Statutory Compliance Services for Small Businesses (PF, ESIC, PT, Labour)
Statutory compliance services cover your company's full obligations under Indian labour law, from PF, ESIC, Professional Tax and TDS registration and filings to returns, records and inspection handling, all managed by HRTailor as one service. Learn the fundamentals in what statutory compliance in HR means, and how it differs in statutory vs regulatory vs contractual compliance.
What Are Statutory Compliance Services ?
Managed properly, statutory compliance in HR keeps every employee related obligation aligned with the law. HRTailor combines payroll and statutory compliance into one service, so your PF and ESIC compliance, professional tax and TDS are handled together. For small businesses and startups, it works as an outsourced compliance team.
In India, statutory compliance is a legal must, not a choice. It covers central laws like Provident Fund (PF), ESIC, gratuity, bonus, minimum wages, maternity benefit, contract labour (CLRA), POSH and the DPDP Act, plus state rules like Professional Tax and the Shops and Establishments Act.
Indian businesses spend around 252 hours a year on regulatory compliance (World Bank, 2023). For a growing SME, that work usually lands on the founder or a generalist HR person who cannot realistically track every rule.
Understanding India's Statutory Compliance Framework
The list of statutory compliance obligations below shows where legal and statutory compliance applies, across PF, ESI, professional tax, TDS, the Labour Welfare Fund and the Shops and Establishments Act.
Key compliance areas every Indian employer must manage, from central acts to state-specific legislation.
Employees' Provident Fund (EPF)
PF applies once you have 20 employees (10 in some industries). Employer and employee each contribute 12% of PF wages (basic plus DA), with the PF wage ceiling at ₹25,000 a month from 17 September 2026. The monthly ECR is filed on the EPFO portal by the 15th.
Employee State Insurance (ESIC)
ESIC covers employees whose wages are up to Rs.21,000 a month (Rs.25,000 for persons with disability) in units with 10 or more staff. Since 21 November 2025 this is checked on wages (basic plus DA, counted as at least half of gross pay), not on gross pay. Employer pays 3.25% and employee 0.75%, deposited by the 15th each month.
Professional Tax (PT)
Professional Tax is a state tax with its own slabs and due dates. It cannot exceed Rs.2,500 a year per employee in any state. Every state has its own portal and filing format.
Tax Deducted at Source (TDS)
Employers deduct TDS on salaries based on each employee's estimated annual income and tax slab. It is deposited by the 7th every month, with quarterly returns in Form 138 (Form 24Q until 31 March 2026).
Labour Welfare Fund (LWF)
The Labour Welfare Fund is a state fund with different rates. Maharashtra collects it twice a year (Rs.18 from the employer, Rs.6 from the employee). Late payment adds penalties and interest.
Shops and Establishments Act
Every establishment must register under its state's Shops and Establishments Act within 30 days of starting up. It sets working hours, weekly offs, overtime, leave and conditions of service.
Is PF and ESIC mandatory for my business?
Small business owners ask this more than anything else. The short answer depends on headcount, not on the type of company:
- PF: mandatory once you employ 20 or more people. Below 20, you can register voluntarily, which many startups do to attract staff.
- ESIC: mandatory at 10 or more employees, covering staff whose wages are ₹21,000 a month or less.
- Proprietorships and partnerships: the same thresholds apply. A proprietorship with 20 employees needs PF just like a private limited company.
- Professional Tax and Shops and Establishments: usually from your first employee, depending on the state.
Not sure where you stand? Our free compliance audit checks every registration and filing and gives you a written gap report.
Free PF, ESIC and calendar downloads
PF & ESIC Registration Kit
Thresholds, documents and step-by-step EPFO and ESIC registration for small businesses crossing 10 or 20 employees.
State HR Compliance Calendar 2026
Every PF, ESIC, PT, LWF and TDS due date for the year in your state. Pick your state below.
Consequences of Statutory Non-Compliance in India
Non-compliance is expensive. The EPFO collected over Rs.1,200 crore in penal damages in 2023, and the Labour Ministry (2024) says more than 40% of penalty cases come from late or incorrect filings, not serious violations. In short, most penalties are avoidable with proper compliance management.
PF Penalties
Interest at 12% p.a. on delayed deposits, damages of up to 100% of arrears, and fines or prosecution for serious or repeated defaults under the Code on Social Security.
ESIC Penalties
Interest at 12% p.a. on delayed contributions, plus damages and fines or prosecution for persistent defaults under the Code on Social Security.
TDS Penalties
Late filing fee of ₹200 per day, penalty ranging from ₹10,000 to ₹1,00,000, and interest at 1.5% per month for delayed deposit.
PT & Shops Act
In Maharashtra, penalty of 10% of tax due plus interest at 1.25% per month. Shops Act fines from ₹1,000 to ₹25,000 depending on state.
What HRTailor's Statutory Compliance Services Include
Beyond filings, our labour law compliance services keep your HR policies and procedures current with every applicable act, so your compliance policies and procedures hold up to any inspection or audit.
Statutory Registration & Setup
Fresh PF, ESIC, Professional Tax, Shops and LWF registrations when you start out or move into a new state. We prepare the documents, file online and follow up until every certificate is in hand.
Monthly Compliance Calendar
One calendar that tracks every filing deadline across all your statutes, with reminders 7, 3 and 1 day before each due date: PF and ESIC by the 15th, TDS by the 7th, PT as per your state.
Periodic & Annual Returns
Quarterly TDS returns (Form 138, formerly Form 24Q) with reconciliation against Form 26AS, half-yearly ESIC returns, annual PF returns, LWF contributions, Shops Act renewal, and annual TDS certificates in Form 130 (formerly Form 16).
Compliance Audit & Gap Assessment
For every new client we check registration status, past filings, contribution accuracy, records and any open notices or penalties, so you know exactly where you stand.
Inspection & Notice Handling
Full support if an inspection happens or a notice arrives, we prepare the documents, deal with inspectors and draft responses. Thanks to this proactive approach, most of our 200+ clients have never had a penalty notice.
New Labour Code Readiness
The four Labour Codes have been in force since 21 November 2025. They change how wages are defined, which affects PF, ESIC and gratuity, and state rules are still rolling out. We review your salary structure and registrations against them.
Check your compliance yourself first
HR Audit Checklist
Check your registrations, filings, registers and policies yourself before an inspection, then book a free audit for the gaps.
HR compliance services beyond PF and ESIC
Statutory filings are only part of HR compliance. Small businesses also carry registers, policies and committees under the Labour Codes:
- Appointment letters for every employee, now required under the OSH Code.
- POSH: an Internal Committee once you have 10 or more employees.
- Registers and returns in the formats the Codes prescribe, kept ready for inspections.
- Minimum wages checked against the current state rate at every revision.
- Contract workers: checking that your contractors pay their PF, ESIC and wages on time.
See our labour law compliance services for the full list.
Templates for appointment letters and POSH
Appointment Letter Template
An editable appointment letter for Indian employers. Written appointment letters are now required for every employee under the OSH Code.
POSH Setup Kit
Policy, Internal Committee set-up and annual report formats for workplaces with 10 or more employees.
How HRTailor Delivers Statutory Compliance: Our Process
Compliance Audit
Full audit of statutory registrations, historical filings, contribution accuracy, and pending notices or penalties.
Gap Remediation
Missed filings, under-contributions, or pending registrations fixed. Critical penalty-risk gaps addressed within the first week.
System Configuration
PF, ESIC contribution rates, PT slab mappings, TDS computation rules, and LWF schedules configured on HRTailor.AI.
Monthly Execution
Statutory contributions computed from payroll data, challans prepared, returns filed on government portals, confirmation reports generated.
Periodic Review
Quarterly reviews covering filing status, regulatory updates, and changes from business growth, new locations, headcount, or salary revisions.
Who Needs Statutory Compliance Services ?
Every company operating in India with even a single employee has statutory obligations. However, the need for professional compliance management is especially acute for:
- Startups reaching the 10 to 20 employee threshold: PF becomes mandatory at 20 employees (10 in some industries) and ESIC at 10 employees. Crossing these thresholds triggers registration obligations that many startups are unaware of.
- Companies expanding to new states: Each new state means new PT registrations, Shops and Establishments Act compliance, and potentially different LWF obligations.
- Businesses that have received compliance notices: If you have received a notice from the PF Commissioner, ESIC authority, or Income Tax Department, HRTailor can remediate existing issues while establishing systems to prevent recurrence.
- Companies preparing for due diligence: Investors and acquirers scrutinise statutory compliance during due diligence. Clean compliance records can materially impact valuation and deal completion timelines.
- Businesses with high employee turnover: Frequent employee exits create compliance complexity around PF transfers, ESIC continuation, and final settlement calculations.
Statutory Compliance Services Pricing
HRTailor's compliance management is included in our HR outsourcing plans:
Without Compliance
Base ₹10,000/mo (up to 15 emp) · then ₹400/emp
₹20,000₹10,000 / month + GST
≈ ₹30,000 billed in advance
- Dedicated Online HR Manager
- 5 to 6 HR Executives backing your account
- Cloud HRMS (included)
- HR Setup: policies, letters, salary structure
- Monthly Payroll & TDS through HRMS
- Onboarding, grievance, queries, attendance
With Compliance
Base ₹12,500/mo (up to 15 emp) · then ₹500/emp
₹25,000₹12,500 / month + GST
≈ ₹37,500 billed in advance
- Everything in ‘Without Compliance’
- PF / ESIC / PT challan processing
- Statutory filings & registers
- Compliance calendar & reminders
- Audit-ready documentation
Why outsource statutory compliance?
The right compliance partner gives you a dedicated team that monitors every deadline across PF, ESIC, PT, TDS and LWF, not a generic payroll software with a compliance module bolted on.
They file on time, every time, because that’s all they do. And they give you real visibility, a compliance calendar, filing confirmations, and audit-ready records, not a black box where you hope nothing was missed.
HRTailor’s compliance service is built around those three things: proactive monitoring, on-time filing, and complete transparency. Zero penalties for 200+ clients.
Ensure 100% Statutory Compliance
Don't let compliance gaps put your business at risk. HRTailor's expert team manages every statutory obligation so you can focus on growth.
Statutory compliance across India
We manage PF, ESIC, professional tax, TDS and labour law compliance for teams in every major Indian city, and remotely for companies hiring across multiple states.
Frequently asked questions.
Reviewed by the HRTailor compliance team. Last updated: 2026-09.