Payroll is often remembered for salary day. However, payroll is also defined by what is withheld, deposited, reported, and archived—on time, every time. Because of that, payroll compliance in india is usually felt most clearly when a deadline is missed, a deduction is questioned, or a notice is received.
Still, panic is not required. Instead, a repeatable compliance rhythm is built: inputs are captured, deductions are applied, payments are deposited, returns are filed, and records are maintained.
In this guide, the most common statutory items are explained in simple terms. Additionally, widely followed due-date patterns are shared so that payroll months can be closed calmly.
Payroll compliance is the consistent following of labour and tax rules related to wages, deductions, employer contributions, statutory payments, and mandatory filings.
In plain terms, three outcomes are expected:
Correct deductions are made from eligible employees.
Correct deposits are made to the right authorities within due dates.
Correct returns and records are maintained for audits and employee queries.
As a result, trust is protected, penalties are reduced, and audits are handled with far less stress.
Although every company will not be covered under every law, these are commonly seen in Indian payroll operations:
1) EPF (Provident Fund)
PF contributions are generally required to be deposited by the 15th of the following month.
Additionally, the electronic challan/return workflow is usually tied to the remittance process.
2) ESI (Employees’ State Insurance)
ESI contributions are generally required to be remitted monthly, and the payment due date is commonly stated as the 15th of the following month.
Meanwhile, half-yearly ESIC returns are often referenced with due dates of 12 November (for Apr–Sep) and 12 May (for Oct–Mar).
3) TDS on salary (Income Tax)
TDS is required to be deposited by the due dates notified by the Income Tax Department’s tax calendar. For many deductors, deposit due dates are shown as the 7th of the following month, with a common extended timeline for March deductions reflected in the calendar (e.g., late April).
Because notifications and exceptions can apply, the official calendar is typically treated as the source of truth.
4) Professional Tax (PT)
Professional tax rules are state-specific. Therefore, applicability, slabs, and due dates are set by the respective state, and variation is explicitly expected.
5) Labour Welfare Fund (LWF)
LWF frequency and due dates are also state-specific. As a result, monthly, half-yearly, or annual patterns can be seen depending on the state act.
A simple way to reduce missed deadlines is to run payroll compliance as a calendar, not as memory.
Monthly (often seen)
PF deposit: on or before the 15th of the following month.
ESI deposit: commonly referenced as the 15th of the following month.
TDS deposit: due dates are listed in the Income Tax Department calendar (commonly the 7th for many months, with March handled differently in the calendar).
Quarterly (often seen)
Quarterly TDS statements (e.g., Form 24Q): due dates are commonly shown as 31 July, 31 October, 31 January, and 31 May for the four quarters.
Half-yearly (often seen)
ESIC return: commonly referenced as 12 November and 12 May, depending on the half-year period.
LWF/PT: may also be half-yearly in some states, while other states may require monthly or annual compliance.
Because state rules differ, PT and LWF due dates are usually locked after the employee location map is finalized.
Confusion is rarely created by deductions themselves. Instead, confusion is created when deductions are not explained clearly.
PF deduction (employee + employer)
PF is typically structured as an employee contribution and an employer contribution. Therefore, the salary structure and eligibility mapping are expected to be maintained accurately, and deposits are expected to be made within the monthly due-date cycle.
ESI deduction (employee + employer)
ESI is generally applied based on eligibility and coverage rules. Additionally, monthly remittance is expected, and half-yearly return filing is commonly referenced.
TDS on salary
TDS is calculated based on taxable income assumptions, declarations, proofs (as per process), and applicable rules for the year. Then, deposits and quarterly statements are filed as per the tax calendar and quarter schedule.
PT and LWF
PT and LWF are location-sensitive. Therefore, employee work location, registration applicability, and state schedules are expected to be tracked carefully.
To keep compliance predictable, a repeatable sequence is usually followed:
Step 1: Coverage mapping is finalized
First, applicability is confirmed for PF/ESI/PT/LWF based on establishment details and employee locations. After that, employee masters are updated.
Step 2: Payroll inputs are locked
Attendance, leaves, incentives, arrears, and joiner/exit details are captured. Then, cut-offs are enforced. Consequently, last-minute edits are reduced.
Step 3: Deductions and contributions are computed
Statutory deductions are applied based on eligibility. Meanwhile, employer contributions are computed and reconciled.
Step 4: Deposits are scheduled
Challans and payment files are prepared. Then, deposits are made as per PF/ESI monthly cycles and the Income Tax calendar for TDS.
Step 5: Returns and statements are filed
Quarterly TDS statements are filed as per quarter due dates.
Similarly, ESIC return filing is handled half-yearly, where applicable.
Step 6: Records are archived (audit-ready)
Registers, challans, acknowledgements, and approval trails are stored securely. As a result, queries and audits are handled faster.
Mistake 1: Due dates are remembered, not calendared
When memory is used, deadlines are missed. Therefore, a compliance calendar is usually maintained with reminders and buffers.
Mistake 2: Location mapping is not maintained
When an employee’s work location is changed but PT/LWF mapping is not updated, errors are created. As a result, state-wise compliance gaps can be triggered.
Mistake 3: Payroll cut-offs are not enforced
When late inputs are accepted every month, payroll is rushed. Consequently, errors are repeated.
Mistake 4: Proofs and declarations are not tracked cleanly
When payroll documentation is weak, disputes are increased—especially around taxes. Therefore, checklists and timelines are usually enforced.
Payroll calendar is published (cut-offs + pay date + deposit dates)
Employee masters are updated (joiners/exits/location/bank/statutory IDs)
PF and ESI deposits are scheduled for the monthly cycle (commonly by the 15th)
TDS deposits are made as per the Income Tax calendar
Quarterly TDS statements are filed on the quarter due dates
ESIC half-yearly returns are filed where applicable
PT/LWF schedules are locked state-wise and tracked
Proofs, challans, and acknowledgements are archived securely
When payroll is run with calendars, cut-offs, validations, and clean records, payroll compliance in india is not forced—it is maintained. As a result, employees are paid confidently, reporting is handled smoothly, and audits feel manageable.
And when internal bandwidth is limited, services can be used so that execution is handled consistently. For example, Team Management Services provides payroll and statutory compliance services that can support employers with structured processing, documentation, and statutory adherence—so payroll operations can be kept steady while teams stay focused on growth.
Payroll compliance in India is the process by which statutory deductions are calculated correctly, amounts are deposited within deadlines, and required returns/records are maintained for laws such as PF, ESI, income tax (TDS), professional tax, and labour welfare fund (where applicable).
The most common statutory items included in payroll are PF (EPF), ESI, TDS on salary, and—depending on the employee’s state—Professional Tax (PT) and Labour Welfare Fund (LWF). Applicability can differ based on establishment type, employee eligibility, and state rules.
In many payroll cycles, PF and ESI payments are targeted by the 15th of the following month, while TDS deposit due dates are generally aligned to the Income Tax Department’s official tax calendar (often by the 7th of the following month, with exceptions shown for March). Because notifications can change deadlines, the official portal calendar should be checked regularly.
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