Kuzhu payroll is built for India: PF, ESI, professional tax and TDS are computed inside the run, on attendance and leave the system already holds. Structures with any component you use, arrears, full-and-final settlements, bank files and payslips your staff can read — with the challans and registers your accountant expects.
Why it exists
Payroll software for India is judged on one afternoon a month: the run. Kuzhu computes gross to net for every employee — earnings, deductions, arrears, loans, reimbursements, loss of pay — with PF, ESI, professional tax and TDS calculated inside the run, not reconciled afterwards in a spreadsheet. Attendance and leave are already in the system, so the run starts from payable days that are simply true.
Statutory compliance is the part you cannot get almost right. Provident fund with its wage ceilings and EPS split, ESI across contribution periods, professional tax by the slab of the state the employee actually works in, and income tax across old and new regimes with declarations and proofs — each computed per employee per month, each producing the artefact the portal wants: ECR file, ESI return, PT statement, Form 24Q quarter by quarter.
Salary structure is configuration, not code: define pay components — basic, HRA, allowances, employer costs — with formulas, caps and statutory applicability, and compose structures per grade or per person. Revisions carry effective dates, so an increment applied in June for April generates arrears the run computes on its own. Every payslip shows the breakup Indian employees actually read, and every number on it can be traced to a rule.
The outcome
“A payroll month that closes in hours, and an audit that finds nothing.”
Feature by feature
Start
01
Salary structures with earnings, deductions and employer costs, versioned by revision
02
PF, ESI, PT (state-wise) and TDS computed in the run, with returns-ready registers
03
LOP straight from attendance — no re-keying, no argument
Outcome
How it works
Most teams have this live inside the first month — the workspace exists on day one, and week three is a parallel run against whatever you use today.
Pay components with formulas and statutory flags compose into salary structures. What attracts PF, what attracts ESI and what is taxed is decided here, once.
Attendance, approved leave, expense reimbursements, loan EMIs and one-off adjustments gather against each employee as the month runs.
The run computes gross to net with statutory for everyone in the pay group. Review flags — new joiners, exits, unusual deltas — before anything is approved.
Approve the run, export the bank transfer file in your bank’s format, and publish payslips to self-service in one motion.
Worth a closer look
Buyer questions
2 answers
The answer
Income tax is projected annually per employee — regime chosen, declarations captured, proofs verified in the proof window — and deducted monthly with the projection updated as salary changes. Form 16 and quarterly 24Q come out of the same engine. When an employee asks why this month’s TDS moved, the answer is the projection sheet, on screen, with the change highlighted.
The answer
A backdated increment computes arrears component-wise from the effective date and taxes them correctly in the month paid. Loans and salary advances run EMI schedules that pause on LOP months and settle at exit. Off-cycle payments — bonuses, incentives, final settlements — run as their own payouts with their own tax treatment, without hand-editing the main run.
Questions
Something else on your mind? +91 82093 73274 — a person answers, mon–sat, 10am–7pm ist.
Terms used here
CTCCost to Company
CTC is the total amount a company spends on an employee in a year, including salary, employer contributions and benefits, not what the employee receives in hand.
Gross salary
Gross salary is the total pay earned in a period before any deductions, made up of basic, allowances and any variable pay.
Net salary
Net salary, or take-home, is what remains after statutory and voluntary deductions are subtracted from gross salary.
Basic salary
Basic salary is the fixed core component of pay on which PF, gratuity, HRA and most statutory calculations are based.
Dearness allowanceDA
Dearness allowance is a cost-of-living component, common in government and public-sector pay, that is added to basic for PF and gratuity purposes.
HRAHouse Rent Allowance
HRA is an allowance paid towards rented accommodation that is partly exempt from income tax under the old regime.
Special allowance
Special allowance is the balancing component of a salary structure that absorbs whatever gross is left after basic, HRA and fixed allowances.
Salary structure
A salary structure is the set of components, rules and percentages that turns a CTC into monthly earnings and deductions.
Payslip
A payslip is the monthly statement given to an employee showing earnings, deductions, net pay and the statutory numbers behind them.
Payroll cycle
The payroll cycle is the recurring sequence of collecting attendance and inputs, computing pay, approving, paying and filing for one pay period.
Arrears
Arrears are amounts owed for an earlier period and paid in a later payroll, usually after a backdated increment, a late attendance correction or a missed component.
Payroll reconciliation
Payroll reconciliation is the check that this month's payroll totals agree with last month's plus explained changes, and that statutory registers agree with the payslips.
Full and final settlementF&F
Full and final settlement is the last payment to a leaving employee, covering pending salary, leave encashment, gratuity and bonus, less notice-period shortfall and recoveries.
Provident FundEPF
The Employees' Provident Fund is a retirement savings scheme where employee and employer each contribute 12 percent of basic wages every month, managed by the EPFO.
EPSEmployees' Pension Scheme
EPS is the pension part of PF: 8.33 percent of the employer's contribution, on wages up to ₹15,000, goes to a fund that pays a monthly pension after 58.
VPFVoluntary Provident Fund
VPF is an employee's voluntary contribution to PF above the statutory 12 percent, earning the same interest, with no matching employer share.
ECRElectronic Challan cum Return
The ECR is the monthly PF return: a file listing every member, their wages and contributions, uploaded to the EPFO portal and paid in one step.
EDLIEmployees' Deposit Linked Insurance
EDLI is a life-insurance benefit attached to PF, funded by an employer contribution of 0.5 percent of wages up to ₹15,000, paying up to ₹7 lakh to a member's family.
ESIEmployees' State Insurance
ESI is a social-security scheme giving medical, sickness, maternity and disablement benefits to employees earning up to ₹21,000 a month, funded by a 0.75 percent employee and 3.25 percent employer contribution.
Contribution period
A contribution period is one of the two six-month spans in ESI, April to September and October to March, during which coverage, once established, continues regardless of wage changes.
Professional taxPT
Professional tax is a state-level tax on salaried income, deducted monthly by the employer according to the slab of the state where the employee works, capped at ₹2,500 a year.
LWFLabour Welfare Fund
Labour Welfare Fund is a small state-level contribution from employee and employer, deducted once or twice a year, that funds welfare schemes for workers.
Gratuity
Gratuity is a lump sum paid by the employer to an employee who leaves after five or more years of continuous service, at fifteen days' wages for every completed year.
Statutory bonus
Statutory bonus is the annual bonus employers with 20 or more employees must pay under the Payment of Bonus Act, between 8.33 and 20 percent of wages, to employees earning up to ₹21,000 a month.
Minimum wages
Minimum wages are the lowest daily or monthly wages an employer may pay, fixed by each state for categories of work and skill and revised with a dearness component twice a year.
Labour codes
The four labour codes consolidate 29 central labour laws into codes on wages, social security, industrial relations, and occupational safety and health.
Compliance calendar
A payroll compliance calendar is the list of statutory due dates for the year: PF and ESI by the 15th, TDS by the 7th, quarterly 24Q, half-yearly ESI returns, PT and LWF on state schedules.
TDSTax Deducted at Source
TDS on salary is the income tax an employer deducts every month from an employee's pay, based on projected annual income, and deposits with the government on the employee's behalf.
Form 16
Form 16 is the annual TDS certificate an employer gives each employee by 15 June, showing salary paid and tax deducted, used to file the income tax return.
Form 24Q
Form 24Q is the quarterly return of TDS on salaries that every employer files, with the fourth quarter carrying full-year salary details for each employee.
Old vs new tax regime
India offers two ways to compute income tax on salary: the old regime with exemptions and deductions, and the new regime with lower slab rates and almost none.
Standard deduction
Standard deduction is a flat amount subtracted from salary income before tax, ₹75,000 under the new regime and ₹50,000 under the old, with no proof required.
Perquisites
Perquisites are non-cash benefits an employee receives from the job, such as a company car, rent-free accommodation or stock options, valued and taxed as salary under prescribed rules.
Leave encashment
Leave encashment is the payment of unused earned leave as salary, either during service under policy or at exit as part of the final settlement.
Almost certainly — components are formula-driven with caps, prorating and statutory flags. If a rule genuinely cannot be expressed, we say so on the call, before you commit.
Revisions carry effective dates; the next run computes component-wise arrears from that date automatically and taxes them in the month paid.
A salary transfer file in your bank’s accepted format, generated from the approved run — no retyping into net-banking.
That is our standard onboarding: one month run in both systems, reconciled rupee for rupee, before anyone relies on it.
Works best beside
Other money modules that share the same employee record, so information moves with the person instead of between spreadsheets.
No polished slides. No imaginary employee data. Walk us through how your HR actually works today and see where Kuzhu can take the work off your team.
30 minutes · Your numbers · Your questions
What happens in the demo
Attendance, payroll, approvals — whatever is creating the most work.
You see exactly how the workflows connect instead of hearing a feature list.
If Kuzhu is not the right answer, we will tell you.
Ready when you are.
Kuzhu HRMS
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