Running payroll each month and discharging what attaches to it: gross to net against the salary structure, withholding on salary built from the employee's own declaration rather than a flat estimate, provident fund and pension contributions, employees' state insurance where the establishment is covered, profession tax in each state that levies it, gratuity and bonus when they fall due, and the registers and returns each statute requires. It also covers the two points at which payroll usually goes wrong: the salary structure, and exits.
The law it sits under.
The Code on Wages, 2019 and the Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions Codes, 2020, in force from 21 November 2025, which replaced the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the Employees' State Insurance Act, 1948, the Payment of Gratuity Act, 1972 and the Payment of Wages, Minimum Wages and Payment of Bonus Acts, together with the shops and establishments and profession-tax enactments of each state. Central rules under the Wages, Industrial Relations and Social Security Codes were notified on 8 May 2026 and under the Occupational Safety Code on 9 May 2026; state rules have been notified in some states and not others, so we confirm which rules govern an obligation for your establishment and state. Withholding on salary is governed by the Income-tax Act, 2025 and the Income-tax Rules, 2026 — the salary certificate is Form 130 and the quarterly statement Form 138, formerly Form 16 and Form 24Q under section 192 of the repealed 1961 Act.
Provident fund coverage begins at the headcount in the corresponding provision of the Code on Social Security, 2020, which replaced section 1(3) of the 1952 Act; below it, voluntary coverage is available and cannot later be given up. Employees' state insurance applies in a notified area at the notified headcount, and the wage ceiling for coverage is in the rules. Gratuity applies on the continuous service the Code specifies. Profession tax is a state levy and Delhi does not impose one, so employing someone in a state that does levy it starts that state's registration and returns. The principal employer answers for a contractor's provident fund and insurance compliance.
How the work runs.
Establish coverage first: which statutes apply on headcount, wage level and location, and from what date liability arose — liability runs from the date of coverage, not of registration.
Build the employee master and test the salary structure against the single definition of wages the Codes now use, with its floor on the proportion basic pay bears to total remuneration. Where allowances are heavy the floor raises contributions, and restructuring the package is a live exposure rather than a future one.
Run the monthly cycle: attendance and leave, gross to net, and withholding on the employee's declared regime and investments, revised through the year so the last quarter does not absorb the shortfall.
Deposit and file on time: the challan-cum-return and provident fund contribution by the fifteenth, insurance by the fifteenth, profession tax by each state's date, tax deducted by the seventh, and the quarterly statement.
Maintain the wage register and muster roll, take nominations in Form F under the Gratuity Act, and seed universal account numbers and insured-person numbers with know-your-customer details.
Compute gratuity and bonus when they fall due — the ceilings and limits are in the respective Acts as amended — and handle exits: full and final settlement, gratuity paid within the period the Act allows, provident fund transfer, and the part-year salary certificate.
The deliverables.
- Monthly payroll
- The register with gross to net for each employee, the bank payment file, and the reconciliation to the ledger.
- Payslips
- Individual payslips showing earnings, deductions and the withholding basis.
- Filings
- Provident fund, insurance, profession-tax and withholding filings on one calendar.
- Statutory records
- The registers, nominations and returns each Act requires.
- Year-end set
- Annual salary certificates and the fourth-quarter statement.
Employee master with date of joining, location and full salary structure · attendance, leave and overtime records · appointment letters · permanent account number and Aadhaar of each employee · bank details · provident fund, insurance and profession-tax credentials and portal access · previous employer salary details for mid-year joiners · regime, investment and rent declarations with proof · contractor agreements with proof of the contractor's own compliance.
Key dates
The provident fund challan-cum-return and contribution are due by the fifteenth of the following month, and the insurance contribution by the fifteenth, with contribution periods running April to September and October to March. Tax deducted from salary is deposited by the seventh of the following month, with the different date the Rules give for March; the quarterly statement and annual salary certificate follow on the dates the Income-tax Rules, 2026 prescribe. Gratuity is payable within thirty days of becoming payable under the corresponding provision of the Code on Social Security, 2020, formerly section 7(3) of the 1972 Act. Bonus is paid within eight months of the close of the accounting year under the Code on Wages, 2019, formerly section 19 of the 1965 Act.
Statutory dates change by notification and circular. We confirm the operative date for your year rather than quoting the ordinary one.
Also in Business Consulting.
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Include the entity type, the assessment or financial year concerned, and any notice or reference number — it lets us give you a useful answer first time.