return |
| Professional tax | State slabs (max ₹2,500/yr) | Per state rule | Per state rule |
Let Regikart run your payroll
Regikart's accounting and payroll service processes salaries, computes and deposits TDS, EPF, ESI and professional tax, files the returns and issues Form 16 - so you never miss a deadline. Explore advisory and certification for related compliance, or contact us / WhatsApp +91 70444 94804 (Mon–Sat, 9 am–7 pm IST).
About the author
Rohit
Senior Advisor at Regikart. Want to discuss this in the context of your business?
