Use this skill whenever asked about Indian payroll processing, employee salary calculations, TDS on salary (Section 192), Provident Fund (PF/EPF), Employee State Insurance (ESI), employer cost calculations, CTC breakdowns, net-to-gross or gross-to-net conversions, Indian payslip structure, Form 24Q/Form 138 filings, or any question about computing wages, deductions, or employer obligations in India. Trigger on phrases like "Indian payroll", "TDS on salary", "PF contribution", "ESI contribution", "EPF", "CTC breakdown", "new tax regime India", "old tax regime", "Form 16", "Form 130", "salary structure India", "basic DA HRA", "professional tax", "gratuity", "bonus India", or "minimum wages India".
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Add this Guide to your AI and it stops answering in generalities. It walks your situation through the method Mayur follows, one step at a time, ending in a working paper you can hand to an accountant for review before you file.
Scope the payroll run
Confirm the employer, the pay month and the employee's state of employment (professional tax, minimum wage and LWF vary by state). Fix the financial year as 1 April to 31 March.
Build the CTC and salary structure
Split the CTC into Basic, DA, HRA, special allowance and employer contributions. Keep Basic plus DA high enough that PF and gratuity are not understated.
Watch for: Basic plus DA must be at least 50% of total remuneration under the Labour Codes.
Code on Wages 2019
Collect the regime election and declarations
Have the employee elect the new regime (default) or opt for the old regime, and gather old-regime investment and rent declarations (80C, 80D, HRA, home-loan interest). If no declaration is received, withhold on the new regime.
Watch for: The new regime under section 115BAC is the default; the employer must withhold on it unless the employee opts for the old regime.
Every figure is drawn from this Tax Guide and cited to its source.
Rate
3.25% of grossESI Act
Wage ceiling
₹21,000/monthESI Act
New Tax Regime s 115BAC — 0 – ₹4,00,000
0%Finance Act 2025; s 115BAC
New Tax Regime s 115BAC — ₹4,00,001 – ₹8,00,000
5%s 115BAC
New Tax Regime s 115BAC — ₹8,00,001 – ₹12,00,000
10%s 115BAC
New Tax Regime s 115BAC — ₹12,00,001 – ₹16,00,000
15%s 115BAC
New Tax Regime s 115BAC — ₹16,00,001 – ₹20,00,000
20%s 115BAC
New Tax Regime s 115BAC — ₹20,00,001 – ₹24,00,000
25%s 115BAC
New Tax Regime s 115BAC — Above ₹24,00,000
30%s 115BAC
EPF
3.67% of Basic+DAEPF Act
Reviewed against the cited tax authorities by Mayur Deokar on 2026-06-06.
Items flagged for further clarification are tracked separately and excluded here.
This block is generated from verified skill_facts — edit the facts, not the prose.
Quick Reference
| Field | Value |
|---|---|
| Country | India (Republic of India) |
| Currency | INR (Indian Rupee) |
| Payroll frequency | Monthly (typically paid last working day or 1st of next month) |
| Tax year (Financial Year) | 1 April -- 31 March (FY 2025-26 = April 2025 to March 2026) |
| Primary legislation | Income Tax Act 1961 (being replaced by IT Act 2025 from 1 April 2026); EPF & MP Act 1952; ESI Act 1948; Payment of Bonus Act 1965; Payment of Gratuity Act 1972; Code on Wages 2019 |
| Tax authority | Central Board of Direct Taxes (CBDT) / Income Tax Department |
| PF authority | Employees' Provident Fund Organisation (EPFO) |
| ESI authority | Employees' State Insurance Corporation (ESIC) |
| Employee PF | 12% of Basic + DA |
| Employer PF | 12% of Basic + DA (split: 3.67% EPF + 8.33% EPS) |
| ESI Employee | 0.75% of gross wages |
| ESI Employer | 3.25% of gross wages |
| TDS on salary | Progressive slab rates (new regime default) |
| Minimum wage | State-specific (no single national minimum) |
| Filing | TDS deposit by 7th; PF/ESI by 15th; Form 24Q/138 quarterly |
| Skill version | 1.0 |
New Tax Regime Slabs -- FY 2025-26 (Default)
| Annual Taxable Income (INR) | Rate |
|---|---|
| Up to 4,00,000 | Nil |
| 4,00,001 -- 8,00,000 | 5% |
| 8,00,001 -- 12,00,000 | 10% |
| 12,00,001 -- 16,00,000 | 15% |
| 16,00,001 -- 20,00,000 | 20% |
| 20,00,001 -- 24,00,000 | 25% |
| Above 24,00,000 | 30% |
Old Tax Regime Slabs -- FY 2025-26 (Optional, Employee Must Opt)
| Annual Taxable Income (INR) | Rate |
|---|---|
| Up to 2,50,000 | Nil |
| 2,50,001 -- 5,00,000 | 5% |
| 5,00,001 -- 10,00,000 | 20% |
| Above 10,00,000 | 30% |
TDS Calculation Method
| Step | Detail |
|---|---|
| 1. Estimate annual salary | Project total CTC components for the year |
| 2. Deduct exemptions | Standard deduction; HRA/LTA (old regime only) |
| 3. Deduct Chapter VIA | 80C, 80D, 80CCD etc. (old regime only) |
| 4. Apply slab rates | New regime (default) or old regime (if opted) |
| 5. Deduct rebate u/s 87A | If income ≤ 12L (new) or ≤ 5L (old) |
| 6. Add 4% cess | On computed tax |
| 7. Divide by 12 | Monthly TDS = Annual tax / 12 |
Surcharge (Higher Incomes)
| Annual Income (INR) | Surcharge |
|---|---|
| 50L -- 1 Cr | 10% |
| 1 Cr -- 2 Cr | 15% |
| 2 Cr -- 5 Cr | 25% |
| Above 5 Cr | 25% (marginal relief applies) |
Employees' Provident Fund (EPF)
| Parameter | Detail |
|---|---|
| Employee contribution | 12% of Basic wages + Dearness Allowance (DA) |
| Wage ceiling for PF | INR 15,000/month (contributions mandatory up to this; voluntary above) |
| Minimum Basic + DA | Must be ≥ 50% of total remuneration (Labour Codes) |
| Applies to | Establishments with 20+ employees (10+ in notified sectors) |
Employee State Insurance (ESI)
| Parameter | Detail |
|---|---|
| Employee contribution | 0.75% of gross wages |
| Wage ceiling | INR 21,000/month (INR 25,000 for persons with disability) |
| Applies to | Establishments with 10+ employees where employee wages ≤ ceiling |
| Coverage | Medical, sickness, maternity, disability, dependants' benefit |
Professional Tax (PT)
| Parameter | Detail |
|---|---|
| Rate | State-specific (typically INR 150-200/month; max INR 2,500/year) |
| Applicability | Varies by state (Maharashtra, Karnataka, West Bengal, etc.) |
| Deducted by | Employer at source |
| Deposited | To state government monthly (by 15th-21st depending on state) |
Employer PF Contributions
| Component | Rate | On |
|---|---|---|
| EPF (Provident Fund) | 3.67% | Basic + DA |
| EPS (Pension Scheme) | 8.33% | Basic + DA (max INR 15,000) |
| EDLI (Life Insurance) | 0.50% | Basic + DA (max INR 15,000) |
| PF Admin charges | 0.50% | Basic + DA |
| Total employer PF burden | ~13.00% | On Basic + DA |
Employer ESI Contribution
| Parameter | Detail |
|---|---|
| Rate | 3.25% of gross wages |
| Wage ceiling | INR 21,000/month |
| Applies when | Any covered employee earns ≤ INR 21,000/month |
Employer Total Statutory Cost (Typical)
| Component | Rate | Base |
|---|---|---|
| EPF + EPS + EDLI + Admin | ~13% | Basic + DA |
| ESI (if applicable) | 3.25% | Gross wages |
| Gratuity provision | ~4.81% | Basic + DA (15/26 × salary for each year of service) |
| Bonus (statutory minimum) | 8.33% | Basic + DA (min) up to 20% (max) |
| LWF (Labour Welfare Fund) | State-specific | Nominal amount |
India does NOT have a single national minimum wage. Rates are set by:
Minimum Wages Authority Table
| Authority | Coverage |
|---|---|
| Central Government | Scheduled employments (railways, mines, ports) |
| State Governments | All other employments within the state |
| Skill classification | Unskilled, Semi-skilled, Skilled, Highly skilled |
Indicative Minimum Wages (2025-26, Selected States)
| State | Unskilled (INR/month approx.) | Skilled (INR/month approx.) |
|---|---|---|
| Delhi | 17,494 | 19,279 |
| Maharashtra | 13,500 | 15,500 |
| Karnataka | 13,500 | 15,800 |
| Tamil Nadu | 12,500 | 14,000 |
| West Bengal | 10,000 | 11,500 |
Working Hours and Overtime
| Parameter | Standard |
|---|---|
| Standard working hours | 8 hours/day, 48 hours/week |
| Overtime rate | 2× the ordinary rate of wages |
| Maximum overtime | Varies by state (Factories Act: limited hours) |
| Weekly rest | 1 day per week mandatory |
| Spread-over | Maximum 10.5 hours including rest intervals |
Mandatory Benefits
| Benefit | Detail |
|---|---|
| Earned Leave (EL/PL) | 1 day per 20 days worked (Factories); varies by state Shops & Est. Act |
| Casual Leave | Typically 7-12 days/year (state-specific) |
| Sick Leave | Typically 7-12 days/year (state-specific) |
| Maternity Leave | 26 weeks (first two children); 12 weeks (third+) |
| Paternity Leave | 15 days (Central Government; private sector varies) |
| Gratuity | 15 days salary × years of service / 26 (after 5 years) |
| Statutory Bonus | 8.33% to 20% of Basic + DA (establishments with 20+ employees) |
| Leave encashment | Unused EL encashable at separation or annually (per policy) |
| National/Festival holidays | Varies by state (typically 5-10 gazetted holidays) |
Gratuity Calculation
| Parameter | Detail |
|---|---|
| Formula | (15 × last drawn salary × years of service) / 26 |
| Salary for gratuity | Basic + DA |
| Eligibility | 5 years continuous service (relaxed for death/disability) |
| Maximum | INR 25,00,000 (tax-free limit; employer may pay more) |
| Tax treatment | Exempt up to limits under Section 10(10) |
Statutory Bonus
| Parameter | Detail |
|---|---|
| Minimum bonus | 8.33% of Basic + DA |
| Maximum bonus | 20% of Basic + DA |
| Eligibility | Employees with Basic + DA ≤ INR 21,000/month |
| Calculation base | Capped at INR 7,000/month (or actual if lower) |
| Payment deadline | Within 8 months of closing of accounting year |
Indian employers MUST issue monthly payslips under the Code on Wages 2019 and various state Shops and Establishments Acts. Required elements:
Payslip Elements
| Element | Mandatory |
|---|---|
| Employer name and establishment code | Yes |
| Employee name, ID, designation | Yes |
| Pay period (month) | Yes |
| Basic salary | Yes |
| Dearness Allowance (DA) | Yes (if applicable) |
| House Rent Allowance (HRA) | Yes (if applicable) |
| Special allowances | Yes |
| Overtime earnings | Yes (if applicable) |
| Gross salary | Yes |
| PF employee deduction (12%) | Yes |
| ESI employee deduction (0.75%) | Yes (if applicable) |
| Professional Tax | Yes (if applicable) |
| TDS (income tax) | Yes |
| Other deductions (LWF, advances, loans) | Yes |
| Net salary payable | Yes |
| Employer PF contribution (shown) | Recommended |
| Leave balance | Recommended |
| YTD earnings and deductions | Recommended |
| Bank account details | Common practice |
CTC (Cost to Company) Structure -- Typical
| Component | Typical % of CTC |
|---|---|
| Basic salary | 40-50% |
| HRA | 40-50% of Basic |
| Special Allowance | Flexible component |
| Employer PF | 12% of Basic |
| Employer ESI (if applicable) | 3.25% of gross |
| Gratuity (funded) | 4.81% of Basic |
| Medical insurance (group) | Fixed premium |
Filing Obligations
| Filing | Frequency | Deadline | Authority |
|---|---|---|---|
| TDS deposit (Challan 281) | Monthly | 7th of following month (March: 30 April) | CBDT/IT Department |
| PF ECR (Electronic Challan cum Return) | Monthly | 15th of following month | EPFO |
| ESI contribution | Monthly | 15th of following month | ESIC |
| ESI employee details return | Monthly | 21st of following month | ESIC |
| Professional Tax | Monthly | State-specific (10th-21st) | State Government |
| Form 24Q / Form 138 (TDS quarterly return) | Quarterly | 31 Jul / 31 Oct / 31 Jan / 31 May | CBDT |
| Form 16 / Form 130 (TDS certificate) | Annual | 15 June | To employees |
| PF Annual Return (Form 6A/3A) | Annual | 25 April | EPFO |
| ESI Annual Return | Semi-annual | 11 May / 12 November | ESIC |
Key Filing Details
| Filing | Detail |
|---|---|
| Challan 281 (TDS) | Online payment via NSDL/TIN portal; generates BSR code for Form 24Q |
| ECR (PF) | Upload member-wise file on EPFO Unified Portal; payment via approved banks |
| Form 24Q → Form 138 | Form 24Q replaced by Form 138 under Income Tax Act 2025 (from FY 2026-27) |
| Form 16 → Form 130 | Form 16 replaced by Form 130 under IT Act 2025 |
Penalties
| Violation | Penalty |
|---|---|
| Late TDS deposit | 1%/month (from due date to deposit) + 1.5%/month (from deduction to deposit if not deducted on time) |
| Late TDS return | INR 200/day until filed (max = TDS amount); plus INR 10,000-1,00,000 under Section 271H |
| Late PF deposit | 12% p.a. interest + damages up to 25% of arrears |
| Late ESI | 12% p.a. interest + damages up to 25% |
| Non-issuance of Form 16/130 | Penalty under Section 272A: INR 500/day |
Monthly CTC breakdown:
Basic salary: INR 41,667 (50% of CTC)
HRA: INR 16,667
Special Allowance: INR 14,583
Employer PF (12% of Basic): INR 5,000
Employer ESI (if applicable): INR 0 (gross > 21,000)
Gratuity provision: INR 2,003
Medical insurance: INR 1,250
Monthly CTC: INR 83,333
Monthly deductions:
Employee PF (12% of Basic): -INR 5,000
Professional Tax: -INR 200
TDS (new regime, ~5.5%): -INR 3,750
Gross salary (excl employer PF/gratuity): INR 75,000
Net monthly salary: INR ~66,050
Gross monthly salary: INR 18,000
Basic + DA: INR 9,000
HRA: INR 4,500
Other allowances: INR 4,500
Employee deductions:
PF (12% of 9,000): -INR 1,080
ESI (0.75% of 18,000): -INR 135
Professional Tax: -INR 0 (below threshold in most states)
TDS: -INR 0 (below taxable threshold)
Net salary: INR 16,785
Employer cost:
Gross salary: INR 18,000
+ Employer PF (13% of 9,000): +INR 1,170
+ Employer ESI (3.25%): +INR 585
+ Gratuity provision: +INR 433
= Total employer cost: INR ~20,188
Gross salary: INR 15,00,000
- Standard deduction: -INR 75,000
= Taxable income: INR 14,25,000
Tax calculation:
0 -- 4,00,000: NIL = 0
4,00,001 -- 8,00,000: 5% = 20,000
8,00,001 -- 12,00,000: 10% = 40,000
12,00,001 -- 14,25,000: 15% = 33,750
Total tax: INR 93,750
+ Cess 4%: +INR 3,750
= Total annual TDS: INR 97,500
Monthly TDS: INR 8,125
Interaction with Other Skills
| Skill | Interaction |
|---|---|
| india-einvoice | No direct interaction (e-invoicing is GST/B2B; payroll is separate) |
| payroll-workflow-base | General payroll processing workflow; India-specific overrides in this skill |
This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional before filing or acting upon.
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Review status
Accountant-reviewed
Reviewed by a named licensed practitioner against the stated sources, as general reference material.
Accountant-reviewed
Reviewed by Mayur Deokar · 6 June 2026
A named accountant reviewed this complete Guide version within the stated scope. It is not a guarantee.
View review record →Other India computations in the OpenAccountants Tax Library.
Income-tax Act 1961 s 115BAC
Compute taxable salary after exemptions
Project annual gross salary, then subtract the standard deduction for salaried employees. In the old regime only, also subtract the HRA exemption and the Chapter VIA deductions the employee declared.
Watch for: Standard deduction applies in both regimes; HRA exemption applies only in the old regime.
Income-tax Act 1961 ss 16 and 10(13A)
Compute annual tax and monthly TDS under section 192
Apply the slab rates for the elected regime, apply the section 87A rebate if eligible, add the 4% Health and Education Cess, then divide the annual tax across the remaining pay periods to set the monthly TDS.
Watch for: TDS on salary is estimated on projected annual income and spread over the year under section 192.
Income-tax Act 1961 ss 192, 115BAC and 87A
Deduct employee PF and ESI
Deduct employee EPF at the statutory rate on Basic plus DA up to the PF wage ceiling, and, where the employee's gross is within the ESI ceiling, deduct employee ESI on gross wages.
Watch for: PF is mandatory up to the wage ceiling and voluntary above it; ESI applies only while wages stay within the ceiling.
EPF and MP Act 1952; ESI Act 1948
Deduct professional tax
Deduct professional tax at the employee's state rate, capped at the statutory annual maximum. Skip it in states that do not levy PT.
Watch for: Professional tax is a state levy; rates and thresholds vary by state.
Compute employer statutory cost
Add the employer PF burden (EPF, EPS, EDLI and admin charges) on Basic plus DA and, where ESI applies, employer ESI on gross wages, then reconcile back to the CTC.
Watch for: EPS and EDLI are capped at the PF wage ceiling.
EPF and MP Act 1952; ESI Act 1948
Deposit TDS, PF and ESI on time
Deposit TDS by Challan 281 by the 7th of the following month (March by 30 April), and deposit PF and ESI by the 15th. Track late-deposit interest and damages.
Watch for: Late deposits attract monthly interest plus damages.
Income-tax Act 1961 s 192; EPF and MP Act 1952; ESI Act 1948
File Form 24Q, issue Form 16, and deliver the working paper
File the quarterly Form 24Q TDS return by its due date and issue Form 16 to each employee by 15 June. Assemble the CTC-to-net computation, the deduction schedule and the deposit trail as the payroll working paper, then offer Mayur Deokar a review before anything is filed.
Income-tax Act 1961 s 192
What Mayur checks before signing off
Ready to work through your own numbers? Add this Guide to your AI and it takes it from here, then routes the finished paper for an accountant to review.
Add to your AIEPS
8.33% (capped ₹15,000)EPF Act
EDLI
0.50% (capped ₹15,000)EPF Act
PF Admin
0.50%EPFO
Total employer PF
~13%EPF Act
Employer ESI Rate
3.25% of grossESI Act
Employer ESI Wage ceiling
₹21,000/monthESI Act
TDS deposit
7th of following month (30th April for March)ITA
PF/ESI deposit
15th of following monthEPF/ESI Acts
Form 24Q (TDS return)
Last day of the month following the end of the quarterITA
Form 16 (annual certificate)
By 15 JuneITA
Quick Reference
| Field | Value | |---|---| | Country | India (Republic of India) | | Currency | INR (Indian Rupee) | | Payroll frequency | Monthly (typically paid last working day or 1st of next month) | | Tax year (Financial Year) | 1 April -- 31 March (FY 2025-26 = April 2025 to March 2026) | | Primary legislation | Income Tax Act 1961 (being replaced by IT Act 2025 from 1 April 2026); EPF & MP Act 1952; ESI Act 1948; Payment of Bonus Act 1965; Payment of Gratuity Act 1972; Code on Wages 2019 | | Tax authority | Central Board of Direct Taxes (CBDT) / Income Tax Department | | PF authority | Employees' Provident Fund Organisation (EPFO) | | ESI authority | Employees' State Insurance Corporation (ESIC) | | Employee PF | 12% of Basic + DA | | Employer PF | 12% of Basic + DA (split: 3.67% EPF + 8.33% EPS) | | ESI Employee | 0.75% of gross wages | | ESI Employer | 3.25% of gross wages | | TDS on salary | Progressive slab rates (new regime default) | | Minimum wage | State-specific (no single national minimum) | | Filing | TDS deposit by 7th; PF/ESI by 15th; Form 24Q/138 quarterly | | Skill version | 1.0 |
New Tax Regime Slabs -- FY 2025-26 (Default)
| Annual Taxable Income (INR) | Rate | |---|---| | Up to 4,00,000 | Nil | | 4,00,001 -- 8,00,000 | 5% | | 8,00,001 -- 12,00,000 | 10% | | 12,00,001 -- 16,00,000 | 15% | | 16,00,001 -- 20,00,000 | 20% | | 20,00,001 -- 24,00,000 | 25% | | Above 24,00,000 | 30% |
Cess
Plus: 4% Health and Education Cess on total tax.
Rebate under Section 87A
Income up to INR 12,00,000 is effectively tax-free (rebate of up to INR 60,000).
Standard deduction
INR 75,000 for salaried employees (new regime).
Old Tax Regime Slabs -- FY 2025-26 (Optional, Employee Must Opt)
| Annual Taxable Income (INR) | Rate | |---|---| | Up to 2,50,000 | Nil | | 2,50,001 -- 5,00,000 | 5% | | 5,00,001 -- 10,00,000 | 20% | | Above 10,00,000 | 30% |
Cess
Plus: 4% Health and Education Cess.
Old regime deductions
Section 80C (up to 1.5L), 80D (health insurance), HRA, LTA, home loan interest (Section 24b), NPS (80CCD).
TDS Calculation Method
| Step | Detail | |---|---| | 1. Estimate annual salary | Project total CTC components for the year | | 2. Deduct exemptions | Standard deduction; HRA/LTA (old regime only) | | 3. Deduct Chapter VIA | 80C, 80D, 80CCD etc. (old regime only) | | 4. Apply slab rates | New regime (default) or old regime (if opted) | | 5. Deduct rebate u/s 87A | If income ≤ 12L (new) or ≤ 5L (old) | | 6. Add 4% cess | On computed tax | | 7. Divide by 12 | Monthly TDS = Annual tax / 12 |
Surcharge (Higher Incomes)
| Annual Income (INR) | Surcharge | |---|---| | 50L -- 1 Cr | 10% | | 1 Cr -- 2 Cr | 15% | | 2 Cr -- 5 Cr | 25% | | Above 5 Cr | 25% (marginal relief applies) |
Employees' Provident Fund (EPF)
| Parameter | Detail | |---|---| | Employee contribution | 12% of Basic wages + Dearness Allowance (DA) | | Wage ceiling for PF | INR 15,000/month (contributions mandatory up to this; voluntary above) | | Minimum Basic + DA | Must be ≥ 50% of total remuneration (Labour Codes) | | Applies to | Establishments with 20+ employees (10+ in notified sectors) |
Employee State Insurance (ESI)
| Parameter | Detail | |---|---| | Employee contribution | 0.75% of gross wages | | Wage ceiling | INR 21,000/month (INR 25,000 for persons with disability) | | Applies to | Establishments with 10+ employees where employee wages ≤ ceiling | | Coverage | Medical, sickness, maternity, disability, dependants' benefit |
Professional Tax (PT)
| Parameter | Detail | |---|---| | Rate | State-specific (typically INR 150-200/month; max INR 2,500/year) | | Applicability | Varies by state (Maharashtra, Karnataka, West Bengal, etc.) | | Deducted by | Employer at source | | Deposited | To state government monthly (by 15th-21st depending on state) |
Employer PF Contributions
| Component | Rate | On | |---|---|---| | EPF (Provident Fund) | 3.67% | Basic + DA | | EPS (Pension Scheme) | 8.33% | Basic + DA (max INR 15,000) | | EDLI (Life Insurance) | 0.50% | Basic + DA (max INR 15,000) | | PF Admin charges | 0.50% | Basic + DA | | **Total employer PF burden** | **~13.00%** | On Basic + DA |
Employer ESI Contribution
| Parameter | Detail | |---|---| | Rate | 3.25% of gross wages | | Wage ceiling | INR 21,000/month | | Applies when | Any covered employee earns ≤ INR 21,000/month |
Employer Total Statutory Cost (Typical)
| Component | Rate | Base | |---|---|---| | EPF + EPS + EDLI + Admin | ~13% | Basic + DA | | ESI (if applicable) | 3.25% | Gross wages | | Gratuity provision | ~4.81% | Basic + DA (15/26 × salary for each year of service) | | Bonus (statutory minimum) | 8.33% | Basic + DA (min) up to 20% (max) | | LWF (Labour Welfare Fund) | State-specific | Nominal amount |
Minimum Wages Authority Table
| Authority | Coverage | |---|---| | Central Government | Scheduled employments (railways, mines, ports) | | State Governments | All other employments within the state | | Skill classification | Unskilled, Semi-skilled, Skilled, Highly skilled |
Indicative Minimum Wages (2025-26, Selected States)
| State | Unskilled (INR/month approx.) | Skilled (INR/month approx.) | |---|---|---| | Delhi | 17,494 | 19,279 | | Maharashtra | 13,500 | 15,500 | | Karnataka | 13,500 | 15,800 | | Tamil Nadu | 12,500 | 14,000 | | West Bengal | 10,000 | 11,500 |
Proposed floor
INR 178/day (~INR 4,628/month)
Status
Not yet notified as of May 2026
State constraint
States cannot set minimum wages below this floor once notified
Working Hours and Overtime
| Parameter | Standard | |---|---| | Standard working hours | 8 hours/day, 48 hours/week | | Overtime rate | 2× the ordinary rate of wages | | Maximum overtime | Varies by state (Factories Act: limited hours) | | Weekly rest | 1 day per week mandatory | | Spread-over | Maximum 10.5 hours including rest intervals |
Mandatory Benefits
| Benefit | Detail | |---|---| | Earned Leave (EL/PL) | 1 day per 20 days worked (Factories); varies by state Shops & Est. Act | | Casual Leave | Typically 7-12 days/year (state-specific) | | Sick Leave | Typically 7-12 days/year (state-specific) | | Maternity Leave | 26 weeks (first two children); 12 weeks (third+) | | Paternity Leave | 15 days (Central Government; private sector varies) | | Gratuity | 15 days salary × years of service / 26 (after 5 years) | | Statutory Bonus | 8.33% to 20% of Basic + DA (establishments with 20+ employees) | | Leave encashment | Unused EL encashable at separation or annually (per policy) | | National/Festival holidays | Varies by state (typically 5-10 gazetted holidays) |
Gratuity Calculation
| Parameter | Detail | |---|---| | Formula | (15 × last drawn salary × years of service) / 26 | | Salary for gratuity | Basic + DA | | Eligibility | 5 years continuous service (relaxed for death/disability) | | Maximum | INR 25,00,000 (tax-free limit; employer may pay more) | | Tax treatment | Exempt up to limits under Section 10(10) |
Statutory Bonus
| Parameter | Detail | |---|---| | Minimum bonus | 8.33% of Basic + DA | | Maximum bonus | 20% of Basic + DA | | Eligibility | Employees with Basic + DA ≤ INR 21,000/month | | Calculation base | Capped at INR 7,000/month (or actual if lower) | | Payment deadline | Within 8 months of closing of accounting year |
Payslip Elements
| Element | Mandatory | |---|---| | Employer name and establishment code | Yes | | Employee name, ID, designation | Yes | | Pay period (month) | Yes | | Basic salary | Yes | | Dearness Allowance (DA) | Yes (if applicable) | | House Rent Allowance (HRA) | Yes (if applicable) | | Special allowances | Yes | | Overtime earnings | Yes (if applicable) | | Gross salary | Yes | | PF employee deduction (12%) | Yes | | ESI employee deduction (0.75%) | Yes (if applicable) | | Professional Tax | Yes (if applicable) | | TDS (income tax) | Yes | | Other deductions (LWF, advances, loans) | Yes | | Net salary payable | Yes | | Employer PF contribution (shown) | Recommended | | Leave balance | Recommended | | YTD earnings and deductions | Recommended | | Bank account details | Common practice |
CTC (Cost to Company) Structure -- Typical
| Component | Typical % of CTC | |---|---| | Basic salary | 40-50% | | HRA | 40-50% of Basic | | Special Allowance | Flexible component | | Employer PF | 12% of Basic | | Employer ESI (if applicable) | 3.25% of gross | | Gratuity (funded) | 4.81% of Basic | | Medical insurance (group) | Fixed premium |
Filing Obligations
| Filing | Frequency | Deadline | Authority | |---|---|---|---| | TDS deposit (Challan 281) | Monthly | 7th of following month (March: 30 April) | CBDT/IT Department | | PF ECR (Electronic Challan cum Return) | Monthly | 15th of following month | EPFO | | ESI contribution | Monthly | 15th of following month | ESIC | | ESI employee details return | Monthly | 21st of following month | ESIC | | Professional Tax | Monthly | State-specific (10th-21st) | State Government | | Form 24Q / Form 138 (TDS quarterly return) | Quarterly | 31 Jul / 31 Oct / 31 Jan / 31 May | CBDT | | Form 16 / Form 130 (TDS certificate) | Annual | 15 June | To employees | | PF Annual Return (Form 6A/3A) | Annual | 25 April | EPFO | | ESI Annual Return | Semi-annual | 11 May / 12 November | ESIC |
Key Filing Details
| Filing | Detail | |---|---| | Challan 281 (TDS) | Online payment via NSDL/TIN portal; generates BSR code for Form 24Q | | ECR (PF) | Upload member-wise file on EPFO Unified Portal; payment via approved banks | | Form 24Q → Form 138 | Form 24Q replaced by Form 138 under Income Tax Act 2025 (from FY 2026-27) | | Form 16 → Form 130 | Form 16 replaced by Form 130 under IT Act 2025 |
Penalties
| Violation | Penalty | |---|---| | Late TDS deposit | 1%/month (from due date to deposit) + 1.5%/month (from deduction to deposit if not deducted on time) | | Late TDS return | INR 200/day until filed (max = TDS amount); plus INR 10,000-1,00,000 under Section 271H | | Late PF deposit | 12% p.a. interest + damages up to 25% of arrears | | Late ESI | 12% p.a. interest + damages up to 25% | | Non-issuance of Form 16/130 | Penalty under Section 272A: INR 500/day |
Interaction with Other Skills
| Skill | Interaction | |---|---| | india-einvoice | No direct interaction (e-invoicing is GST/B2B; payroll is separate) | | payroll-workflow-base | General payroll processing workflow; India-specific overrides in this skill |
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