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Payroll is the compensation a company utilizes to compensate its employees monthly for work completed within a specified period. The organization’s accounting or human resources department often oversees it.

Payroll processing includes rewarding employees for their efforts. Calculating the total wage earnings, deducting the appropriate amount, filing payroll taxes, and planning and budgeting are all part of it. A payroll cycle is the period between two salary payments. Wage payments might be made weekly or monthly, depending on the company. In general, it goes through processing once a month in India.



Regardless of the many payroll management process types, it often entails the three phases listed below.

Pre-payroll tasks

They include establishing wage structures and payroll cycles, making adjustments for employees who join or leave the organization, raising salaries, collecting data for the entire month, validating the data, and using the same to carry out the real payroll operation.


In this stage, the employers determine the employees’ net pay by deducting taxes at the source from the total gross pay that each employee typically earned during the most recent pay period. For the same time frame, the employers also accrue tax liabilities.

Post-payroll tasks:

In order to ensure that employee payroll is calculated correctly, post-payroll procedures include reviewing the transactions and comparing the current payroll with the prior one. There should be no gaps, and the taxes must be deposited on time.

How is Payroll Calculated in India?

Every organization’s operations include payroll calculation. It entails figuring out the total sum of money a business pays its workers for their labour over a particular period, including salaries, wages, bonuses, and other benefits. Yet, because of India’s various tax and regulatory obligations, payroll computation can take a lot of work and effort.



Factors affecting Payroll:

Income Tax: Based on their salaries and benefits, Indian employees are subject to income tax. Employers are required to withhold and deposit tax at source (TDS) from their employees’ monthly wages. For better understanding on Income Tax Filing, visit https://48s.a19.mywebsitetransfer.com/trademark-registration/

Provident Fund: Businesses must contribute to the employee’s provident fund (EPF), a retirement savings plan. The employer matches the contribution, which is typically 12% of the employee’s base pay. For better understanding on Provident Fund Registration, visit https://48s.a19.mywebsitetransfer.com/trademark-registration/

Employee State Insurance (ESI): A social security programme that offers workers monetary and medical benefits. Employers are required to register and pay 3.75% of employee salaries under the ESI Act if they have more than ten employees, while employees are required to pay 0.75% of their salaries under the same law. For better understanding on ESI Registration, visit https://48s.a19.mywebsitetransfer.com/trademark-registration/

Professional Tax: Certain Indian states charge their workers a professional tax, which is subtracted from their pay. Each state has a different tax rate. For better understanding on Professional Tax Registration, visit https://48s.a19.mywebsitetransfer.com/professional-tax-registration/

The other steps including the payroll process are as follows:

Leave: Workers are entitled to annual leave, which they may cash in at the end of the year if they have yet to use it entirely. The number of leave days and the employee’s income determine the amount of leave encashment.

Calculate the Gross Pay: The Gross Salary is made up of the employee’s Basic Salary, any Per Diems, and any Bonuses or Commissions.

Deduct the Provident Fund Contribution: The employer’s contribution to the EPF is taken out of the employee’s gross income.

Determine the Taxable Income: The employee’s gross compensation is subtracted from the EPF contribution and other deductions, such as professional tax, to determine the taxable income.

Income tax Deduction:

In accordance with the employee’s income tax bracket, the employer withholds TDS from their salary.



The following list of tasks is completed using our precise payroll management system to create the regulations required to successfully manage the payroll process:

Taxes: In accordance with the Indian tax regulatory system, taxes must be withheld at the source from salary payments. The employer shall pay this sum on behalf of the employee to the Government of India.

Self-imposed deductions: Taxkey assists you in drafting the Memorandum of Association (MOA) and Articles of Association (AOA) of the Company, which are important legal documents defining the Company’s objectives, powers, and scope of activities.

Mandatory deductions: Employees typically receive information from the government regarding some statutory deductions, such as tax levies, child support, the Swach Bharat Cess, and other wage garnishments. The employer receives the employee’s net wages, also known as take-home pay; after all, deductions have been made from the gross wages.

GST Compliance: Taxkey also assists you with compliance under the Goods and Services Tax (GST), such as registration, filing of returns, and payment of GST.

  • Assistance from the time of hiring till termination, throughout the whole life cycle of the employee.
  • Decreased expenditures on IT infrastructure.
  • Thoughtful resource allocation.
  • Strict observance of legal standards and conformity.
  • Documents and reports that are free of errors.
  • Dependable business intelligence that supports top management’s strategic goals.
  • Resolution of all employee issues in a timely and effective manner.



Our productivity gives your employees more time to focus on vital, value-added, and income-generating tasks. Removing the burden of payroll execution can free your organization to concentrate on more productive work within their areas of expertise.

Accounts Reporting

We will provide reports such as earnings statements, payroll by departments, cost summaries, timesheets, expenses, and other stuffs. Mandatory reports are offered as standard, and additional custom reports can be created to satisfy your particular needs.


You can contact our team virtually and provide the employee’s hours, deductions, and salary information, and we handle all your burdens in a healthier process.

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