Why Payroll Compliance Matters More Than Ever in 2026
Payroll compliance in India has become significantly more complex over the last three years. Between the new labour codes, EPFO system upgrades, TDS rule changes under the new tax regime, and increased scrutiny from labour inspectors — an HR professional who does not have a solid, updated compliance checklist is exposed to serious risk for their employer.
This guide is the most practical, current payroll compliance checklist available for Indian HR professionals in 2026. Use it monthly, quarterly, and annually.
Monthly Payroll Compliance Checklist — 2026
Provident Fund (PF / EPF)
- ECR filing deadline: 15th of every month — file Electronic Challan cum Return on the EPFO unified portal
- Employee contribution: 12% of basic + DA (no ceiling for employee)
- Employer contribution: 12% of basic + DA — split as 3.67% to EPF and 8.33% to EPS (capped at ₹15,000 basic for EPS)
- Admin charges: 0.50% of total EPF wages (minimum ₹500/month)
- EDLI charges: 0.50% of EPF wages (minimum ₹200/month)
- Verify UAN activation for all new joiners before first contribution
ESI (Employee State Insurance)
- ESI challan deadline: 15th of every month
- Applicable to employees with gross salary up to ₹21,000/month
- Employee contribution: 0.75% of gross wages
- Employer contribution: 3.25% of gross wages
- File monthly return on ESIC portal — verify IP number for all covered employees
- New joiner: register on ESIC portal within 10 days of joining
TDS on Salary (Section 192)
- Deduct TDS monthly based on estimated annual income and applicable slab
- Collect investment declarations (Form 12BB) at year start — update mid-year if needed
- TDS deposit deadline: 7th of the following month (30th April for March)
- New tax regime is default from FY 2024-25 — confirm employee's regime choice in writing
Professional Tax
- Applicable in: Maharashtra, Karnataka, West Bengal, AP, Telangana, Tamil Nadu, Gujarat, MP
- Maharashtra: slab-based up to ₹2,500/year — deduct monthly and pay by 31st of following month
- Karnataka: up to ₹2,400/year — pay quarterly
- Maintain PT registration certificate and keep updated for employee count changes
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Quarterly Payroll Compliance Checklist — 2026
- TDS return (Form 24Q) — file quarterly: July 31, October 31, January 31, May 31
- Reconcile PF ECR data with payroll register — flag discrepancies immediately
- ESI half-yearly return: April–September return due November 11; October–March return due May 11
- Review and update investment declarations mid-year (October–November)
- Check for salary revisions and update PF/ESI contributions accordingly
- Verify Form 16 Part A data matches 26AS for each employee
Annual Payroll Compliance Checklist — 2026
| Task | Deadline | Form / Portal |
|---|---|---|
| Issue Form 16 to employees | June 15 | TRACES portal |
| File Annual PF Return | April 30 | EPFO unified portal |
| Annual ESI Return | November 11 / May 11 | ESIC portal |
| Professional Tax Annual Return (Maharashtra) | March 31 | PT portal / Mah Govt |
| Collect Form 12BB from all employees | April (for new FY) | Internal HR process |
| Bonus payment (Factories Act) | Within 8 months of financial year end | Internal payroll |
| LWF (Labour Welfare Fund) — Maharashtra | December 31 | State LWF portal |
New Joiner Payroll Compliance Checklist
- Collect PAN, Aadhaar, bank account details on Day 1
- UAN generation or linking within 7 days of joining
- ESIC IP number registration within 10 days (if applicable)
- Collect Form 12BB and investment declaration
- Confirm old employer Form 16 / 12BA for TDS reconciliation
- Get signed offer letter, appointment letter, and NDA before first payroll
Exit / Full & Final Settlement Checklist
- Calculate notice period salary or recovery accurately
- Process earned leave encashment as per policy
- Gratuity calculation: (Last drawn basic + DA × 15 × years) ÷ 26 — applicable after 5 years
- PF withdrawal or transfer: submit Form 19 (withdrawal) or Form 13 (transfer)
- Issue Form 16 for partial year within 60 days of exit
- Recover company assets — laptop, ID card, access cards
- Issue experience letter and relieving letter on last working day
Filing ECR after the 15th, not updating PF wages after salary revision, deducting TDS under wrong tax regime, missing PT slab updates, and not maintaining statutory registers under the Factories Act and Shops Act are the five most common compliance failures we see in Pune's manufacturing and IT sectors.