Payroll Management Software for India
India's payroll landscape spans 28 state-level Professional Tax regimes, mandatory PF/ESI contributions, quarterly TDS filings, and CTC structures that differ from gross-salary models used elsewhere. Kiework handles all of it natively.
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India Payroll at a Glance
Trusted by India businesses
What Makes India Payroll Unique
Multi-State Professional Tax Engine
India has 28 distinct PT slab structures. Maharashtra uses monthly slabs up to ₹2,500, while Karnataka caps at ₹200/month. Kiework auto-applies the correct state slab based on the employee's work location.
PF ECR Auto-Generation
Generate EPFO-compliant Electronic Challan-cum-Return files with correct PF/EPS/EDLI splits. Handles the ₹15,000 wage ceiling, voluntary PF contributions, and international worker exemptions.
ESI with Wage Period Tracking
ESI eligibility is determined in six-month contribution periods. Kiework tracks gross wages against the ₹21,000 ceiling and automatically starts/stops ESI deductions at period boundaries.
TDS Computation & Form 16
Compute tax under both old and new regimes, factor in Section 80C/80D declarations, HRA exemptions, and generate Form 16 Part A and Part B at year-end for every employee.
CTC Structuring (Basic/HRA/Special)
Indian payroll uses Cost-to-Company, not gross salary. Kiework lets you define CTC breakdowns — Basic (40–50%), HRA (40–50% of Basic), Special Allowance, and statutory employer contributions — and reverse-calculates net pay.
LWF Across States
Labour Welfare Fund contributions vary by state — Maharashtra charges ₹25/employee semi-annually, Karnataka charges ₹20 annually. Kiework maps each state's LWF rules and auto-deducts at the correct frequency.
Generic Payroll vs India-Adapted Payroll
Generic Payroll vs India-Adapted Payroll
| Aspect | Generic Payroll | India-Adapted Payroll |
|---|---|---|
| Professional Tax | Single flat deduction or manual entry | 28 state-specific slab engines with auto-calculation |
| PF/EPS Split | Single "retirement" deduction field | Auto-split into PF (3.67%) and EPS (8.33%) with ₹15,000 ceiling logic |
| ESI Eligibility | Static toggle per employee | Dynamic eligibility based on 6-month contribution period wage tracking |
| Salary Structure | Gross salary with flat deductions | CTC → Basic/HRA/Special Allowance → reverse net-pay calculation |
| Tax Filing | Annual summary export | Quarterly Form 24Q generation, annual Form 16 with Part A + B |
| Multi-Establishment | Single company entity | Separate PF/ESI establishment codes per branch with consolidated reporting |
Why India Payroll Is Uniquely Complex
India is not one payroll jurisdiction — it is effectively 28. Each state administers its own Professional Tax with different slab structures, filing frequencies, and exemption rules. An employee earning ₹25,000 in Maharashtra pays ₹200/month in PT, while the same salary in Telangana attracts a different slab entirely. Companies operating across states must maintain parallel PT calculations and file returns in each state separately.
The CTC (Cost-to-Company) model adds another layer of complexity. Unlike countries where payroll starts with gross salary, Indian payroll begins with CTC — which includes employer PF, employer ESI, gratuity provision, and sometimes even variable pay. The system must reverse-calculate: given a CTC of ₹8,00,000, determine Basic (typically 40–50% of CTC minus employer contributions), HRA (40–50% of Basic), Special Allowance (the balancing figure), and then compute statutory deductions on each component separately.
The PF/EPS split creates a particularly tricky calculation. Of the employer's 12% PF contribution, 8.33% is diverted to the Employees' Pension Scheme (EPS) — but only on wages up to ₹15,000. For employees earning above this ceiling, the EPS contribution is capped at ₹1,250/month, and the remainder flows back into PF. This means the PF account receives different amounts depending on wage levels, and the calculation changes if an employee opts out of EPS or is an international worker.
ESI adds temporal complexity. Eligibility is not determined month-to-month but in six-month contribution periods (April–September and October–March). An employee whose wages cross ₹21,000 mid-period remains covered for the rest of that period. New joiners must be tracked from their date of joining to the period boundary. And the 2024 proposal to raise the ceiling to ₹25,000 means payroll systems must be ready for mid-year threshold changes.
Finally, multi-establishment compliance means that a company with offices in Delhi, Mumbai, and Bangalore may have three separate PF establishment codes, three ESI registrations, and three PT registrations — each with different filing deadlines. Payroll software that treats "India" as a single entity will produce incorrect returns for any company operating in more than one state.
Payroll Management in India: FAQ
Payroll Management Built for India
See how Kiework handles India-specific payroll management requirements out of the box — no customization needed.