End-to-end salary computation

Category: Payroll & HR Compliance. From ₹50/emp/mo. Typical timeline: Monthly.

Overview

Payroll processing is the monthly computation and disbursement cycle that turns attendance and salary structure into net pay, statutory deductions, and compliant payslips for every employee on a company's rolls. It covers gross-to-net calculation, PF, ESI, professional tax and TDS deduction, and generation of payslips and statutory reports, replacing manual spreadsheet-based salary runs that are error-prone at any meaningful headcount.

Who needs it

• Growing businesses that have outgrown manual, spreadsheet-based salary computation
• Companies needing PF, ESI and professional tax deducted and reported accurately every month
• Organisations wanting timely, error-free payslips and payroll registers for their workforce
• Businesses managing employees across multiple states with differing professional tax rates

Eligibility

• Any registered business employing staff, from a handful of employees to large workforces
• Companies needing statutory-compliant salary computation covering PF, ESI, professional tax and TDS
• Organisations wanting payslips, Form 16 support and payroll MIS generated each cycle

Documents required

• Employee master data — salary structure, PAN, bank account, PF/ESI numbers
• Monthly attendance and leave data
• Details of new joinees, exits and salary revisions for the month
• Investment declarations for TDS computation on salary
• Reimbursement claims and variable pay/bonus details, where applicable

Process

1. Employee master setup — Capture employee salary structure, statutory numbers and bank details in the payroll system.
2. Attendance and input collection — Gather monthly attendance, leave, new joinee/exit and revision data.
3. Payroll computation — Compute gross-to-net salary along with PF, ESI, professional tax and TDS deductions for each employee.
4. Review and approval — Share the payroll register with management for review and sign-off before disbursement.
5. Disbursement and reporting — Process salary disbursement and generate payslips, along with statutory reports for PF/ESI/TDS filing.

Government fees

• Government fee: Not applicable — payroll processing carries no direct government fee; actual PF/ESI/TDS/PT payments are separate statutory obligations

Professional fee

Professional fee starts at ₹50 per employee per month for end-to-end payroll processing including statutory deduction computation and payslip generation, with volume-based discounts for larger headcounts.

Timeline

A monthly payroll cycle is typically completed within 3-5 working days from receipt of complete attendance and input data, timed to meet the client's chosen salary disbursement date.

Deliverables

• Monthly payroll register and payslips for all employees
• PF, ESI, professional tax and TDS computation reports ready for statutory filing
• Full and final settlement computation for exiting employees
• Annual Form 16 support at year-end

Frequently asked questions

Can payroll processing handle employees across multiple states?

Yes — professional tax rates and slabs differ by state, and the payroll system is configured to apply the correct state-wise rules for each employee.

Does payroll processing include PF and ESI return filing?

Payroll processing computes the deductions and prepares the data needed; the actual PF ECR and ESI return filing are typically bundled in as part of a combined payroll compliance engagement.

How are salary revisions or bonuses handled mid-cycle?

Salary revisions, arrears and bonus payouts are incorporated into the same month's payroll run once the finalised figures and effective dates are provided.

Common mistakes

• Missing investment declaration deadlines, leading to higher TDS deduction than necessary during the year
• Not updating professional tax slabs when an employee's work location changes state
• Delaying input collection, compressing the payroll computation and review window before disbursement
• Failing to process full and final settlement correctly for exiting employees, leading to compliance and payslip disputes

Penalties for non-compliance

• Interest and damages under EPF/ESI laws for delayed statutory contribution stemming from delayed payroll processing
• Employee dissatisfaction and potential labour disputes from delayed or inaccurate salary disbursement
• TDS short-deduction on salary can attract interest under Section 201 for the employer

Legal references

• Payment of Wages Act, 1936 — timely disbursement of wages
• Employees' Provident Funds and Miscellaneous Provisions Act, 1952
• Employees' State Insurance Act, 1948
• Income Tax Act, 1961, Section 192 — TDS on salary