Why Payroll Compliance Is High-Stakes in India
India has one of the most complex statutory compliance frameworks for employment in the world. A company with 100 employees must track and file across 6+ statutory schemes, each with its own deadlines, forms, rates, and penalties. Miss one — and you're looking at interest charges, penalties, and in serious cases, criminal liability for the company director.
This checklist covers everything you need to stay compliant month by month, quarter by quarter, and year by year.
Monthly Payroll Compliance Tasks
By the 7th of Each Month
- TDS Deposit (Section 192) — Deposit TDS deducted from employee salaries in the previous month to the Income Tax Department via Challan ITNS 281. Late deposit attracts 1.5% interest per month.
- Professional Tax (most states) — Deposit Professional Tax deducted from employees to the respective State Government. Deadline varies: Maharashtra is the 31st, Karnataka is the 20th, West Bengal varies by type.
By the 15th of Each Month
- PF Contribution Deposit — Deposit both employee (12%) and employer (12%) contributions to EPFO. This includes the EPS (8.33% of employer share), EDLI, and administrative charges. Total employer outgo is typically 13–13.5% of basic wages. Late deposit: 12% p.a. interest + damages up to 25%.
- ECR Filing — File the Electronic Challan cum Return (ECR) on the EPFO unified portal for all PF subscribers. This is the monthly return that updates individual member accounts.
By the 21st of Each Month
- ESIC Contribution Deposit — Deposit employee (0.75%) and employer (3.25%) ESIC contributions. Applicable for employees earning up to ₹21,000/month. Late payment attracts 12% interest p.a.
- ESIC Monthly Return — File the monthly return on the ESIC portal updating contribution records for each insured employee.
By the Last Day of Each Month
- Salary Payment — The Payment of Wages Act requires wages to be paid by the 7th of the following month (for establishments with 1000+ employees) or by the 10th (for others). Best practice is last day of the current month.
- Payslip Generation and Distribution — All employees must receive a written payslip showing gross pay, deductions, and net pay. This is a legal requirement under the Payment of Wages Act.
Quarterly Compliance Tasks
TDS Quarterly Returns (Form 24Q)
| Quarter | Period | Filing Deadline |
|---|---|---|
| Q1 | April – June | 31 July |
| Q2 | July – September | 31 October |
| Q3 | October – December | 31 January |
| Q4 | January – March | 31 May |
ESIC Bi-Annual Return (Form 5)
- April – September: File by 11 November
- October – March: File by 11 May
Annual Compliance Tasks
PF Annual Return (Form 3A / Form 6A)
- File member-wise annual PF contribution statement (Form 3A) by 30 April each year
- File consolidated annual return (Form 6A) by 30 April
Form 16 — TDS Certificate
- Issue Form 16 (Part A + Part B) to all employees by 15 June after the financial year end
- Part A: TDS details from TRACES portal
- Part B: Salary breakup, exemptions, deductions claimed
Gratuity Provision
- Review and update gratuity liability for all employees who have completed ≥5 years (or ≥1 year for fixed-term contract workers under new Labour Codes)
- Ensure provision is reflected in annual accounts
Bonus (Payment of Bonus Act)
- Pay annual bonus within 8 months of financial year end (i.e., by 30 November for April–March year)
- Minimum bonus: 8.33% of annual wages; Maximum: 20%
- Applicable for employees earning up to ₹21,000/month
Labour Welfare Fund (LWF)
- Frequency and deadline vary by state
- Most states: bi-annual (June 30 and December 31)
- File online on state LWF portal
State-Specific Compliance Calendar
Professional Tax and Labour Welfare Fund rules differ by state. Here are the most common:
| State | PT Slab (max) | PT Deposit Deadline | LWF |
|---|---|---|---|
| Maharashtra | ₹200/month | Last day of month | Yes (bi-annual) |
| Karnataka | ₹200/month | 20th of next month | Yes (annual) |
| Tamil Nadu | ₹208/month | Last day of month | Yes (bi-annual) |
| Andhra Pradesh / Telangana | ₹200/month | 10th of next month | Yes |
| West Bengal | ₹200/month | 21st of next month | Yes (bi-annual) |
| Delhi / Haryana / UP / Rajasthan | No PT | — | Varies |
Penalty Reference Table
| Violation | Penalty |
|---|---|
| Late PF deposit | 12% p.a. interest + damages 5–25% of arrears |
| Non-remittance of PF | Criminal prosecution, up to 3 years imprisonment |
| Late ESIC deposit | 12% p.a. simple interest |
| Late TDS deposit | 1.5% per month + ₹200/day late filing fee |
| Non-issuance of Form 16 | ₹100 per day per employee |
| Non-payment of bonus | Fine up to ₹1,000 + 6 months imprisonment |
How HRMS Automates Your Compliance Calendar
Instead of maintaining this checklist manually, modern HRMS platforms like AttendancePay handle most of it automatically:
- Auto PF/ESIC calculation on every payroll run — correct rates, correct ceilings, correct components
- One-click challan generation — Download ECR for EPFO, contribution file for ESIC, TDS challan — ready to upload to portals
- Compliance calendar alerts — Email reminders 3 days before each deadline
- Form 16 generation — Auto-generated Part A + Part B for all employees
- State-specific PT rules — Pre-configured for all 21 professional tax states
- Audit logs — Every calculation is logged with timestamp, rate, and base for inspection-ready records
Your Compliance Quick-Reference Card
- 7th — TDS deposit + PT (most states)
- 15th — PF deposit + ECR filing
- 21st — ESIC deposit + return
- Last day — Salary payment + payslips
- Quarterly — Form 24Q (TDS return)
- Bi-annual — ESIC Form 5 + LWF
- Annual — Form 3A/6A (PF), Form 16, Bonus, Gratuity review
Never miss a compliance deadline again. AttendancePay calculates, generates, and reminds you — automatically. Start your free trial →
Related tools: Track every deadline automatically with our Payroll Compliance Calendar, and check contributions with the ESI Calculator.
