Payroll Outsourcing Services in India — End-to-End Statutory Compliance

Managing payroll in India is genuinely complex. Between Provident Fund (PF) contributions, ESIC, Tax Deducted at Source, Professional Tax varying by state, Labour Welfare Fund obligations, Form 16 generation, Form 24Q quarterly returns and a regulatory environment that changes with every Union Budget and labour code update, in-house payroll management consumes significant HR and finance bandwidth — and carries real compliance risk when errors occur. Penalties for late PF remittance, incorrect TDS computation, or missed ESIC filings can be substantial and the liability falls entirely on the employer.

JAI HR's payroll outsourcing service removes this burden entirely. With over 30 years of HR operations experience across India, ISO 9001:2015 certified processes and deep expertise in Indian statutory compliance across multiple states, JAI HR handles your complete payroll function — accurately, on time, every month. Whether you have 50 employees in a single city or 5,000 employees across multiple states, JAI HR's payroll team scales to your requirements. This page covers what the service includes, the specific compliance obligations JAI HR manages, the industries and company sizes served and how to get started with a consultation and custom quote.

What Payroll Outsourcing Covers

• 1
  Monthly Salary Processing End-to-end computation of gross-to-net salary for every employee. Includes all variable components, deductions, allowances, arrears, advance recoveries and loss-of-pay calculations based on attendance data provided by your HR team. Output: a validated payroll register and payment instruction file ready for bank disbursement.
• 2
  PF Management (Employees' Provident Fund) Monthly EPF contribution computation for all eligible employees — 12% employer contribution plus 12% employee contribution on basic + DA. ECR (Electronic Challan cum Return) filing via the EPFO portal, challan generation and payment coordination. PF passbook management and employee query resolution. New joiner PF registration and settlement processing for departing employees.
• 3
  ESIC Management (Employees' State Insurance) Monthly ESIC contribution computation for all employees earning up to ₹21,000/month — employer contribution at 3.25% and employee contribution at 0.75% of gross wages. Monthly challan payment and half-yearly return filing. ESIC registration support for new employees and IP (Insured Person) card facilitation.
• 4
  TDS on Salary — Form 16 and Form 24Q Monthly TDS computation for all employees based on projected annual income, applicable income tax slabs and declared investment proofs under Sections 80C, 80D, HRA exemption and other approved deductions. Quarterly Form 24Q (TDS return on salary) filing with TRACES. Annual Form 16 (Part A and Part B) generation and distribution to all employees by June 15 each year.
• 5
  Professional Tax (PT) State-wise Professional Tax deduction and remittance. PT rules and rates vary significantly by state — Karnataka, Maharashtra, West Bengal, Andhra Pradesh, Tamil Nadu and others each have distinct slabs and filing schedules. JAI HR maintains current PT rules for all applicable states and handles deduction, challan payment and return filing automatically.
• 6
  Labour Welfare Fund (LWF) LWF deductions and remittance for all applicable states. Like PT, LWF is state-specific — contributions vary by state and are typically collected monthly or half-yearly. JAI HR tracks applicability for each employee location and remits contributions on schedule.
• 7
  Payslip Generation and Distribution Professionally formatted, digital payslips generated for every employee each month. Payslips can be distributed via secure employee self-service portal, email, or bulk PDF delivery to your HR team for internal distribution. Payslip format can incorporate your company branding and logo.
• 8
  Full and Final Settlement Processing Accurate computation of all F&F dues for departing employees — including leave encashment (earned leave balance as per policy), gratuity calculation (for employees with 5+ years service under the Payment of Gratuity Act), notice period recovery or payment in lieu, bonus proration and TDS on F&F amounts. F&F computation sheet provided within your specified turnaround time.
• 9
  Compliance Reporting and Return Filing All statutory returns filed on time: monthly ECR for PF, monthly/half-yearly ESIC returns, quarterly Form 24Q, annual Form 16, Professional Tax returns and LWF returns. JAI HR maintains a compliance calendar for your account and provides advance notification of upcoming filing deadlines. Copies of all filed returns provided to your finance team for records.
• 10
  MIS and Payroll Reports Monthly payroll cost summary by department, cost centre, or location; headcount and attrition reports; CTC vs. actual cost variance analysis; bank disbursement statement; statutory liability summary (PF, ESIC, TDS, PT, LWF). Reports can be customised to your management reporting requirements and delivered in Excel, PDF, or direct system integration where applicable.

Why Indian Businesses Outsource Payroll

Statutory Compliance in India — What JAI HR Handles

Industries and Company Types JAI HR Serves

JAI HR provides payroll outsourcing across a wide range of industries including manufacturing, construction and infrastructure, healthcare and hospitals, FMCG and consumer goods, information technology and ITES, retail chains, education institutions, logistics and warehousing and professional services firms. The service is equally applicable to registered companies, LLPs, partnership firms and NGOs with salaried employees. JAI HR has particular depth of experience with organisations that face the most complex payroll environments: companies with workforces spread across multiple states (requiring simultaneous management of multiple state PT and LWF regimes), companies with high workforce turnover such as manufacturing plants and retail chains (where continuous onboarding, F&F processing and compliance for joining and departing employees creates significant operational load) and construction companies with large contractual and project-based workforces where cost-centre payroll allocation is essential for project accounting.

JAI HR's ISO 9001:2015 certification ensures that payroll processing follows documented, audited Standard Operating Procedures regardless of account size or complexity. This certification provides assurance to your finance and audit teams that payroll is being managed to a verified quality standard — important for organisations subject to internal audit, statutory audit, or investor due diligence. All payroll data is handled under strict confidentiality and Non-Disclosure Agreements. JAI HR's payroll team undergoes background verification and operates under documented information security protocols. If your organisation requires SOC-2 or similar data handling representations, JAI HR's compliance team can discuss specific requirements at the time of engagement.

How the Payroll Outsourcing Process Works

1. Initial consultation and scoping. JAI HR's payroll team meets with your HR and finance leads to understand your current payroll structure, headcount and workforce distribution, pay components and policy, existing statutory registrations (PF, ESIC, PT, LWF) and any specific compliance history or outstanding issues. This session produces a clear scope of work and a customised service proposal with transparent pricing per employee per month.
2. Data migration and employee master setup. JAI HR collects and validates your employee master data — all personal details, pay structure, PF/ESIC numbers, tax declarations and historical payroll records. The team maps your existing pay components to the payroll processing framework and sets up all statutory registrations and login credentials. Historical payroll data is migrated to provide year-to-date figures for TDS computation continuity.
3. Parallel run in month one. In the first payroll cycle after transition, JAI HR runs payroll in full parallel alongside your existing process. Both outputs are compared line-by-line. Any discrepancies are investigated and resolved before go-live. This parallel run ensures that the transition causes zero disruption to employee salary payments and provides complete confidence in processing accuracy before JAI HR assumes sole responsibility.
4. Go-live — JAI HR takes full ownership. From the second month, JAI HR is fully responsible for payroll processing. Your HR team provides the monthly input data (attendance, variable pay, new joiners, resignations) by an agreed cut-off date. JAI HR processes, validates and delivers the payroll output — payroll register, bank file, payslips and statutory challans — within your agreed turnaround time.
5. Monthly processing cycle. Attendance and variable inputs received from client HR by agreed cut-off → JAI HR processes payroll → Payroll register shared for client approval → On approval, bank disbursement file released, payslips distributed, statutory challans generated → PF, ESIC, PT, LWF and TDS challans paid by due dates → Filing confirmations and payment receipts provided to client.
6. Monthly MIS delivery. Within 3–5 working days of payroll finalisation, JAI HR delivers the standard MIS pack: payroll cost summary by department and location, headcount report, statutory liability summary, bank disbursement statement and any custom reports agreed at scoping. Annual deliverables include Form 16 set for all employees and annual payroll cost analysis for audit and financial planning purposes.

Frequently Asked Questions

• What does payroll outsourcing include?
  Payroll outsourcing covers monthly salary computation and processing, Provident Fund (PF) and ESIC contributions, Tax Deducted at Source (TDS) calculation and filing, Form 16 generation for employees, statutory compliance filing (PT, LWF), payslip generation and distribution, full and final settlement processing and payroll reports and MIS for management.

  Payroll outsourcing in India costs ₹150–500 per employee per month depending on company size, service scope and statutory compliance requirements.

• What is statutory compliance in payroll?
  Statutory compliance refers to mandatory legal obligations employers must fulfil under Indian labour and tax laws. This includes PF contributions (Employees' Provident Fund — 12% employer + 12% employee), ESIC registration and contributions for eligible employees, Professional Tax (PT) deduction and payment to state governments, Labour Welfare Fund (LWF) and TDS on salary as per the Income Tax Act. Non-compliance carries penalties and legal risk.
• How much does payroll outsourcing cost in India?
  Payroll outsourcing in India is typically priced per employee per month, ranging from ₹150 to ₹800 per employee depending on company size, number of employees, complexity of pay structures and services included. JAI HR provides customised pricing based on your specific requirements — contact business@jaihr.com for a quote.
• Is payroll data secure with an outsourced provider?
  Yes. JAI HR is ISO 9001:2015 certified, which mandates documented quality and data handling processes. Payroll data is treated with strict confidentiality under NDAs. Electronic payroll data is handled on secure systems with access controls. All staff handling payroll data undergo background verification.
• How long does it take to transition payroll to JAI HR?
  A typical payroll transition takes 2–4 weeks depending on company size and data readiness. JAI HR's team handles parallel payroll runs in the first month to validate accuracy before fully taking over. Data migration, software setup and compliance mapping are all managed by JAI HR's payroll specialists.