What is TDS on salary and when must it be deposited by employers?

TDS on salary (Section 192 of the Income Tax Act) is deducted by employers at the time of salary payment. The rate depends on the employee's estimated annual income and applicable tax slab. It must be deposited with the government by the 7th of the following month. Quarterly Form 24Q TDS returns must be filed by 31st July, 31st October, 31st January, and 31st May. Form 16 (TDS certificate) must be issued to all employees by 15th June annually. Late TDS deposit attracts interest at 1.5% per month plus ₹200/day late fee under Section 234E.

How is payroll outsourcing priced by TAXAJ?

TAXAJ payroll outsourcing is priced based on employee headcount. Plans start from ₹1,999/month for up to 10 employees (Starter), ₹3,499/month for 11–25 employees (Growth), ₹5,999/month for 26–50 employees (Scale), and custom pricing for 50+ employees (Enterprise). All plans include full statutory compliance covering EPF, ESI, TDS, and professional tax; monthly payslips; bank transfer file; and Form 16 annually. No minimum contract period.

How is gratuity calculated and when is it mandatory?

Under the Payment of Gratuity Act, 1972, gratuity is mandatory for all establishments with 10 or more employees. An employee who completes 5 years of continuous service becomes eligible. Gratuity is calculated as: (Last drawn basic salary × 15 × years of service) ÷ 26. The maximum tax-free gratuity limit is ₹20 lakh. Gratuity must be paid within 30 days of the employee becoming eligible. Delayed payment attracts interest at the rate prescribed by the government.

What is full and final settlement in payroll?

Full and final settlement (FnF) is the process of settling all financial dues when an employee resigns, is terminated, or retires. It includes: salary for the last working month (pro-rated), leave encashment for unused earned leaves, gratuity (if eligible), pending reimbursements, deduction of notice pay (if applicable), and TDS calculation on all FnF components. The employer must also initiate PF transfer or withdrawal on the EPFO portal and update ESI records. TAXAJ handles the entire FnF process as part of managed payroll.

Is payroll outsourcing suitable for startups and small businesses?

Yes. Payroll outsourcing is especially beneficial for startups and small businesses that lack an in-house HR or accounts team. TAXAJ's Starter Plan at ₹1,999/month handles payroll for up to 10 employees with full EPF, ESI (if applicable), TDS, and professional tax compliance included. There is no minimum contract period and businesses can scale up their plan as they grow. This is significantly cheaper than hiring an in-house payroll officer, who would cost ₹3–8 lakh per year in salary alone.

What happens if a company misses EPF or ESI payment deadlines?

Missing EPF payment deadlines (15th of the following month) attracts penal damages at 5% per annum for delays up to 2 months, 10% for 2–4 months, 15% for 4–6 months, and 25% for delays beyond 6 months, under Section 14B of the EPF Act. Interest at 12% per annum is also charged under Section 7Q. ESI default attracts interest at 12% per annum. Both EPFO and ESIC have the power to attach assets and initiate prosecution for persistent non-compliance.

What is professional tax and which states levy it?

Professional Tax is a state-level tax on salaried employees and self-employed individuals. It is levied in states like Maharashtra, Karnataka, West Bengal, Andhra Pradesh, Tamil Nadu, Gujarat, and others. The maximum amount is ₹2,500 per year. Employers must deduct it from employee salaries and remit it to the state government.

How is payroll outsourcing priced?

TAXAJ prices payroll outsourcing based on employee count. Plans start from ₹1,999/month for up to 10 employees, ₹3,499/month for 11–25 employees, ₹5,999/month for 26–50 employees, and custom pricing for 50+ employees. All plans include statutory compliance (EPF, ESI, TDS, PT), payslips, and monthly reports.

Payroll Outsourcing & HR Compliance Services in India | TAXAJ

👥 Statutory HR Compliance

Payroll & HR Compliance — Fully Managed by TAXAJ CAs

From salary computation to EPF, ESI, TDS, professional tax, Form 16, and payslips — outsource your entire payroll function to a CA-led team and stay 100% compliant every month.

₹1,999

Starting /month

500+

Businesses served

Payroll services

Pan-India

Coverage

Get a Payroll Quote

Managed Payroll + Full Statutory Compliance

Starts from

₹1,999/month

For up to 10 employees — all inclusive

Monthly salary computation & payslips
EPF + ESI + TDS deduction & payment
Professional tax compliance
Quarterly Form 24Q TDS returns
Annual Form 16 for all employees

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The Basics

What is Payroll Compliance & Why Outsource It?

Payroll compliance is not just about paying salaries — it's a legal obligation governed by multiple central and state laws: the EPF Act, ESIC Act, Payment of Wages Act, Minimum Wages Act, Income Tax Act (TDS), and state-specific professional tax laws.

Non-compliance means penalties, interest, and prosecution. EPF defaults attract 12–18% penal interest. Late TDS deposit attracts 1.5% per month interest plus ₹200/day late fee under Section 234E. ESI defaults attract 12% p.a. interest.

Outsourcing to TAXAJ means your EPF challans, ESI returns, Form 24Q TDS filings, and professional tax are handled by experts — on time, every time.

Net Pay Formula

Net Pay = Gross Salary − (TDS + EPF employee share + ESI employee share + Professional Tax + other deductions)

EPF Threshold: 20+ Employees

Employer contributes 12% of basic salary to EPF. Employee also contributes 12%. Of employer's 12%, 8.33% goes to EPS (pension) and 3.67% to EPF.

ESI Threshold: 10+ Employees (salary ≤ ₹21,000)

Employer contributes 3.25% of gross wages, employee contributes 0.75%. ESI provides medical, disability, maternity & dependent benefits.

TDS on Salary: All Employers

Every employer must deduct TDS under Section 192 on employee salary exceeding the basic exemption limit. Deposited monthly, reported quarterly in Form 24Q.

All Services

12 Payroll & HR Compliance Services

Everything from registrations to monthly returns and annual filings — all under one roof with a dedicated TAXAJ expert.

🏦

EPF Registration

Register your establishment on the EPFO portal. Mandatory for companies with 20+ employees. Includes ECR setup and UAN generation for all employees.

From ₹2,499

📊

EPF Compliance

Monthly ECR filing, challan generation, UAN KYC linking, PF transfer assistance, and annual PF return. Keeps your EPFO account green.

From ₹999/month

🏥

ESI Registration

Register on the ESIC portal, issue ESI cards to employees. Mandatory for establishments with 10+ employees earning up to ₹21,000/month.

From ₹1,999

📋

ESI Compliance

Monthly ESI challan payments, half-yearly returns filing (April–September and October–March), and employee ESI benefit claim assistance.

From ₹799/month

💰

TDS on Salary (Form 24Q)

Monthly TDS computation, deposit challans, quarterly Form 24Q filing, and annual Form 16 issuance. Covers both old and new tax regimes.

From ₹1,499/quarter

🏛️

Professional Tax

State-wise professional tax registration, monthly/annual deduction computation, and PT return filing for Maharashtra, Karnataka, WB, AP & other states.

From ₹999

🧮

Managed Payroll

End-to-end monthly payroll processing — salary computation, payslip generation, bank file preparation, and all statutory filings in one package.

From ₹1,999/month

🛡️

Employee Insurance

Group health insurance, personal accident cover, and term life cover for your employees. Managed through TAXAJ's partner network.

Custom pricing

📝

Contract Labour Registration

Registration under the Contract Labour (Regulation & Abolition) Act, 1970. Required for principal employers engaging 20+ contract workers.

From ₹3,499

📈

ESOP Administration

ESOP plan drafting, perquisite taxation at exercise, TDS on ESOP gains, ROC disclosures, and employee communication support.

From ₹4,999

📅

Professional Tax Return Filing

Annual professional tax return filing for employers across all applicable states. Includes reconciliation of amounts deducted vs. remitted.

From ₹999/year

🧑‍💼

Ask a CA About Payroll

One-on-one expert consultation on payroll structuring, CTC design, tax optimisation, and compliance strategy for your business.

₹999/session

Pricing Plans

Transparent Payroll Outsourcing Plans

All plans include salary computation, payslips, EPF + ESI + TDS compliance, Form 16, and monthly MIS reports.

Starter

Up to 10 employees

₹1,999 /month

Salary computation & payslips
EPF + ESI monthly compliance
TDS deduction & deposit
Professional tax
Quarterly Form 24Q
Annual Form 16

What Kind of Business Are You?

Payroll complexity varies by industry, headcount, and entity type. Pick your category and a TAXAJ payroll expert will reach out.

🏢

Private Limited / OPC

Tech companies, consulting firms, and incorporated businesses

EPF & ESI registration + compliance
TDS on salary & Form 16
Director remuneration structuring
ESOP perquisite taxation

🏭

Manufacturing / Factory

Production units, factories, and industrial employers

Contract & permanent worker payroll
Factory Act bonus computation
Shift & overtime calculations
Labour welfare fund compliance

🏥

Hospital / Healthcare

Hospitals, clinics, diagnostic centres, pharma companies

Doctor & consultant payroll
On-call & duty allowances
ESIC compliance for staff
Tax-efficient salary structuring

🎓

School / College / EdTech

Educational institutions and online learning companies

Teacher & staff payroll
Academic allowances & stipends
EPF for teaching staff
Section 10 tax exemptions

🛒

Retail / E-Commerce

Retail stores, warehouses, and e-commerce fulfilment businesses

High-headcount payroll management
Part-time & seasonal worker payroll
Multi-state professional tax
Incentive & commission calculations

🚀

Startup / Early Stage

Seed-funded startups, bootstrapped companies, and DPIIT-registered startups

ESOPs & sweat equity structuring
Founder salary optimisation
EPF registration when ready
Investor-ready payroll MIS

🌍

MNC / Foreign Subsidiary

Foreign companies with Indian employees or subsidiaries

Shadow payroll for expats
DTAA-compliant salary structuring
Secondment agreement compliance
Multi-currency payroll reporting

🏗️

Construction / Infrastructure

Real estate developers, civil contractors, and infrastructure companies

Contract labour registration
Site-wise worker payroll
Minimum wage compliance
BOCW Welfare Fund compliance

💼

Sole Proprietor / SME

Small businesses and owner-managed companies with a handful of staff

Simple payroll from ₹1,999/month
TDS + EPF + ESI as applicable
Form 16 for all employees
No minimum contract period

🤝

NGO / Section 8 Company

Non-profits, charitable trusts, and Section 8 companies

Volunteer vs employee classification
80G-compliant salary structures
EPF & ESI for non-profit employees
FCRA payroll compliance

📺

Media / Agency / Creative

Ad agencies, PR firms, production houses, digital agencies

Freelancer vs employee compliance
194J TDS on professional fees
Perquisite valuation for creatives
Flexible CTC structuring

🙋

Any Other Business?

IT/BPO, logistics, finance, hospitality — all sectors covered

IT / BPO / KPO companies
Logistics & transportation
Hotels & hospitality
Any other organisation

Our Process

How Payroll Outsourcing Works

Once you onboard, your dedicated TAXAJ payroll executive handles the entire monthly cycle — you just share the inputs.

Onboarding & data setup

Share employee master data, CTC structures, offer letters, and existing statutory registrations. We set up your payroll template in 2–3 working days.

Monthly inputs by 25th

Share attendance, leaves, variable pay, new joinees, exits, and any one-time payments. We accept inputs via email, Google Sheet, or your HR system.

Payroll processing by 28th

We compute gross salary, all statutory deductions (TDS, EPF, ESI, PT), and net pay. You get the bank file, payslips, and approval summary for review.

Compliance filings by 7th

EPF challan by 15th, ESI challan by 15th, TDS deposit by 7th of the following month, professional tax as per state schedule. All challans shared with you.

Quarterly & annual returns

Form 24Q quarterly, EPF annual return, ESI half-yearly return, professional tax annual return, and Form 16 issuance to all employees by June 15th.

What You Receive

Monthly Deliverables

📅 Every Month

📄 Salary computation sheet (employee-wise)
📄 Individual payslips (PDF / email)
📄 Bank transfer file (NEFT/RTGS format)
📄 EPF + ESI + TDS challans
📄 Department-wise cost MIS report
📄 Headcount reconciliation

📆 Quarterly & Annually

📄 Form 24Q TDS return + acknowledgement
📄 ESI half-yearly return filing
📄 EPF annual return (ECR)
📄 Form 16 Part A + B for all employees
📄 Professional tax annual return
📄 Full & final settlement workings on exit

Compliance Calendar

Payroll Statutory Compliance at a Glance

Every obligation, threshold, rate, and due date — so you know exactly what TAXAJ is managing on your behalf.

Statute	Applicable When	Rate	Frequency	Due Date
EPF (Employee Provident Fund)	20+ employees	Employer 12% + Employee 12% of basic	Monthly	15th of following month
ESI (Employee State Insurance)	10+ employees, salary ≤ ₹21,000	Employer 3.25% + Employee 0.75% of gross	Monthly	15th of following month
TDS on Salary (Sec 192)	All employers	As per income tax slab rates	Monthly deposit	7th of following month
Form 24Q (TDS Return)	All employers	—	Quarterly	31st Jul / 31st Oct / 31st Jan / 31st May
Professional Tax	Applicable states only	Up to ₹2,500/year per employee	Monthly / Annual	Varies by state
ESI Return (Form 5)	ESIC-registered establishments	—	Half-yearly	12th Nov and 12th May
Form 16 (TDS Certificate)	All TDS-deducting employers	—	Annual	15th June (for previous FY)
Labour Welfare Fund	Applicable states (MH, KA, etc.)	₹6–₹31 per employee (state-specific)	Half-yearly / Annual	31st Jan and 31st Jul
Gratuity (Payment of Gratuity Act)	10+ employees	15 days salary × years of service	On exit (5+ years)	Within 30 days of eligibility

Why Outsource

Why Businesses Outsource Payroll to TAXAJ

⚖️

100% Statutory Compliance

TAXAJ tracks all due dates across EPF, ESI, TDS, PT, and LWF — you never miss a challan or return. Our compliance calendar is mapped to your account.

💸

Reduce Payroll Costs

Hiring an in-house payroll officer costs ₹3–8 lakh/year in salary alone, plus software, training, and audit costs. TAXAJ outsourcing starts at ₹1,999/month.

🔒

Zero Penalty Risk

Late EPF attracts 12–18% penal interest. TDS default triggers interest + ₹200/day + prosecution under Section 276B. With TAXAJ, all deadlines are pre-scheduled.

📊

MIS Reports for Management

Department-wise cost, headcount reconciliation, salary register, and tax liability summaries — all delivered monthly in formats usable by your finance team or CFO.

🧑‍💼

Dedicated Payroll Expert

Every client gets a named TAXAJ payroll executive who knows your company's structure, employees, and compliance history — not a call centre ticket.

🚀

Scales with Your Business

Add employees, open new state offices, bring in contractors, or introduce ESOPs — your payroll outsourcing automatically adapts with a plan upgrade.

FAQ

Frequently Asked Questions

Is EPF registration mandatory for all companies? ▾

Yes. Any establishment with 20 or more employees must register under the Employees' Provident Fund & Miscellaneous Provisions Act, 1952. Once registered, EPF contributions become mandatory even if headcount later falls below 20. The employer contributes 12% of basic salary; the employee also contributes 12%. Of the employer's 12%, 8.33% goes to EPS (Employees' Pension Scheme) and 3.67% to EPF. Register for EPF with TAXAJ →

What is the ESI applicability threshold? ▾

All establishments with 10 or more employees (20 in some states) where any employee earns up to ₹21,000 per month (₹25,000 for persons with disabilities) must register under ESIC. The employer contributes 3.25% of gross wages and the employee contributes 0.75%. New establishments get a 6-month grace period on contributions after registration. Register for ESI with TAXAJ →

What is TDS on salary and when must it be deposited? ▾

TDS on salary (Section 192) is deducted by employers at the time of salary payment. The rate is based on the employee's estimated annual income and applicable income tax slab. It must be deposited with the government by the 7th of the following month. Quarterly Form 24Q must be filed, and Form 16 is issued annually by 15th June. Late deposit attracts interest at 1.5% per month plus a ₹200/day late fee under Section 234E. Let TAXAJ manage your TDS →

Which states levy professional tax and what is the rate? ▾

Professional Tax is levied in Maharashtra, Karnataka, West Bengal, Andhra Pradesh, Telangana, Tamil Nadu, Gujarat, Assam, Madhya Pradesh, Odisha, and Meghalaya, among others. The maximum amount is ₹2,500 per year per employee. Rates vary by state and salary slab. Employers must deduct it from employee salaries and remit it to the state government — monthly or annually depending on the state. Professional tax compliance →

What does TAXAJ's managed payroll include? ▾

TAXAJ's managed payroll includes: monthly salary computation, payslip generation (PDF + email), bank transfer file, EPF + ESI + TDS deduction and challan payment, professional tax compliance, quarterly Form 24Q TDS return filing, annual Form 16 for all employees, monthly MIS reports (department-wise cost, headcount), full & final settlement calculations on employee exit, and a dedicated payroll executive for queries.

Is gratuity mandatory and how is it calculated? ▾

Yes. Under the Payment of Gratuity Act, 1972, gratuity is mandatory for all establishments with 10 or more employees. An employee who completes 5 years of continuous service becomes eligible. Gratuity = (Last drawn salary × 15 × years of service) ÷ 26. The maximum tax-free gratuity limit is ₹20 lakh (after the 7th Pay Commission revision). It must be paid within 30 days of the employee becoming eligible.

What happens when an employee leaves — full & final settlement? ▾

Full and final settlement (FnF) involves calculating and paying: unpaid salary for days worked in the last month, leave encashment for balance earned leaves, gratuity (if eligible), any pending reimbursements, TDS deduction on all FnF components, and deduction of notice pay if the employee leaves without serving notice. TAXAJ computes FnF, ensures PF transfer/withdrawal is initiated, ESI is updated, and Form 16 reflects the correct figures.

Ready to Outsource Your Payroll?

Let TAXAJ handle EPF, ESI, TDS, Form 16, and every monthly deadline — so you focus on growing your business.

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