1. Provident Fund (PF / EPF)
Who it covers: Mandatory once you have 20+ employees. Voluntary registration is possible from employee 1.
- Wage base: Basic + DA (and food allowance where applicable). The statutory ceiling for mandatory coverage is ₹25,000/month from 17 September 2026 (it was ₹15,000 before) — above that, coverage is optional but most employers continue it.
- Contribution: 12% employee + 12% employer of PF wages. Of the employer's 12%, 8.33% goes to EPS (pension) up to the wage ceiling, the rest to EPF. The employer also pays 0.5% EDLI and a 0.5% admin charge (minimum ₹500 a month).
- Filing: Generate the monthly ECR (Electronic Challan-cum-Return) file and upload by the 15th of the following month. Late uploads attract interest at 12% p.a. plus damages of 5–25% depending on the delay.
- UAN: Every employee needs a Universal Account Number before their first ECR. New joiners without a UAN need one generated at onboarding — not at the first payroll run.
Common mistake: Computing PF wages on Basic alone when DA is part of the contract. The result is under-contribution that EPFO catches in an inspection — with retrospective interest. If DA is in the CTC, include it.
2. Employee State Insurance (ESI)
Who it covers: Mandatory if you have 10+ employees in a notified area (most metros and tier-2 cities). Employees earning gross ≤ ₹21,000/month are covered (₹25,000 for employees with disability).
- Contribution: 0.75% employee + 3.25% employer of gross wages.
- Filing: Monthly contribution by the 15th of the following month. Half-yearly contribution return for the periods April–September and October–March.
- ESIC number: Capture at onboarding; new joiners are auto-enrolled in the first month they're paid.
Common mistake: Checking the ₹21,000 cutoff only at the start of the financial year. Employees who cross the threshold mid-year stay enrolled until the end of the half-year cycle — but the reverse isn't true. Re-evaluate at every salary revision.
3. Professional Tax (PT)
Who it covers: Levied by individual state governments. 14+ states actively levy PT; Delhi, UP, Haryana, Punjab, Rajasthan, J&K, Goa, Chhattisgarh, Uttarakhand, HP and most UTs do not.
- Slabs: State-specific. Karnataka caps at ₹200/month for gross above ₹15,000; Maharashtra has a three-band slab with a ₹300 February bump; Tamil Nadu, Kerala and West Bengal assess half-yearly (statutory amount divided by 6 for monthly deduction is the safe approach).
- Filing: Cadence varies by state — monthly in most, half-yearly in TN/KL/WB. Returns and payments are state-portal-driven.
- Multi-location: PT follows the employee's work state, not the company's registered office. A Bangalore-headquartered company with employees working remotely from Tamil Nadu deducts TN's PT for those people.
Common mistake: Applying the HQ-state slab to every employee. In multi-location setups this is wrong roughly 30% of the time — and the under-deduction is the employer's liability, not the employee's.
4. Tax Deducted at Source (TDS) on salary
Who it covers: Mandatory on any employee whose projected annual tax liability is non-zero after deductions. Old regime vs new regime is the employee's choice and must be locked at the start of the financial year.
- Deposit: Deducted TDS must be deposited by the 7th of the following month (April's deduction by 30 April for the final month of the FY).
- Quarterly return: File Form 138 (called Form 24Q up to FY 2025-26) for each quarter — due 31 July, 31 October, 31 January, and 31 May for the four quarters respectively. The Q4 return is the largest, since it carries the annexure-II employee-wise summary.
- Form 130 (called Form 16 up to FY 2025-26): Issue to every employee whose TDS was deducted (or who had taxable income above the basic exemption) by 15 June after the financial year closes.
Common mistake: Front-loading or back-loading TDS to the last two months because monthly projections weren't recalculated when bonus or arrears were paid. Employees end up with refunds — and HR ends up answering questions for the next six months.
5. Gratuity
Who it covers: Payable once an employee completes 5 years of continuous service, on exit (resignation, retirement, death, or disablement).
- Formula: (Last drawn Basic + DA) × 15 / 26 × years of service.
- Cap: ₹20 lakh per employee under the current Payment of Gratuity Act.
- Provisioning: Most SMBs provision gratuity monthly even though it's only paid on exit — keeps the BS clean and avoids a year-end surprise when a long-tenured employee leaves.
Common mistake: Forgetting the 240-day rule for the final year — if the employee worked 240 days or more in the year they exited, it counts as a completed year for the formula.
6. Bonus Act (Payment of Bonus)
Who it covers: Employees earning basic + DA ≤ ₹21,000/month, with at least 30 days of service in the accounting year.
- Amount: Minimum 8.33% of wages, maximum 20%, based on the allocable surplus.
- Calculation wages: Capped at ₹7,000/month or the minimum wage of the scheduled employment, whichever is higher.
- Deadline: Pay within 8 months of the end of the accounting year (usually November for an April–March FY).
Common mistake: Paying a discretionary ex-gratia and assuming it covers the statutory bonus. It doesn't — the statutory minimum is a separate liability and must be paid even when profits are zero.
7. Filing calendar at a glance
| Liability | Cadence | Due |
|---|---|---|
| PF (ECR) | Monthly | 15th of next month |
| ESI contribution | Monthly | 15th of next month |
| ESI half-yearly return | 2× a year | 12 May (Oct–Mar), 11 Nov (Apr–Sep) |
| PT (most states) | Monthly | State portal cadence |
| TDS deposit | Monthly | 7th of next month (30 Apr for March) |
| Form 138 (earlier Form 24Q) | Quarterly | 31 Jul, 31 Oct, 31 Jan, 31 May |
| Form 130 (earlier Form 16) | Annual | 15 June after FY close |
| Bonus payout | Annual | Within 8 months of FY end |
How BizlumoAI handles all of this
BizlumoAI works out PF, ESI, Professional Tax and monthly TDS on every payslip, and makes the files from the same payroll run: the PF ECR file for the EPFO portal, the ESIC monthly contribution Excel, a Professional Tax summary from the slabs you set for your state, a quarterly TDS working sheet (Form 138, earlier Form 24Q) for you or your CA to prepare the return, and the salary certificate (Form 130, earlier Form 16) Part B as a PDF with a signature block. Gratuity, the Bonus Act and filing reminders are not part of the product today.
If that sounds useful: start a 14-day trial (no card needed), or book a 20-min walkthrough and we'll show you how a typical month of compliance looks end-to-end.
One last note
This checklist is a starting reference, not legal advice. Statutory thresholds, slab rates, and filing portals do change — the rules above are what we believe to be current as of October 2026 but verify against the latest gazette / state portal before any filing decision. If you spot something out of date, email support@bizlumoai.com and we'll fix it.