Payroll Compliance Checklist for Growing Businesses
PF, ESI, professional tax, and TDS on salary — the four recurring obligations payroll actually creates.
The moment a business hires its first employee, payroll stops being a spreadsheet exercise and becomes a compliance obligation with several moving parts, each on its own deadline.
Monthly Obligations
- TDS on salary (Section 192) — deducted based on the employee's declared investments/regime, deposited by the 7th of the following month
- PF contribution (if applicable) — deposited by the 15th of the following month via ECR filing
- ESI contribution (if applicable) — deposited by the 15th of the following month
- Professional tax — deducted and deposited per the applicable state's schedule (rates and due dates vary by state)
Annual Obligations
- Form 16 issuance to employees, by 15 June following the financial year
- Form 24Q (TDS return for salary) filed quarterly
- Bonus payment under the Payment of Bonus Act, where applicable, and gratuity provisioning for eligible employees
The Real-World Complication
State-specific professional tax rules are the most common source of payroll errors for businesses operating across multiple states — rates, slabs, and even the concept of a registration certificate versus an enrolment certificate differ meaningfully between, say, Maharashtra, Karnataka, and West Bengal. A business hiring its first employee in a new state should treat professional tax as a fresh compliance item to research, not an extension of what worked in the home state.
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