Payroll Outsourcing in India that runs itself, accurately, on time, every time.
Payroll outsourcing services for small businesses and startups in India. From salary processing to TDS filing, we manage your entire payroll cycle with zero errors and full statutory compliance.
What is payroll outsourcing?
Payroll outsourcing is when a business hands its entire monthly payroll to an external specialist. That covers salary calculation from attendance to net pay, statutory compliance across PF, ESIC, Professional Tax, TDS and LWF, payslip issuance and year end filings. Instead of hiring a payroll executive at ₹25,000 to ₹50,000 a month plus software, you pay one fixed monthly fee and a dedicated team runs it all on time. Some call this managed payroll: a payroll service provider runs the whole cycle while your employees stay on your books.
For a startup or SME with 5 to 100 employees in India, outsourcing payroll usually costs far less than running it in house, and it takes the penalty risk off the table. A single late PF return alone attracts 12% a year in interest, plus damages of up to 100% of the arrears.
How payroll works in India
Running payroll in India is not just paying salaries. It is a monthly compliance cycle set by central and state law. Here is the full run we handle for you, every single cycle.
- Collect inputs. Attendance, leave, new joiners, exits and variable pay come in by your cut off date.
- Compute gross to net. Earnings, deductions and reimbursements are worked out against each employee’s CTC.
- Apply statutory deductions. Provident Fund, ESIC, Professional Tax and TDS on salary, each under the right rule.
- Quality check. A three layer QC compares this run against the last one and flags anything odd before payout.
- Approve and pay. You approve a clean summary and salaries go out on your chosen date.
- File returns. PF, ESIC, PT, TDS and LWF are filed before their due dates, with challans generated.
- Report and record. Payslips go out, MIS is shared, and statutory registers stay audit ready.
Miss one step and the cost is real. A single late PF return attracts 12% a year in interest, plus damages of up to 100% of the arrears. Outsourcing payroll takes that risk off your desk.
End-to-end payroll, fully handled
Six core payroll functions, computed, filed and delivered every month without you lifting a finger.
Salary Computation
Gross-to-net calculations including HRA, LTA, reimbursements, and variable pay components. Every component verified against your CTC structure before processing.
PF & ESIC Filing
Monthly ECR generation, contribution filing, and new employee registration management. UAN activation, transfer claims and withdrawal processing handled end-to-end.
TDS & Form 130
TDS returns (Form 138 quarterly, formerly Form 24Q), monthly TDS working, and Form 130 (formerly Form 16) issuance for every employee. Investment declarations (Form 12BB) processed, tax-saving proof verification and revised computation on demand.
Professional Tax
State specific Professional Tax deductions, plus monthly or annual filing across every state where you operate. We track slab changes automatically, so nothing slips when a state government revises its rates.
Payslip Generation
Branded, itemised payslips delivered to employees on processing day via email or ESS portal. Components broken down clearly so employees understand their take-home.
Full & Final Settlement
Full and final settlement (F&F) calculation, gratuity, leave encashment, and clearance documentation handled end-to-end. Processed within 3 business days of confirmed last working day.
What lands in your inbox every month
Payroll outsourcing for a small business should leave you with proof, not just a salary credit. Every cycle you get:
- Payslips and salary register. Payslips by email or the employee portal, plus the salary register and bank transfer file for your approval.
- Statutory challans with payment proof. PF ECR and challan, ESIC, Professional Tax and Labour Welfare Fund, state by state.
- TDS and tax forms. Monthly TDS, quarterly Form 138 returns and annual Form 130 for every employee.
- Full and final statements. For every exit: notice pay, leave encashment, gratuity where due and final tax.
- MIS report. Headcount, payroll cost and month-on-month changes, ready for your accountant.
- Answers for your team. Payslip, tax declaration and PF or UAN questions handled by your payroll contact, not by you.
Outsource payroll, or run it in-house?
Running payroll in house means chasing attendance, computing PF, ESIC, PT and TDS, generating payslips and filing returns, every single month. HRTailor's payroll pod does all of it for you, accurately and on time.
| Criteria | In-house payroll | HRTailor |
|---|---|---|
| Monthly effort | 3 to 5 days of your team's time | ✓ Zero, we handle it all |
| Accuracy | Manual errors risk penalties | ✓ Three-layer QC process |
| Compliance | You track deadlines yourself | ✓ Auto-filed before due dates |
| Cost | ₹25,000 to ₹50,000 a month (executive plus software) | ✓ From ₹10,000/month |
| Scalability | Breaks at 50+ employees | ✓ Scales to any headcount |
| Error correction | Your liability | ✓ Corrected at no extra cost |
Payroll service or payroll software: which does a small business need?
Payroll software does the maths. A payroll service does the maths, the filings and the follow-up when rules change. The right choice depends on who you have in-house.
| Question | Payroll software | Payroll outsourcing (HRTailor) |
|---|---|---|
| Who enters and checks inputs? | You or your HR person | ✓ You approve, we validate |
| Who applies rule changes? | The software updates rates, you apply them | ✓ We apply them to your salary structure |
| Who files PF, ESIC, PT and TDS? | You | ✓ We do, with payment proof |
| Who answers employee questions? | You | ✓ Your payroll contact |
| Best for | Teams with an in-house payroll expert who has time every month | ✓ Founders and lean teams who want payroll off their plate |
Already on payroll or HRMS software? We can run payroll on your existing system, so your team keeps the tool it knows.
Simple to start, built to scale
Data handover
You share attendance, leave, and variable pay inputs by your cut-off date. We take it from there.
Processing & QC
Payroll is computed, cross-checked, and validated against the previous cycle by our payroll team.
Approval & transfer
You review a clear payroll summary and approve. Salaries are transferred on your chosen date.
Statutory filing
Every filing under PF, ESIC, TDS, Professional Tax, Labour Welfare Fund, gratuity, bonus, maternity benefit and Shops and Establishments rules, now under the four Labour Codes, generated and filed before its due date. UAN activation and ESIC IIP registration for new joiners are included.
Switching from another provider or spreadsheet?
Payroll Switch Checklist
A 21-day plan to move payroll to a new provider without missing a salary date or a filing: data, checks and a parallel run.
Payroll rules that changed this year
If your payroll still runs on last year's formulas, these are the changes to check:
- PF wage ceiling is now ₹25,000. From 17 September 2026 the PF wage ceiling rose from ₹15,000 to ₹25,000 a month, so more employees are covered and some deductions go up.
- ESIC is checked on wages, not gross pay. Since 21 November 2025, ESIC coverage (₹21,000 limit) is worked out on wages under the Code on Social Security, which can bring more staff into ESIC.
- The 50% wage rule. Under the Labour Codes, if allowances outside basic pay and DA are more than half of total pay, the excess is added back to wages for PF, ESIC and gratuity.
- Minimum wages change during the year. States revise minimum wages and dearness allowance, so every payroll run should be checked against the current state rate.
- New TDS forms. From FY 2026-27, quarterly TDS returns are filed in Form 138 and annual certificates are issued in Form 130.
We apply each change to your payroll for you. For more on the PF change, read our PF wage ceiling guide.
Newly covered by PF? Register the right way
PF & ESIC Registration Kit
Thresholds, documents and step-by-step EPFO and ESIC registration for small businesses crossing 10 or 20 employees.
Who needs payroll outsourcing?
If you’re spending days every month on payroll instead of building your business, it’s time to hand it off.
- ✓ Small businesses, startups and SMEs with 5 to 100 employees who need accurate, on-time payroll without a dedicated payroll team.
- ✓ Companies operating across multiple Indian states, each state has different PT slabs, LWF rules and filing portals that need to be tracked.
- ✓ Businesses that have faced penalties for late PF/ESIC/TDS filings and need a zero-miss system going forward.
- ✓ Founders and ops leads who are currently doing payroll themselves and need to free up 3 to 5 days per month.
- ✓ Companies with contract, gig and full-time workers on the same payroll platform needing unified processing.
- ✓ Businesses preparing for audit or due diligence, clean payroll records and statutory compliance documentation matter.
The benefits of outsourcing your payroll
- Zero missed deadlines. Every PF, ESIC, PT and TDS filing goes in before its due date.
- No penalty exposure. Late filing interest and damages become our problem, not yours.
- Days back every month. Your team stops running payroll and gets back to the business.
- One flat starting price. From ₹10,000 a month, with no surprise per filing charges.
- Audit ready records. Clean payslips, challans and registers, ready for due diligence.
- Scales with you. From 5 employees to 500, across any number of Indian states.
What is third party payroll?
Third party payroll means workers are paid and managed on a partner’s payroll rather than yours, which suits contract and project staff. HRTailor runs payroll for your own team. For third party payroll and contract staffing, we refer you to our sister company Team Management Services (TMS), who can set it up in 48 hours.
Transparent payroll pricing
No hidden fees. Pricing scales with your team size.
Payroll with compliance
- Monthly salary computation
- PF & ESIC filing
- TDS computation & Form 16
- Professional Tax filing
- Branded payslips
- Full & final settlements
- Statutory registers & compliance monitoring
- Attendance & leave integration
- Dedicated payroll contact
Custom Quote
- Everything in Payroll with compliance
- Multi-state PT management across PAN India (28 states + Union Territories)
- Contract & gig worker payroll
- Custom reporting & MIS
- HRMS integration
- Bulk hiring payroll setup
For companies with more than 100 employees or complex multi-entity structures, contact us for customised pricing.
What does payroll outsourcing cost in India?
Here is what HRTailor charges per month (GST extra). The base fee covers up to 15 employees.
| Team size | Without Compliance | With Compliance (PF, ESIC, PT filing) |
|---|---|---|
| Up to 15 | ₹10,000 | ₹12,500 |
| 25 | ₹14,000 | ₹17,500 |
| 50 | ₹24,000 | ₹30,000 |
| 100 | ₹44,000 | ₹55,000 |
One-time setup fee of ₹30,000 to ₹50,000, based on team size. 6-month minimum, 3 months billed in advance. For comparison, an in-house payroll executive costs ₹25,000 to ₹50,000 a month before software, and a single late PF return attracts interest at 12% a year plus damages of up to 100% of the arrears.
HRTailor’s payroll outsourcing eliminates this risk entirely. See our payroll cost guide, or explore full HR outsourcing.
How to choose a payroll outsourcing company in India
Comparing payroll outsourcing companies in India? Here is what actually matters once you look past the top ten lists.
- Compliance coverage. Do they handle PF, ESIC, PT, TDS, LWF and gratuity across every state you run in?
- An accuracy guarantee. Is there a real QC process, and who pays if a filing is wrong? We fix it free, revised filings included.
- Clear pricing. A flat, predictable fee beats add ons that quietly grow your bill.
- A named contact. Will you get one person who replies, or a ticket queue?
- Data security. Encrypted, access controlled, and aligned to the DPDP Act 2023.
- The right fit. Enterprise providers over serve a 20 person startup. HRTailor is built for SMEs and moves you to Team Management Services once you cross 100 employees.
Never miss a payroll deadline again
We take complete ownership off your plate, from inputs to statutory filing. One team, one process, zero missed deadlines.
Payroll live in 5 business days. Plans from ₹10,000/month. PF, ESIC and PT filing from ₹12,500/month.
Payroll outsourcing across India
We run payroll, compliance and HR support in every major Indian metro, and multi state teams are exactly what we are built for. Find your city below.
Frequently asked questions
Reviewed by the HRTailor payroll and compliance team. Last updated: 2026-09.