Indian payroll compliance, explained plainly.
EPF, ESI, TDS, Professional Tax and LWF each have their own rules, thresholds and filing deadlines. Here's what each one actually means - and how INDPayroll automates it so you don't have to track it by hand.
EPF (Employees' Provident Fund)
A mandatory retirement savings scheme where both employer and employee typically contribute 12% of basic wages each month into the employee's PF account.
Applies to most establishments with 20 or more employees, and can apply voluntarily below that threshold.
INDPayroll calculates the employer and employee PF contribution automatically every cycle and prepares ECR-ready files for filing.
ESI (Employees' State Insurance)
A social security and health insurance scheme funded by employer and employee contributions, calculated as a percentage of gross wages up to a government-notified wage ceiling.
Applies to employees earning at or below the current ESI wage threshold, at establishments covered under the ESI Act.
INDPayroll checks each employee's eligibility automatically and calculates the correct contribution - no manual threshold-checking required.
TDS on salaries
Income tax that employers must deduct at source from an employee's salary, based on their projected annual tax liability under either the old or new tax regime.
Applies to any employee whose projected annual income exceeds the applicable exemption limit.
INDPayroll projects each employee's annual tax liability under both regimes, applies the lower one by default, and updates the deduction as investment proofs are submitted through the employee portal.
Professional Tax (PT)
A state-level tax on salaried income. Rates, slabs and whether it applies at all vary by state - not every state levies Professional Tax.
Applies to employees working in states that levy Professional Tax, based on that state's income slabs.
INDPayroll applies the correct state-specific PT slab automatically based on each employee's work location.
Labour Welfare Fund (LWF)
A small, state-administered welfare contribution from employers and employees, typically deducted half-yearly or annually depending on the state.
Applies in states that have notified an LWF scheme, usually to employees above a minimum wage threshold.
INDPayroll tracks each state's LWF schedule and includes it automatically in the relevant payroll cycle.
Common questions
Do all these compliance rules change every year?
What happens if I miss a PF or ESI filing deadline?
Does Professional Tax apply to every business in India?
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Our complete checklist covers PF, ESI, TDS & PT compliance in FY 2026-27. Leave your details and our team will get it to you.
One missed PF deadline costs more than a year of this.
Interest and damages under EPFO start the day you are late. INDPayroll files on time by default - free for your first 10 employees.