Payroll is the procedure related to the payment of the company’s employees. Investors starting a company in India will need to integrate payroll services within their company as prescribed by the local legislation, or they may outsource such services to a business that is specialized in offering a wide range of payroll activities.
As a general rule, most of the companies (especially large companies) outsource the payroll to specialized businesses, as they can offer full services, which may also include the usage of modern means of communication (such as smartphones or tablets) for the management of payroll procedures. Our team of specialists in company formation in India can provide in-depth assistance on the main payroll activities applicable to a local business. If you are interested in payroll in India, our local specialists are at your disposal with complete information.
Payroll is a complex procedure that takes into consideration numerous aspects concerning the taxation of an employee hired in an Indian company, but it also refers to allowances, medical leave, meal coupons and other aspects associated with the rights granted to a local employee.
The taxation of an employee is also completed depending on his or her age and our team of consultants in company formation in India can advise on the taxation system applicable in this case.
Quick Facts | |
---|---|
Employee/employer registration services (Yes/No) | Yes, we are at the service of companies with employee/employer registration services |
Payroll setup services (Yes/No) | Yes, our accountants in India can set up the payroll for companies |
Employee records setup and maintenance services (Yes/No) | Yes, we can set up, keep and update employees’ records |
Payslip generation services (YES/NO) | Yes, this is one of our most important payroll services in India |
Employee remuneration computation | Yes, we can calculate employee salaries |
Mandatory contributions for employees | Employees must contribute to the Provident Fund Scheme which also contains the pension fund |
Employment contributions for employers | Employers are required to pay the same contributions as workers |
Payroll reporting requirements | Monthly payments and reports must be generated in India |
Social security contribution for employees | 12% to the Provident Fund |
Social security contribution for employers | 12% to the Provident Fund , 8.33% of the 12% must be directed to the pension fund |
Employment statutory filing requirements support (YES/NO) | Yes, we can draft and file payroll reports |
Special requirements applicable to foreign employees (YES/NO) | Foreign employees must live and work in India for 182 days in a calendar year to be deemed tax residents here and pay income and payroll taxes on their worldwide income |
Special requirements for Indian citizens working abroad (YES/NO) | Indian citizens working abroad can benefit from double tax treaties signed by India |
Assistance in drafting labor contracts (YES/NO) | Yes, we also offer support in creating labor agreements |
Other services (if available) | Accounting, bookkeeping, and audit services in India. |
One of the activities that are performed by in this situation refers to the allowances granted to the employee. It is important to know that India offers numerous allowances that are exempted from taxation, such as:
Payroll in India is an important part of the accounting department of a company, and you can rely on us for support in such matters. We can also provide assistance in other employment matters, among which human resources.
When it comes to HR and payroll services in India, here are the most requested:
Payroll in India is an important task that can be completed by the accounting department in a company or by using externalized HR services. You can rely on our accountants for various tax-related solutions.
There are several taxes that need to be considered as part of the payroll in India. These are:
In order to be able to set up the payroll, a company must be registered with various authorities. Especially for new companies, the following steps need to be completed:
Considering India’s population of more than 1.2 billion inhabitants and an employment rate of 43.1% employment rate at the level of March 2021, payroll is requested by many companies here.
If you are interested in solutions related to payroll in India, feel free to address our local consultants. We can also provide tailored support in employment matters, including when hiring foreign citizens.
We are also at the service of investors who are interested in company formation in India.
Payroll must be set up with the first employee in a business. The process is in most cases handled by the company’s accounting department, however, using externalized services has increased considerably in the past few years. For this purpose, many accounting firms offer personalized payroll in India. For example, simplified services dedicated to small enterprises or more complex operations that can be completed on behalf of large employers with thousands of workers.
The following are some of the documents that must be processed as part of the payroll:
Payroll and human resources departments can be outsourced to our accountants in India, who will ensure that all services are delivered on time, allowing you and your employees to focus on your work.
Indian employees can work under various types of labor agreements, the most common of which are part-time and full-time employment contracts, according to the Employment Law. Based on the salaries they earn, they need to pay the income tax. It is worth noting that there is no minimum wage established by the government in India.
The payroll for an Indian company implies filing various forms, among which the most important ones are:
Please mind that these are only a few of the forms that must be submitted when handling Indian payroll. Should you need support in such endeavors, you are welcome to rely on our specialized accountants.
There are several ways through which payroll can be handled in India, and the most common are:
We are also at your service with outsourced payroll solutions for any type of enterprise in India.
Payroll is an important part in the employment process in India, which is why it is often connected to the Labor Code. A company must respect various rules when hiring, having, and terminating work relations with their employees.
Here are the main categories of employees one can find in India:
According to the law, a workman is an employee who is hired to perform any manual, skilled or unskilled, technical, operational, clerical, or general supervision work for hire or reward.
Self-employed or independent contractors in India are people who usually work for employers on a “consultancy” basis. An independent contractor’s employment will be governed by the individual contract because they are not protected by Indian labor regulations. As a general rule, an employer shouldn’t abuse an independent contractor agreement to deny the person the rights or benefits that would be accessible to a permanent employee. From a payroll point of view, self-employed persons must pay their own contributions.
In order to benefit from payroll services in India, the company has to register any new employee, by providing a set of information regarding payroll aspects, as follows:
For the purposes of income and payroll taxation in India, a foreign national is considered to be a resident of India if they spend at least 182 days there during the applicable tax year.
According to the Income Tax Act, if a person is resident or ordinarily resident (meaning a resident in the current fiscal year, a resident in two of the prior ten years, and present in India for at least 730 days during the previous seven years), they are required to pay tax on all of their worldwide income. In all other circumstances, the person is obligated to pay the applicable rate of income tax on their income from India for the pertinent assessment year.
Here are the main aspects to consider about taxation of employment in India:
Businessmen who want to register a company in India are required under the local legislation to provide all the above-mentioned aspects. They also need to submit specific forms with the local authorities and our team of representatives in company registration in India can advise businessmen on other compulsory steps regarding payroll activities.