Payroll Outsourcing Services for Indian Employers
Payroll outsourcing means handing your monthly salary cycle to us: attendance in, salary worked out, payslips out, bank file ready and every statutory deposit made on time. Under the Code on Wages, 2019, monthly wages must be paid before the seventh day of the next month, so the cycle runs to a fixed calendar.
What it is
Payroll outsourcing is a monthly service. You send us attendance, leave and changes such as joiners, exits or increments. We calculate gross pay, deductions and net pay, issue payslips, prepare the bank transfer file and make the PF, ESI, TDS and labour welfare fund deposits that follow from that month’s salary.
Picture a Faridabad auto-parts supplier with 18 people on the rolls. The accountant runs salary in the first week, then rushes PF and ESI before the 15th. Two more hires and PF becomes compulsory. That is usually when owners hand the cycle over.
This is different from our payroll compliance service, which covers the registrations and statutory returns alone. With outsourcing, we run the whole salary cycle and the compliance sits inside it. Since 21 November 2025 the four Labour Codes are in force, so every salary structure must pass the Code on Wages test. If allowances excluded from wages exceed half of total pay, the excess is added back to wages under Section 2(y).
Who it applies to
Owner-run teams with no HR desk
A business with 8 to 50 staff where the owner or the accountant runs salary on a spreadsheet late into the night every month.
Companies about to cross 10 or 20
ESI registration is needed at 10 employees and PF registration at 20. Once you cross either line, payroll stops being a simple bank transfer and needs monthly challans and returns.
Firms that want salary kept private
We keep salary data confidential under a written data-processing contract.
Why it matters
Staff get paid on time
Section 17 of the Code on Wages sets the deadline: monthly wages before the seventh day of the following month, and full dues within two working days of a resignation or dismissal.
Deposits stop slipping
PF and ESI are due by the 15th and salary TDS by the 7th. Miss a date and interest starts running, often followed by a notice.
One set of numbers
Payslips, the bank file, PF and ESI returns and the TDS statement come from one calculation, so they match when an auditor compares them.
Documents required
From the employer, once
- PAN, TAN and certificate of incorporation or registration
- EPFO and ESIC codes, if already registered
- Current salary structure and leave policy
- Bank account used for salary payments
For each employee
- PAN and Aadhaar
- UAN and ESIC IP number, where they exist
- Bank account details
- Appointment letter and CTC breakup
- Tax regime choice and Form 124 investment declaration
Every month
- Attendance and leave summary
- Joiners, exits and increments
- Overtime, bonus, advances or other one-off items
How it works
Test every CTC against the Codes
We check each salary against the 50% wage rule, the PF wage ceiling of ₹25,000 (from 17 September 2026) and the ESI ceiling of ₹21,000. Anything off gets flagged.
Fix a monthly input date
You send inputs by an agreed date, usually the 1st or 2nd. We return a draft payroll register for your approval within one or two working days.
Release payslips and the bank file
Once you approve, we share the bank upload file and email payslips to employees, so salaries reach accounts before the 7th.
Deposit and file the statutory dues
We prepare the TDS challan by the 7th and the PF ECR and ESI contribution by the 15th. Quarterly TDS statements in Form 138 follow, and the annual Form 130 goes out to employees by 15 June.
Handle exits and year-end
Full and final settlement is worked out inside the two-working-day window. Here is the catch: TDS must be trued up before the March payroll, or the last quarter’s statement throws up short deductions. We reconcile it in February.
Outsourced vs in-house payroll
| Point | In-house | Outsourced to us |
|---|---|---|
| Who tracks rule changes | Your accountant, alongside other work | Our payroll team, as part of the monthly cycle |
| Confidentiality of salaries | Visible to the person processing it | Handled outside the office under a written contract |
| Statutory deposits | Depend on one person remembering | Run to a fixed calendar with reminders to you |
| Who signs and pays | Employer | Employer (we prepare; you approve and pay) |
One thing never moves: you stay the employer in law. You approve each payroll and pay from your own account. Under the Digital Personal Data Protection Act, 2023 you also stay responsible for employee data, so we sign a processing contract before the first run.
Timelines
Salary payment
Before the 7th of the next month for monthly wages; within two working days of an employee leaving.
TDS on salary
Deposit by the 7th of the next month (March by 30 April). Quarterly Form 138 by 31 July, 31 October, 31 January and 31 May.
PF and ESI
PF ECR and ESI contribution by the 15th of the next month.
Form 130 to employees
By 15 June. It replaces the old Form 16 under the Income-tax Act, 2025.
Haryana labour welfare fund
Employee 0.2% of wages capped at ₹35 and employer twice that, up to ₹70, deposited by 31 December (a monthly online option exists).
What happens if payroll goes wrong
Late PF or ESI
Late PF carries 12% interest a year plus damages. Late ESI carries 12% simple interest a year, and damages that grow the longer it stays unpaid.
Late TDS or statements
Interest of 1% or 1.5% a month on late deduction or deposit, and a fee of ₹200 a day for a late quarterly statement, capped at the TDS amount.
Wage claims
Underpaid or late final dues invite claims under the Code on Wages. A badly split CTC can mean back PF on added-back allowances.
Frequently asked questions
What is the difference between payroll outsourcing and payroll compliance?
Payroll outsourcing covers the whole monthly salary cycle, while payroll compliance covers only the statutory side. With outsourcing we compute salaries, issue payslips, prepare the bank file and then make the PF, ESI, TDS and labour welfare deposits from the same numbers. With compliance alone, you run salaries and we handle registrations, challans and returns. Many clients start with compliance and move to full outsourcing once headcount crosses 15 or 20. Nothing is filed without your approval.
Do we still need to pay salaries from our own account?
Yes, salaries are always paid from the employer’s own bank account. We prepare the payroll register and a bank upload file in your bank’s format; you approve and release the payment. The same goes for PF, ESI and TDS challans. We generate them; you pay them online.
How soon must monthly salary be paid under the Labour Codes?
Monthly wages must be paid before the seventh day of the following month under Section 17 of the Code on Wages, 2019, so March salary must reach employees by 6 April. When someone resigns, is dismissed or retrenched, their wages must be paid within two working days. We build the monthly calendar backwards from the 7th.
What changed in payroll with the four Labour Codes?
The biggest change is the definition of wages under Section 2(y) of the Code on Wages. If allowances excluded from wages exceed half of total pay, the excess is treated as wages. That can raise PF, gratuity and bonus costs where basic pay was kept low. The Codes came into force on 21 November 2025, with older rules continuing during transition. In our first month we show you the cost impact.
Who is covered by PF after the wage ceiling increase?
From 17 September 2026 the EPF wage ceiling is ₹25,000 a month, up from ₹15,000. PF is compulsory once an establishment has 20 or more employees, and enrolment is mandatory for employees earning up to the ceiling. Employee and employer each contribute 12%, with 8.33% of the employer share going to pension on wages up to the ceiling. We apply the new ceiling from the right payroll month.
How many employees do we need before outsourcing makes sense?
There is no legal minimum. It usually pays off around 10 employees, because ESI starts at 10 and PF at 20. Below that, salary is simple enough to run in-house. Above it, challans, returns, joiner and exit forms and TDS projections eat real time every month.
Is our employees’ salary data safe with an outside firm?
Yes, provided the arrangement is in writing, which is what the law expects. Under Section 8 of the Digital Personal Data Protection Act, 2023, you remain responsible for your employees’ data and may engage a processor only under a valid contract. We sign a data-processing agreement before the first payroll, limit access to the payroll team and share files through secure channels rather than open email threads.
Can you handle employees in more than one state?
Yes, we run payroll for staff in different states from one place. Some rules change by state: Haryana and Delhi do not levy professional tax, while many other states do, and labour welfare fund rates also differ. Haryana’s fund, for example, is 0.2% of wages capped at ₹35 for the employee and ₹70 for the employer. We apply each state’s rate based on where the employee actually works.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
There is no government fee for running payroll itself. The statutory amounts are your PF, ESI, TDS and labour welfare contributions, which you pay directly through the portals.
Ready to begin?
Send us last month’s salary sheet and we will show you how your payroll would run with us.