Zoho Payroll: PF, ESI, and Statutory Compliance for Indian Companies

Zoho Payroll for Indian businesses in India means Zoho Payroll India setup guide contributions, ESI deductions, Professional Tax, TDS on salary, and compliance with multiple statutory bodies. Zoho Payroll handles all of these within a single payroll run, reducing calculation errors and missed filings.

Statutory Components

Setting Up PF

Enter your PF establishment code in Settings > Statutory Components > PF. Choose whether PF is on Rs. 15,000 ceiling or actual basic. Zoho Payroll computes both employee and employer shares on every payroll run.

ESI Configuration

ESI applies to employees with gross up to Rs. 21,000/month. Enter your ESIC code. Zoho Payroll auto-discontinues ESI when salary crosses the tZoho People HR and attendance managementeshold.

Professional Tax

Pre-configured slabs for all states that levy PT (Maharashtra, Karnataka, Tamil Nadu, etc.). Set your state and Zoho Payroll applies the correct slab per employee.

TDS on Salary

Employees submit investment declarations at the start of the financial year. Zoho Payroll distributes projected tax across months. Update with actual proofs in January-February and the system recalculates remaining TDS.

Filing and Remittance

After each payroll run, Zoho Payroll generates challan reports for PF (due 15th), ESI (due 15th), and TDS (due 7th). It also generates ECR files for direct upload to the EPFO Unified Portal.

Setting Up PF, ESI, and Professional Tax in Zoho Payroll

Statutory deductions are mandatory for most Indian employers, and configuring them correctly in Zoho Payroll prevents short-deductions, penalties, and employee disputes at year-end. Here is how to set up each component.

Provident Fund (PF): The standard PF deduction rate is 12% of basic salary from the employee, matched by 12% from the employer (though the employer’s contribution is split across EPF, EPS, and EDLI). In Zoho Payroll, go to Settings > Statutory Compliance > Provident Fund and enter your EPFO establishment code. Zoho Payroll calculates deductions automatically and generates the ECR (Electronic Challan cum Return) file for monthly filing. For employees whose basic salary exceeds Rs 15,000 per month, PF contribution is calculated on the wage ceiling of Rs 15,000 unless you opt to contribute on actual salary.

ESI (Employees’ State Insurance): ESI applies to employees earning up to Rs 21,000 per month (gross). The employee contributes 0.75% of gross wages and the employer contributes 3.25%. In Zoho Payroll, ESI is enabled per employee based on their gross salary. The system automatically stops ESI deductions if an employee’s salary crosses the threshold during the year, following ESIC rules. Your ESIC code is entered once in statutory settings and applies across all eligible employees.

Professional Tax: Professional tax rates and applicability vary by state. Maharashtra, Karnataka, Tamil Nadu, West Bengal, and Telangana are among the states that levy PT. In Zoho Payroll, go to Settings > Professional Tax, select your state, and the system applies the slab-rate deductions automatically. For employees in states without PT, no deduction is made.

Payslip Generation and TDS on Salary

Zoho Payroll generates payslips automatically once payroll is processed for the month. Payslips show gross salary, all deductions (PF, ESI, PT, TDS), and net take-home pay. Employees can access their payslips through the Zoho Payroll self-service portal or the Zoho People mobile app if your organisation also uses Zoho People for HR.

TDS on salary (Section 192) is calculated by Zoho Payroll based on the employee’s investment declarations. At the start of each financial year (April), employees submit their investment proofs (HRA, LTA, 80C, 80D, etc.) through the employee portal. Zoho Payroll projects their annual income, applies the applicable tax slab, and distributes the TDS liability evenly across the remaining months of the year.

At year-end, employees submit actual investment proofs. Zoho Payroll recalculates TDS based on actual investments and adjusts the final 2 to 3 months’ deductions accordingly. Form 16 is generated by Zoho Payroll at year-end for each employee, which they need for their individual ITR filing.

Monthly Compliance Checklist in Zoho Payroll

Once payroll is configured, the monthly compliance routine in Zoho Payroll involves four steps: run payroll (confirm attendance and variable pay), review and approve payroll, generate and pay statutory challans (PF, ESI, PT, TDS), and file returns (ECR for PF, ESI return, TDS quarterly return). Zoho Payroll generates the challan amounts and the ECR file. Payment and filing still happen on the respective government portals (EPFO unified portal, ESIC portal, TRACES), but the data comes from Zoho Payroll.

Frequently Asked Questions