Summary: Payroll in India involves statutory deductions, state-specific taxes and detailed compliance. HRMS software reduces manual work and errors.
Processing salaries manually in spreadsheets becomes risky as headcount grows. Indian payroll includes several statutory components, and mistakes lead to employee dissatisfaction and penalties.
Statutory components
- Provident Fund (PF): contributions by employer and employee for eligible employees
- Employees' State Insurance (ESI): for employees within the applicable wage limit
- Professional Tax (PT): varies by state
- TDS on salary: based on income and declared investments
- Labour Welfare Fund: applicable in some states
Rules and limits change periodically, so payroll software settings should be reviewed with your accountant.
Core HRMS features
- Employee records and documents
- Attendance via biometric devices, mobile apps or geo-fenced check-ins
- Leave policies and approvals
- Salary structures and payslips
- Investment declarations and tax computation
- Statutory reports and challans
Employee self-service
A mobile app lets employees view payslips, apply for leave and update details, reducing HR queries.
Integration
Payroll data should flow to accounting for salary journal entries.
FAQs
Can the software handle multiple states?
Yes, with state-wise PT and other rules configured.
Does it generate Form 16?
Many payroll systems generate Form 16 data; review before issuing.
Can contractors be included?
Yes, with separate payment and compliance handling.
