Payroll software for India, built for the labour codes

How a payroll run works

Each month starts as a draft with a line for every employee due pay that month who has a salary set-up. Pay is worked out from the salary set-up, the attendance register and approved leave: fixed pay for a part month — joining, leaving or unpaid days — is paid for the days worked, and one-off amounts such as overtime or a bonus are added as entered. You can change any line and recalculate before anything is final.

Approving the draft issues the payslips and posts the payroll to your books: salaries, the employer's PF and ESI, and what you owe to employees and to the authorities. Each employee is told their payslip is ready and can open it in their own portal. When salaries go out, record the payment and it posts against your bank account. If something needs changing after approval, return the run to draft — the payslips are withdrawn and the posting is reversed.

The statutory part, worked out

• Provident fund: 12% from the employee and 12% from the employer, with 8.33% of wages up to the wage limit going to the pension scheme (EPS), plus EDLI and administration charges. The limit is the one in force for the wage month — ₹25,000 from September 2026, ₹15,000 before. Each employee can contribute on wages up to the limit, on actual wages, or not at all.
• ESI: 0.75% from the employee and 3.25% from the employer for employees earning up to ₹21,000 a month (₹25,000 for persons with disability), rounded up to the rupee. Cover decided at the start of a contribution period continues to its end.
• Professional tax by the state where the employee works — Maharashtra, Karnataka, West Bengal, Tamil Nadu (half-yearly), Telangana, Andhra Pradesh, Gujarat, Madhya Pradesh, Odisha and Assam are built in.
• TDS on salary: tax on the year's projected income under the employee's regime, less tax already deducted (including by a previous employer), spread over the months left. Tax caused by one-off pay is deducted in the month it is paid.
• Due dates: PF and ESI for a month's wages by the 15th of the next month, and TDS by the 7th (30 April for March) — shown on your dashboard as they come up.

What the labour codes changed

The Code on Wages, 2019 and the Code on Social Security, 2020 came into force on 21 November 2025. One change matters most for payroll: wages — the base for PF — now include all pay except a list of exclusions such as house rent allowance, conveyance, overtime, commission and statutory bonus, and those exclusions may make up at most half of total pay. Anything above half counts as wages anyway.

So a salary structure with a small basic and large allowances now attracts PF on more than the basic. Take total pay of ₹1,00,000 with a basic of ₹30,000 and ₹70,000 of house rent and conveyance allowances: half of pay is ₹50,000, so ₹20,000 is added back and wages are ₹50,000. Finvosmart works wages out this way for every employee, every month.

Files and records

• The PF electronic challan-cum-return (ECR) as the text file the EPFO unified portal takes.
• The ESI monthly contribution sheet, in the columns of the ESIC portal's upload template.
• A bulk salary transfer sheet most banks' corporate portals can read: one NEFT payment per employee.
• The salary register, with every employee's earnings, deductions and employer contributions.
• Every payslip as a PDF, or all of them in one ZIP file.
• Rows that can't go in a file — a missing UAN or bank account, say — are listed for you to fix; nothing is dropped silently.