End-to-end monthly payroll processing for Indian employers: salary structuring (CTC → net pay), TDS on salary under Section 192 (new vs old regime), EPF/ESI/PT computation, ECR filing with EPFO, and quarterly Form 24Q/Form 16 TDS returns. Covers both payroll run and annual reconciliation.
Verify employer registration numbers (TAN, PAN, EPFO establishment code, ESIC code) and build the employee master: PAN, UAN, date of joining, salary structure election (CTC components), and tax regime choice (new vs old). Confirm which states are involved for Professional Tax applicability. Establish the payroll calendar and cut-off dates.
Design or validate the CTC (Cost to Company) structure for each employee grade: split between Basic + DA (PF wage base), HRA, LTA, Special Allowance, and other components. Ensure Basic + DA is at least 50% of total remuneration (Labour Codes). Compute the employer's total statutory cost including EPF (13%), ESI (3.25% where applicable), gratuity provision (~4.81%), and statutory bonus.
Run the monthly payroll for each employee: compute gross earnings, deduct statutory items (EPF employee 12%, ESI employee 0.75%, Professional Tax), estimate full-year tax liability under chosen regime, and divide by remaining months to arrive at monthly TDS (Section 192). Apply Section 87A rebate for eligible employees. Deduct surcharge for high earners above ₹50 lakh annual income.
Deposit all statutory dues by the 7th (TDS) and 15th (EPF and ESI) of the following month. Upload the Electronic Challan cum Return (ECR) on the EPFO Unified Portal with employee-wise UAN, wage details, and contribution breakup (EPF + EPS + EDLI + Admin). Pay ESI challan via the ESIC portal. Generate ITNS 281 challan for TDS deposit with the bank.
File Form 24Q (quarterly TDS return for salary) by the due date for each quarter: Q1 (Apr–Jun) by 31 Jul, Q2 (Jul–Sep) by 31 Oct, Q3 (Oct–Dec) by 31 Jan, Q4 (Jan–Mar) by 31 May. Q4 requires additional Annexure II data (full-year salary details, deductions, regime elected, challan mapping). Use NSDL's RPU (Return Preparation Utility) or TRACES-enabled payroll software. Validate with FVU (File Validation Utility) before upload.
After Q4 Form 24Q is filed and processed by TRACES, download and issue Form 16 (Part A from TRACES, Part B employer-generated) to all employees by 15 June. Reconcile TDS deducted with TDS deposited; identify and correct any short-deduction or excess-deduction. Prepare year-end summary of EPF contributions (Form 3A/6A now automated via monthly ECR) and ESI half-yearly return (Form 5) due by 11 November.
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