Payroll Compliance Checklist for India: Monthly, Quarterly and Annual

The monthly checklist

Everything monthly hangs off the payroll run. Once salaries for a month are computed, the same numbers have to reach four authorities within a fortnight. Generate the challans and files from the run on the day salaries are paid, and the deadlines look after themselves.

Item	Authority	Due	Notes
TDS on salaries deposited	Income Tax Department	7th of the following month; 30 April for March	Challan ITNS 281. Late payment attracts interest at 1.5% a month
PF ECR filed and contribution paid	EPFO	15th of the following month	The ECR lists every member, their wages and both contributions; return and payment happen together on the unified portal
ESI contribution paid	ESIC	15th of the following month	Employee 0.75% and employer 3.25% of gross for everyone at ₹21,000 or below. Late payment carries 12% simple interest a year
Professional tax deposited	State commercial tax department	Varies: the 10th to the last day of the following month	Maharashtra by the last day of the month, Karnataka by the 20th, Andhra Pradesh and Telangana by the 10th, West Bengal by the 21st. Tamil Nadu and Kerala are half-yearly

The PF and ESI dates are the same every month; the professional-tax date depends on the state each branch is in.

Two things trip companies up here: cash flow, when the challan waits for a receivable and the 15th passes, and a branch in a professional-tax state that head office has forgotten. The tax follows the place of work, so the state slabs and due dates apply to the branch, not the registered office.

The quarterly and half-yearly checklist

The quarterly item is the salary TDS return. Form 24Q reports the salary paid and tax deducted per employee in the quarter; the fourth-quarter return also carries the annual salary detail that Form 16 Part B is built from, so it is the one to get right.

Item	Period	Due
Form 24Q, quarter 1	April to June	31 July
Form 24Q, quarter 2	July to September	31 October
Form 24Q, quarter 3	October to December	31 January
Form 24Q, quarter 4	January to March, with annual salary detail	31 May
ESI half-yearly return	April to September; October to March	11 November; 11 May
Labour welfare fund (half-yearly states)	Deducted in June and December in Maharashtra, Gujarat, Delhi and West Bengal	Mostly 15 July and 15 January

ESI contribution periods end on 30 September and 31 March; the return follows within 42 days, and an employee who crossed ₹21,000 mid-period stays covered until the period ends.

The annual checklist

Item	Authority	Due	Notes
Investment declarations and proofs	Internal	Declarations in April; proofs by January	Form 12BB at the start of the year, proofs verified before the last quarter so March TDS is an adjustment and not a shock
Form 16 issued to employees	Employer to employee	15 June	Part A from TRACES, Part B from your payroll; employees file returns by 31 July
Statutory bonus paid	Employer to employee	Within 8 months of the financial year end (30 November for an April to March year)	Minimum 8.33% of wages for employees earning up to ₹21,000 a month, computed on ₹7,000 or the minimum wage, whichever is higher
Form D, annual bonus return	Labour inspector	1 February	The return under the Payment of Bonus Act for the previous accounting year
Labour welfare fund (annual states)	State labour welfare board	15 January in Karnataka; 31 January in Tamil Nadu	Amounts are small; missing them is not
Shops and Establishments annual return	State labour department	State-specific, commonly 31 January or 15 February	Employees, holidays and hours under the state Act; several states file online
Minimum wage revisions applied	State labour department	As notified; most states revise the dearness component twice a year	Check each state’s notification and revise structures that sit on the floor
Gratuity paid to leavers	Employer to employee	Within 30 days of becoming due	After five years of continuous service, 15 days of last-drawn basic and DA per completed year (15/26 of a month)

Gratuity and minimum wages are event-driven rather than dated, but they belong on the annual review because that is when they are forgotten.

Registers to maintain

Every return above is built from a register, and an inspection begins with the registers. The Ease of Compliance rules of 2017 combined the registers under the central labour Acts into a small set of forms, and most states accept them electronically.

Employee register: every person employed, with joining date, designation, wages, and PF and ESI numbers.
Wage register and wage slips: gross, each deduction and net, per employee per month, with a slip issued to each.
Muster roll or attendance register: daily presence, absence, leave and weekly off, judged against the shift.
Overtime register: hours beyond the daily or weekly limit, and the rate paid, which must be double the ordinary rate.
Registers of fines, deductions and advances, and a leave register with entitlement, leave taken, balance and encashment per employee.
Bonus register (Form C), gratuity nominations (Form F), PF Form 11 declarations and nominations, and the ESI accident register.

Keep them for the period the rule prescribes, commonly three years, and keep them as reports from the payroll and attendance data rather than as separate documents. A register reconstructed for an inspector is the one that contradicts the challan.

What happens if you miss it

Provident fund

A late PF payment attracts interest under section 7Q at 12% a year on the amount due, and damages under section 14B that rise with the delay: 5% a year for a delay of up to two months, 10% for two to four, 15% for four to six, and 25% for more than six months. Both are recovered from the employer.

ESI

Late ESI contributions carry simple interest at 12% a year and damages on a rising scale similar to PF. The larger exposure is an uncovered employee: if a person who should have been insured falls ill or is injured, the employer can be held liable for the benefit ESIC would have paid.

TDS

Under section 201(1A), tax that should have been deducted but was not attracts interest at 1% a month from the date it was deductible until it is deducted; tax deducted but not deposited attracts 1.5% a month from the date of deduction until payment, with part of a month counted as a month. A late Form 24Q costs ₹200 a day under section 234E, capped at the tax deductible.

Professional tax, bonus and gratuity

Professional tax defaults attract interest and penalties under each state’s Act. Unpaid bonus is recoverable with a penalty under the Code on Wages. Gratuity paid after 30 days carries simple interest at the notified rate from the due date.

Running the checklist from the payroll run

When payroll computes PF, ESI, professional tax and TDS inside the run, the ECR file, the ESI list, the professional-tax summary per state, the Form 24Q data and the bank file come out of the same numbers on the same day, and filing is uploading what the run produced. That is how the payroll module works, and why the challan never disagrees with the payslip.

The compliance calendar lists every item on this page for the year and can be subscribed to as a calendar file, so the 7th and the 15th appear in the finance diary without anyone typing them. The PF calculator and ESI calculator settle who appears on the challan in the first place.

Every PF, ESI, TDS, PT and LWF date for the year, on one page and as a calendar file your finance team can subscribe to.

Open the compliance calendar

Questions people ask

What is the due date for PF payment?

The 15th of the month following the wage month. The ECR is filed and the contribution paid together on the EPFO unified portal, so the return and the payment share the date. Payment after the 15th attracts interest at 12% a year under section 7Q and damages under section 14B rising from 5% to 25% a year with the delay.

When is TDS on salary due?

Tax deducted from salaries in a month must be deposited by the 7th of the following month, and tax deducted in March by 30 April. Form 24Q, the quarterly return, is due on 31 July, 31 October, 31 January and 31 May. Late deposit attracts interest at 1.5% a month under section 201(1A); a late return costs ₹200 a day under section 234E.

When must statutory bonus be paid?

Within eight months of the close of the accounting year, which for an April to March year is 30 November. It is payable to employees earning up to ₹21,000 a month, at a minimum of 8.33% and a maximum of 20%, computed on ₹7,000 or the minimum wage for the job, whichever is higher. The Form D return follows by 1 February.

Is professional tax paid monthly?

In most states that levy it, yes, with the date set by the state: the last day of the following month in Maharashtra, the 20th in Karnataka, the 10th in Andhra Pradesh and Telangana, the 21st in West Bengal. Tamil Nadu and Kerala collect it half-yearly through local bodies. Delhi, Haryana, Uttar Pradesh, Rajasthan and several others levy no professional tax at all.

Which registers must an employer maintain for payroll?

An employee register, a wage register with wage slips issued, a muster roll or attendance register, an overtime register, registers of fines, deductions and advances, a leave register, the bonus register, gratuity nominations, PF Form 11 declarations and the ESI accident register. The 2017 Ease of Compliance rules combined the central ones into a small set of forms, and most states accept them electronically.