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Payroll Management Services India | Outsourced Payroll Mumbai | N D Savla
Virtual CFO

Payroll Management Services
Outsourced Payroll in India

Salary computation, statutory deductions, payslips, EPF and ESI compliance, TDS on salary under Section 192, professional tax, and every statutory return — processed accurately and on time each month, without in-house payroll staff.

What Is Payroll Management and What Does It Include?

Payroll management is the end-to-end process of calculating, processing, and disbursing employee compensation — salaries, wages, bonuses, and allowances — while simultaneously managing all related statutory compliance obligations including Employee Provident Fund (EPF), Employee State Insurance (ESI), Tax Deducted at Source (TDS) on salary, and professional tax. In India, payroll is not a simple payment function — it is a complex, multi-layered compliance obligation that touches multiple regulatory frameworks, with mandatory deposits, filings, and returns due monthly and quarterly.

At N D Savla & Associates, we provide comprehensive, end-to-end payroll management services for businesses of all sizes — from startups with a handful of employees to established companies with large workforces. Our outsourced payroll team handles every aspect of payroll: salary computation, statutory deductions, payslip generation, EPF and ESI compliance, TDS on salary calculation and deposit, professional tax management, and all related statutory return filings. We ensure payroll is processed accurately, on time, every month, without the business needing dedicated in-house payroll staff.

Payroll management is far more than transferring salaries to employee bank accounts. For a business in India, it is a multi-step process involving gross salary calculation, statutory deduction computation, net salary determination, payment processing, payslip generation, statutory deposit management, and return filing — all of which must be completed within tight monthly deadlines.

Our payroll management services work seamlessly with our accounting and tax compliance and virtual CFO services so that payroll data flows directly into the business’s financial records and all related compliance is managed as part of one integrated process.

What Is Included in Payroll Management?

A comprehensive payroll management service covers every step from CTC to compliance filing:

Gross salary computation for each employee based on their CTC structure and applicable allowances
Statutory deduction calculation — EPF employee contribution, ESI employee contribution, TDS on salary, and professional tax
Employer contribution computation — the EPF employer share and ESI employer share
Net take-home salary determination for every employee, every cycle
Payslip generation and distribution to employees
EPF and ESI challan preparation for the monthly contribution deposits
Deposit of all statutory deductions and contributions with the respective authorities within due dates
Statutory return filing — EPF ECR, ESI half-yearly returns, and quarterly Form 24Q

What Is PF and ESI Compliance in Payroll?

PF and ESI compliance are the two most important statutory obligations in Indian payroll, and errors or delays in either can result in significant penalties and employee grievances. Alongside them sits TDS on salary:

01

Employee Provident Fund (EPF) Compliance

The Employees' Provident Funds and Miscellaneous Provisions Act 1952 mandates EPF for all establishments with 20 or more employees. Under EPF, both the employee and employer contribute to the employee's provident fund account. The employee's contribution is 12% of basic salary plus dearness allowance. The employer's contribution is also 12% of basic plus DA — of which 8.33% goes to the Employee Pension Scheme (EPS) and 3.67% goes to the EPF account directly. The total monthly contribution must be deposited with EPFO by the 15th of the following month. Monthly electronic challan cum return (ECR) must be filed on the EPFO portal.
EPF Act 1952 · Deposit by the 15th
02

Employee State Insurance (ESI) Compliance

ESI applies to establishments with 10 or more employees (lower threshold in certain states) where the employee's gross salary is Rs 21,000 per month or less. The employee's ESI contribution is 0.75% of gross wages and the employer's contribution is 3.25% of gross wages. Total ESI contributions must be deposited by the 15th of the following month. Half-yearly ESI returns must be filed on the ESIC portal. ESI provides employees with medical benefits, maternity benefits, and disability coverage — making it an important component of the employee compensation package.
ESI Act 1948 · Half-Yearly Returns
03

TDS on Salary

TDS on salary under Section 192 of the Income Tax Act requires employers to estimate each employee's taxable income for the year, calculate the income tax payable on that income, and deduct it proportionately from each monthly salary payment. The TDS deducted must be deposited with the government by the 7th of the following month. Quarterly TDS returns in Form 24Q must be filed. At the end of the financial year, Form 16 must be issued to each employee. For standalone TDS return filing requirements, we also offer that as an individual service.
Section 192 · Form 24Q · Form 16

Who Needs Outsourced Payroll Management Services?

Virtually every business with employees benefits from professional payroll management. The specific case for outsourcing is strongest in these situations:

Startups with 5–50 Employees

Businesses without a dedicated HR or finance function. Outsourced payroll ensures EPF and ESI are set up correctly from the start, statutory registrations are obtained, and monthly compliance is managed professionally from day one.

Growing SMEs

Where the founding team is stretched thin and payroll is being handled informally, or by a general accountant without specific payroll compliance expertise.

High Turnover or Variable Workforce

Companies where the payroll changes significantly month to month and every statutory deduction has to be recalculated each period.

Multiple Salary Structures

Businesses running basic plus HRA plus allowances plus performance pay, where computing TDS accurately across the old and new tax regimes requires specialist knowledge.

Companies Expanding Into New States

Where professional tax rates, ESI applicability, and local labour law requirements differ from the home state.

Businesses Facing an EPFO or ESIC Notice

Where an audit or notice has been received and professional management of the compliance function going forward is essential.

How Has Payroll Compliance Evolved in India?

The statutory framework for payroll compliance in India has evolved significantly over the decades, with a general trend towards greater formality, digital filing, and expanded coverage.

The EPF Act was enacted in 1952 — making India one of the earlier developing countries to establish a formal provident fund system for organised sector workers. The ESI Act followed in 1948, providing a social insurance framework covering medical benefits and other contingencies. For the first several decades after independence, however, the compliance burden was relatively limited because coverage was confined to larger establishments and enforcement was not always consistent.

The introduction of online EPF filing and the Universal Account Number (UAN) system in 2014 transformed EPF compliance. Employees can now track their EPF accounts online, and employers must file monthly ECR returns digitally on the EPFO portal. This digitisation dramatically increased the transparency and accountability of EPF compliance.

The Labour Code reforms — through the Code on Wages 2019, the Code on Social Security 2020, the Industrial Relations Code 2020, and the Occupational Safety, Health and Working Conditions Code 2020 — are progressively reshaping the compliance landscape, consolidating multiple labour laws into four codes. While the implementation of the Labour Codes is still being phased in, their eventual full implementation will change the structure of payroll compliance significantly. Staying current with these changes is a key advantage of professional outsourced payroll management.

NoteEPF contributions must be deposited by the 15th of each month. TDS on salary must be deposited by the 7th. Professional tax due dates vary by state. Missing any of these deadlines attracts interest, late fees, and the risk of labour law proceedings. Our payroll management service tracks all compliance calendars and ensures timely deposits every month.
ImportantUnder the new tax regime — the default regime for employees from FY 2024–25 onwards — the TDS computation for employees changes substantially. Employers must obtain employee declarations about their preferred tax regime and compute TDS accordingly. Incorrect regime selection or miscalculation of TDS can result in employees being under-deducted and facing large tax dues at year end. Our payroll management service handles this correctly for each employee.

Our Broader Virtual CFO and Compliance Services

Payroll data flows straight into the rest of the financial stack we manage:

Common Questions on Payroll Management

What is payroll management for a business in India?
Payroll management is the end-to-end process of computing employee salaries, managing all statutory deductions (EPF, ESI, TDS on salary, professional tax), processing salary payments, generating payslips, depositing all statutory contributions with the relevant authorities within due dates, and filing all related returns — EPF ECR, ESI returns, and quarterly Form 24Q TDS returns.
What is outsourced payroll processing in India?
Outsourced payroll processing is the delegation of the entire payroll function to an external specialist — a CA firm or payroll provider. The business provides employee data and salary inputs; the provider handles all computation, compliance, deposits, and filings. It eliminates the need for dedicated in-house payroll staff and ensures professional handling of statutory compliance.
What is PF and ESI compliance in payroll?
EPF compliance requires monthly deduction of 12% of basic salary from employees, equal employer contributions, deposit of the total by the 15th, and monthly ECR return filing. ESI compliance requires deductions from employees earning up to Rs 21,000 per month, employer contributions, deposit by the 15th, and half-yearly return filing. Both are mandatory for establishments meeting the applicable coverage thresholds.
Who handles payroll compliance for small businesses in India?
CA firms and specialist payroll providers handle payroll compliance for small businesses through outsourced arrangements. This is more cost-effective than hiring dedicated payroll staff and ensures professional knowledge of the evolving statutory requirements.
What is TDS on salary and how is it managed?
TDS on salary is the deduction of income tax from employee salaries under Section 192 of the Income Tax Act. The employer estimates the employee's taxable income for the year, computes the income tax due, and deducts proportionate TDS from each monthly salary. It must be deposited by the 7th of the following month and reported in quarterly Form 24Q returns. Form 16 is issued to each employee at year end.

Want payroll and every statutory deposit handled each month?

Talk to our payroll team — salary processing, EPF, ESI, TDS on salary, professional tax, and all statutory returns under one roof.

Get in Touch
Call +91 9821 83 26 83 WhatsApp +91 9819 000 511 Email nainitsavla@savlagroup.in Monday to Saturday, 10:00 AM – 7:00 PM