Payroll Compliance Checklist for Indian Companies: PF, ESI, Professional Tax, LWF and TDS
A month-by-month payroll compliance checklist for Indian employers covering PF, ESI, professional tax, labour...
Read articleZoho Payroll handles Indian statutory payroll compliance better than most competitors at its price point, PF, ESI, TDS, professional tax and gratuity all calculated and filed automatically. But if you skip the initial configuration, you'll generate non-compliant payslips that can trigger labour department scrutiny. This is the compliance checklist we use for every Zoho Payroll go-live.
Quick answer
Indian businesses using Zoho Payroll: a complete statutory compliance checklist covering PF, ESI, TDS, professional tax, gratuity and labour welfare fund.
PF (Provident Fund) configuration
Set your EPFO establishment number. Configure 12% employee + 12% employer contribution split (8.33% to EPS, 3.67% to EPF). Cap at ₹15,000 basic if you're using the statutory limit, or uncap if you contribute on full basic. Enable VPF (Voluntary PF) for employees who opt in.
| Component | Employee | Employer | Cap / Notes |
|---|---|---|---|
| EPF (Provident Fund) | 12% | 12% (8.33% EPS + 3.67% EPF) | On basic, capped at ₹15,000 if statutory |
| ESI | 0.75% | 3.25% | Salaries up to ₹21,000 |
| Professional Tax | Varies by state | , | MH/KA/WB/etc. each have own slabs |
| TDS | Per slab | , | Auto-calculated on declared 80C/80D |
| Gratuity | , | Tracked from joining date | Paid after 5 years |
ESI, professional tax and labour welfare fund
ESI: 0.75% employee + 3.25% employer for salaries up to ₹21,000. Configure your sub-code and dispensary. Professional tax varies by state, set the slab for each state where you have employees (Maharashtra, Karnataka, West Bengal etc. each differ). LWF (Labour Welfare Fund) applies in 16 states with state-specific contribution rules.
TDS, Form 16 and gratuity
Zoho Payroll auto-calculates monthly TDS based on declared investments (Section 80C, 80D, 80G etc.) and projected annual income. Generates Form 16 at year-end and Form 24Q quarterly returns ready for upload to TRACES. Gratuity is auto-tracked from joining date, actual liability shown live for completed-year employees.
Frequently Asked Questions
Does Zoho Payroll auto-file PF and ESI returns?
It generates the ECR file (PF) and ESI return ready for upload to EPFO unified portal and ESIC portal. Filing itself is one click on the government portals.
Can Zoho Payroll handle multi-state Indian operations?
Yes, configure per-state professional tax, LWF rules and minimum wages. Common scenario: HQ in Karnataka with branches in Tamil Nadu and Delhi, Zoho handles all three correctly.
How much does Zoho Payroll cost in India?
Free for up to 5 employees (limited features). Premium: ₹100/employee/month. Most SMBs run on Premium for ₹3,000,₹15,000/month for 30,150 employees.
