Monthly HR Compliance Checklist for Indian Businesses: Never Miss a PF, ESI, or TDS Deadline Again
If you run a business in India, you already know that managing employee salaries is only half the job. The other half is making sure every government filing, every statutory payment, and every compliance return reaches the right department on the right date.
Miss the PF deposit by one day? That is 12% annual interest plus damages. File your TDS return a week late? You pay ₹200 for every single day of delay. Forget to submit your ESI contribution? The ESIC charges 12% interest and can deny your employees their medical benefits.
The problem is not that business owners want to skip compliance. The problem is that there are too many deadlines spread across too many departments, and most small business owners do not have a dedicated compliance team to track them all.
This guide gives you one complete, month by month HR compliance checklist that you can follow every single month. Pin it on your wall, save it on your phone, or set calendar reminders. Whatever it takes to never miss a deadline again.
The Master Monthly Compliance Calendar
Every month, an Indian business with employees must complete these tasks by specific dates. Here is the complete calendar:
| Date | Compliance Task | Applicable Law | Where to File/Pay |
|---|---|---|---|
| 7th | Deposit TDS deducted from salaries (previous month) | Income Tax Act, 1961 | NSDL/TIN portal via Challan 281 |
| 7th | Deposit TDS on non salary payments like rent, contractor fees | Income Tax Act, 1961 | NSDL/TIN portal via Challan 281 |
| 10th | File GSTR 7 (TDS under GST, if applicable) | GST Act | GST portal |
| 11th | File GSTR 1 (outward supply details, if applicable) | GST Act | GST portal |
| 15th | Deposit PF contribution (employee + employer share) | EPF Act, 1952 | EPFO Unified Portal via ECR |
| 15th | Deposit ESI contribution (employee + employer share) | ESI Act, 1948 | ESIC portal |
| 15th | Deposit PF admin charges and EDLI premium | EPF Act, 1952 | EPFO Unified Portal |
| Last day of month | Deposit Professional Tax (in most states) | State PT Acts | State PT portal |
| Varies by state | File monthly PT return (Maharashtra, Karnataka, etc.) | State PT Acts | State PT portal |
Important note: When any of these dates falls on a Sunday or a gazetted holiday, the due date extends to the next working day. However, it is best practice to complete filings 2 to 3 days before the deadline to avoid last minute portal crashes.
Week by Week Breakdown: What to Do and When
Instead of scrambling on the 15th, spread your compliance work across the month. Here is a practical weekly schedule:
Week 1 (1st to 7th of the Month)
| Day | Task | Details |
|---|---|---|
| 1st | Lock previous month’s attendance | Finalize attendance, leave, overtime, and half day records |
| 1st to 3rd | Run payroll calculations | Calculate gross salary, deductions (PF, ESI, PT, TDS), and net salary for each employee |
| 3rd to 5th | Verify salary calculations | Cross check attendance against salary, verify PF and ESI amounts, confirm TDS deductions |
| 5th to 6th | Process salary disbursement | Transfer net salary to employee bank accounts |
| 7th | Deposit TDS with government | Pay Challan 281 online. This is the hard deadline for TDS on salary and non salary payments |
| 7th | Generate and distribute payslips | Share salary slips with all employees via WhatsApp, email, or the employee portal |
Week 2 (8th to 15th of the Month)
| Day | Task | Details |
|---|---|---|
| 8th to 10th | Prepare PF ECR file | Generate Electronic Challan cum Return with correct wages and contribution details |
| 8th to 10th | Prepare ESI contribution challan | Calculate ESI at 0.75% (employee) + 3.25% (employer) for eligible employees |
| 10th to 12th | Verify PF and ESI data | Match contribution amounts with payroll output. Check UAN and IP numbers. |
| 13th to 14th | Upload ECR and process PF payment | Upload ECR file on EPFO Unified Portal and generate challan |
| 15th | Complete PF payment | This is the hard deadline. PF must be deposited by the 15th. |
| 15th | Complete ESI payment | Deposit ESI contribution on ESIC portal by the 15th. |
Week 3 (16th to 25th of the Month)
| Day | Task | Details |
|---|---|---|
| 16th to 20th | Verify PF and ESI receipts | Download payment receipts. Match with payroll records. File and archive. |
| 16th to 20th | Handle employee queries | Address any salary discrepancies, PF/ESI questions, or payslip clarifications |
| 20th to 25th | Review workforce changes | Process new joiners (PF registration, ESI IP generation), update records for exits |
| 25th | Prepare Professional Tax payment | Calculate state wise PT liability based on employee salaries |
Week 4 (26th to End of Month)
| Day | Task | Details |
|---|---|---|
| 26th to 28th | Deposit Professional Tax | Pay PT to the state government before the month end deadline |
| 28th to 30th | Collect next month’s data | Gather overtime reports, reimbursement claims, salary revisions, bonus approvals |
| Last day | Close the month | Archive all compliance receipts. Update the compliance tracker. Prepare for next month. |
| Last day | Send compliance summary to management | Report on what was filed, what was paid, and any pending items |
Deep Dive: PF Compliance (Every Month)
The Employees’ Provident Fund is typically the largest statutory compliance obligation for most businesses. Here is everything you need to do every month:
Who must comply: Every establishment with 20 or more employees (mandatory). Smaller establishments can register voluntarily.
Monthly PF tasks:
| Task | What to Do | Deadline |
|---|---|---|
| Calculate contributions | Employee: 12% of basic + DA. Employer: 12% of basic + DA (3.67% EPF + 8.33% EPS). | Before 15th |
| Calculate admin charges | 0.50% of basic + DA (minimum ₹75 per month if no employees) | Before 15th |
| Calculate EDLI charges | 0.50% of basic + DA | Before 15th |
| Generate ECR | Create Electronic Challan cum Return on EPFO Unified Portal | Before 15th |
| Upload and verify ECR | Upload ECR file, verify employee details, UAN mapping | Before 15th |
| Make payment | Pay total PF amount (contributions + admin + EDLI) via net banking | 15th (hard deadline) |
| Download receipt | Save challan receipt for records | After payment |
| Verify member passbooks | Check that contributions reflect in employees’ PF passbooks | Within 3 to 5 days of payment |
PF contribution breakup for one employee (₹15,000 basic salary):
| Component | Rate | Amount (₹) | Paid By |
|---|---|---|---|
| EPF (Employee share) | 12% of basic | 1,800 | Deducted from employee salary |
| EPF (Employer share to EPF) | 3.67% of basic | 550 | Employer |
| EPS (Employer share to pension) | 8.33% of basic | 1,250 | Employer |
| Admin charges | 0.50% of basic | 75 | Employer |
| EDLI (insurance) | 0.50% of basic | 75 | Employer |
| Total employer cost | 1,950 | ||
| Total employee deduction | 1,800 | ||
| Total monthly PF deposit | 3,750 |
PF wage ceiling: The statutory PF contribution is calculated on basic + DA up to ₹15,000 per month. Employees earning more than ₹15,000 basic can contribute on actual basic (if both employer and employee agree), but the employer is legally required to contribute only on ₹15,000.
For complete details on PF rules, read our guide on PF and ESI compliance.
Deep Dive: ESI Compliance (Every Month)
The Employee State Insurance scheme provides medical, sickness, maternity, and disability benefits to employees. Here is your monthly ESI checklist:
Who must comply: Establishments with 10 or more employees (20 in some states). Applies only to employees with gross salary up to ₹21,000 per month.
Monthly ESI tasks:
| Task | What to Do | Deadline |
|---|---|---|
| Identify eligible employees | Check which employees have gross salary ≤ ₹21,000 | Before 15th |
| Calculate contributions | Employee: 0.75% of gross. Employer: 3.25% of gross. | Before 15th |
| Generate challan | Prepare ESI contribution challan on ESIC portal | Before 15th |
| Make payment | Deposit total ESI (employee + employer share) online | 15th (hard deadline) |
| Register new employees | Generate IP (Insurance Person) number for new joiners within 10 days | Within 10 days of joining |
| Update salary changes | Report salary revisions that take employees above/below ₹21,000 threshold | During next contribution period |
ESI contribution example for an employee earning ₹18,000 gross:
| Component | Rate | Amount (₹) | Paid By |
|---|---|---|---|
| Employee contribution | 0.75% of ₹18,000 | 135 | Deducted from salary |
| Employer contribution | 3.25% of ₹18,000 | 585 | Employer |
| Total ESI deposit | 4% | 720 |
ESI contribution periods:
| Contribution Period | Benefit Period |
|---|---|
| April to September | January to June (following year) |
| October to March | July to December |
What happens when an employee’s salary crosses ₹21,000: ESI deductions stop from the next contribution period. The employee remains covered for medical benefits until the end of the current benefit period.
Deep Dive: TDS Compliance (Monthly + Quarterly)
TDS on salaries has both monthly payment deadlines and quarterly filing requirements. Here is the complete picture:
Monthly TDS tasks:
| Task | What to Do | Deadline |
|---|---|---|
| Calculate TDS for each employee | Based on projected annual income, tax regime choice, and investment declarations | During payroll processing |
| Deduct TDS from salaries | Deduct the calculated TDS amount from each employee’s salary | On salary payment date |
| Deposit TDS with government | Pay via Challan 281 on the NSDL/TIN portal | 7th of next month |
| Record challan details | Save BSR code, challan serial number, and date of deposit | After payment |
Quarterly TDS return filing (Form 24Q):
| Quarter | Period | Filing Deadline |
|---|---|---|
| Q1 | April to June | July 31st |
| Q2 | July to September | October 31st |
| Q3 | October to December | January 31st |
| Q4 | January to March | May 31st |
Annual TDS tasks:
| Task | Deadline |
|---|---|
| Collect investment proofs from employees | January (for the current financial year) |
| Recalculate TDS based on actual investments | February |
| Adjust excess or short TDS in March salary | March |
| File Q4 return (Form 24Q) with Annexure II | May 31st |
| Generate and issue Form 16 to all employees | June 15th |
TDS deposit rule to remember: TDS deducted in any month must be deposited by the 7th of the next month. The only exception is March: TDS deducted in March must be deposited by April 30th.
For a complete TDS guide, see our articles on TDS on salaries and TDS compliance responsibilities.
Deep Dive: Professional Tax (Monthly or Annual)
Professional Tax is a state government levy. The rules, rates, and due dates vary significantly from state to state.
State wise PT due dates:
| State | Payment Frequency | Monthly Due Date | Annual Return Due Date |
|---|---|---|---|
| Maharashtra | Monthly | Last day of month | March 31st |
| Karnataka | Monthly | 20th of next month | No annual return |
| West Bengal | Monthly | 21st of next month | No annual return |
| Tamil Nadu | Half yearly | April 30th and October 30th | No separate return |
| Andhra Pradesh | Monthly | 10th of next month | No annual return |
| Telangana | Monthly | 10th of next month | No annual return |
| Gujarat | Monthly | Last day of month | March 31st |
| Madhya Pradesh | Monthly | 10th of next month | No annual return |
| Kerala | Half yearly | Within 30 days of half year end | No separate return |
| Bihar | Monthly | Last day of month | No annual return |
| Jharkhand | Monthly | Last day of month | No annual return |
| Assam | Monthly | Last day of month | No annual return |
| Odisha | Not applicable | Not applicable (abolished April 2024) | Not applicable |
States with NO Professional Tax: Delhi, Haryana, Uttar Pradesh, Rajasthan, Punjab, Uttarakhand, Himachal Pradesh, Jammu and Kashmir, Goa, and several northeastern states.
Employer PT obligations:
| Obligation | Detail |
|---|---|
| Registration | Register as an employer with your state’s PT authority |
| Enrolment certificate | Obtain an enrolment certificate (employer PT) |
| Deduction | Deduct PT from employee salaries based on state slab rates |
| Deposit | Deposit collected PT with the state government by the due date |
| Return filing | File monthly or annual PT returns as per state rules |
| Own PT | Pay your own PT as a business owner/employer |
Quarterly and Annual Compliance Calendar
Beyond monthly tasks, certain compliance filings happen quarterly, half yearly, or annually. Here is the complete picture:
Quarterly Filings
| Quarter | Filing | Due Date | Portal |
|---|---|---|---|
| Every quarter | Form 24Q (TDS on salary return) | 31st of the month following the quarter end | TRACES portal |
| Every quarter | Form 26Q (TDS on non salary return) | 31st of the month following the quarter end | TRACES portal |
| Every quarter | GSTR 1 (if quarterly filer under QRMP) | 13th of the month following the quarter end | GST portal |
| Every quarter | GSTR 3B (if quarterly filer under QRMP) | 22nd or 24th of the month following the quarter end | GST portal |
Half Yearly Filings
| Filing | Period | Due Date | Who Must File |
|---|---|---|---|
| ESI Return (if required by state) | April to September | November 11th | Establishments registered under ESI |
| ESI Return (if required by state) | October to March | May 11th | Establishments registered under ESI |
| Professional Tax (Tamil Nadu, Kerala) | Half yearly | Per state deadline | Establishments in these states |
Annual Filings
| Filing | Due Date | Details |
|---|---|---|
| Form 16 issuance to employees | June 15th | TDS certificate for all employees |
| PF Annual Return (EPFO) | April 30th | Annual return with employee contribution summary |
| ESI Annual Return | May 12th (approx.) | Summary of all contributions for the financial year |
| Bonus payment (under Payment of Bonus Act) | Within 8 months of closing the accounting year | Applicable if you have 20+ employees and employee salary is ≤ ₹21,000/month |
| Gratuity provision update | March 31st | Update gratuity liability in your books for eligible employees |
| Labour Welfare Fund (LWF) | Varies by state (June 30th and December 31st in many states) | State wise welfare fund contribution |
| Income Tax Return filing | October 31st (for businesses requiring audit) or July 31st (others) | Business income tax return |
| Professional Tax Annual Return | March 31st (in applicable states) | Annual summary of PT deductions |
| Shops and Establishment Act renewal | Anniversary of registration | Renew your shop license annually |
| Contract Labour Return (Form XXV) | February 15th | If you engage contract labour |
For a broader understanding of statutory obligations, read our guide on statutory compliance in India.
Month by Month Special Tasks Calendar (FY 2026-27)
Beyond the standard monthly cycle, certain months have additional compliance tasks:
| Month | Special Tasks |
|---|---|
| April | Start new financial year PF contributions. Update ESI contribution period (April to September). Renew any expiring licences. Update salary structures if appraisals are effective April. File PF annual return for previous year (by April 30th). |
| May | File Q4 TDS return Form 24Q for previous year (by May 31st). Begin collecting investment declarations from employees for the new year. |
| June | Issue Form 16 to all employees (by June 15th). File ESI half yearly return for October to March period (by mid June). |
| July | File Q1 TDS return Form 24Q (by July 31st). Pay advance tax first instalment if applicable (by July 15th). |
| August | Review employee bonus eligibility and calculate estimated bonus liability. Mid year PF and ESI compliance audit. |
| September | Pay advance tax second instalment if applicable (by September 15th). Close ESI contribution period (April to September). Update ESI contribution period (October to March). |
| October | File Q2 TDS return Form 24Q (by October 31st). File ESI half yearly return for April to September period. Begin new ESI contribution period. |
| November | Review and update labour law registrations. Prepare for bonus disbursement if accounting year closes in December/March. |
| December | Pay advance tax third instalment if applicable (by December 15th). Deposit Labour Welfare Fund (LWF) where applicable. Pay Diwali/festival bonus if promised. |
| January | Collect investment proofs from employees (deadline usually January 31st). File Q3 TDS return Form 24Q (by January 31st). Recalculate TDS projections based on actual investments. |
| February | Adjust TDS calculations based on investment proofs. Prepare for year end payroll closure. Send tax saving reminders to employees who have not submitted proofs. |
| March | Process final TDS adjustments. Deposit advance tax final instalment (by March 15th). Close books for the financial year. Prepare for PF and ESI annual returns. Renew Professional Tax registration if required. Update gratuity provision. Pay statutory bonus (if accounting year ends March 31st). |
Penalty Quick Reference: What You Pay for Missing Deadlines
Here is what it costs when you miss a compliance deadline:
PF Penalties
| Violation | Penalty |
|---|---|
| Late PF payment (up to 2 months) | Interest at 12% per annum on delayed amount |
| Late PF payment (beyond 2 months) | Interest at 12% per annum + damages |
| Damages for delay up to 2 months | 5% of arrears per annum |
| Damages for delay of 2 to 4 months | 10% of arrears per annum |
| Damages for delay of 4 to 6 months | 15% of arrears per annum |
| Damages for delay beyond 6 months | 25% of arrears per annum (up to 100% of arrears) |
| Non filing of ECR | EPFO can initiate proceedings under Section 7A |
| Non registration despite having 20+ employees | Prosecution under Section 14, fine up to ₹5,000 + ₹100/day |
| Deducting PF but not depositing | Criminal offence under IPC Section 405/406 (breach of trust). Arrest warrants possible. |
ESI Penalties
| Violation | Penalty |
|---|---|
| Late ESI contribution | Interest at 12% per annum on delayed amount |
| Non registration of eligible establishment | Prosecution, fine, and back payment of all dues |
| Non coverage of eligible employees | Back contributions + interest + potential prosecution |
| Providing false information | Imprisonment up to 2 years or fine up to ₹5,000, or both |
TDS Penalties
| Violation | Penalty |
|---|---|
| Late TDS deposit (delay from deduction date) | Interest at 1.5% per month (part of a month counts as full month) |
| Non deduction of TDS | Interest at 1% per month from when it should have been deducted |
| Late filing of TDS return | ₹200 per day until return is filed (capped at TDS amount) |
| Incorrect information in TDS return | Penalty of ₹10,000 to ₹1,00,000 |
| Non issuance of Form 16 | Penalty of ₹100 per day per employee |
| Non filing of TDS return beyond 1 year | Prosecution, fine of ₹10,000 to ₹1,00,000, imprisonment of 3 months to 7 years |
Professional Tax Penalties
| Violation | Penalty (varies by state) |
|---|---|
| Late PT payment | Interest of 1% to 2% per month (state specific) |
| Non registration | Fine and back payment of dues |
| Non deduction from employees | Employer becomes personally liable for the amount |
Read more about all labour law penalties in our complete penalty guide.
Real Scenario: Monthly Compliance for a 30 Employee Company in Bangalore
Let us walk through the exact compliance tasks for Priya, who runs a digital marketing agency in Bangalore with 30 employees.
Priya’s company profile:
| Detail | Information |
|---|---|
| Location | Bangalore, Karnataka |
| Total employees | 30 |
| Salary range | ₹18,000 to ₹85,000 per month |
| PF applicable | Yes (30 employees, above 20 threshold) |
| ESI applicable | Yes for 8 employees earning below ₹21,000 gross |
| Professional Tax | Yes (Karnataka state PT applies) |
| TDS applicable | Yes (for employees with taxable income) |
Priya’s monthly compliance amounts:
| Compliance | Calculation | Monthly Amount (₹) |
|---|---|---|
| PF (Employee share) | 12% of basic for 30 employees (capped at ₹15,000) | 54,000 |
| PF (Employer share) | 12% of basic for 30 employees | 54,000 |
| PF Admin charges | 0.50% of basic for 30 employees | 2,250 |
| EDLI charges | 0.50% of basic for 30 employees | 2,250 |
| ESI (Employee share) | 0.75% of gross for 8 eligible employees | 1,080 |
| ESI (Employer share) | 3.25% of gross for 8 eligible employees | 4,680 |
| Professional Tax | ₹200 per employee for 30 employees | 6,000 |
| TDS | Based on individual tax slabs for 22 taxable employees | ~1,45,000 (varies) |
| Total monthly compliance outflow | ~2,69,260 |
Priya’s monthly timeline:
| Date | What Priya Does | Time Spent |
|---|---|---|
| Oct 1 | Locks September attendance in SalaryBox | 30 minutes |
| Oct 2 to 3 | Reviews salary calculations, checks for any changes | 1 hour |
| Oct 4 | Processes salary payments for all 30 employees | 30 minutes |
| Oct 5 | Generates payslips and shares with employees | 15 minutes |
| Oct 7 | Deposits ₹1,45,000 TDS via Challan 281 | 30 minutes |
| Oct 10 | Prepares PF ECR file with all employee details | 45 minutes |
| Oct 12 | Uploads ECR on EPFO portal, verifies data | 30 minutes |
| Oct 14 | Deposits ₹1,12,500 PF (employee + employer + admin + EDLI) | 30 minutes |
| Oct 15 | Deposits ₹5,760 ESI on ESIC portal | 20 minutes |
| Oct 20 | Deposits ₹6,000 Professional Tax (Karnataka deadline: 20th) | 20 minutes |
| Oct 25 | Handles 2 new joiner PF registrations | 30 minutes |
| Oct 30 | Reviews compliance tracker, archives receipts | 20 minutes |
| Total time | ~5.5 hours per month |
Without payroll software, this same process takes Priya 3 to 4 full working days because of manual calculations, repeated portal visits, and error corrections.
The Compliance Readiness Checklist (Print This)
Before each month’s compliance cycle begins, make sure you have everything in place:
Documents and data you need:
| Item | Why You Need It | Status Check |
|---|---|---|
| Final attendance data for the month | Calculates actual salary payable | Verified? |
| Leave records with balances | Adjusts salary for leave without pay | Updated? |
| Overtime records | Calculates overtime pay at 2x rate (new labour codes) | Recorded? |
| New joiner details | PF UAN generation, ESI IP number, bank account | Collected? |
| Exit details | Full and final settlement, PF transfer/withdrawal | Processed? |
| Salary revision letters | Updated salary for PF/ESI calculations | Applied? |
| Investment declarations (if new) | Recalculate TDS projection | Received? |
| Reimbursement claims | Add to salary or reimburse separately | Approved? |
| Advance salary recovery | Deduct agreed EMI from salary | Noted? |
| Loan recovery (if any) | Deduct loan installment from salary | Noted? |
Portal access you need:
| Portal | URL | What You Do There |
|---|---|---|
| EPFO Unified Portal | unifiedportal-emp.epfindia.gov.in | Upload ECR, make PF payment |
| ESIC Portal | esic.gov.in | Deposit ESI contribution |
| TRACES | traces.tdscpc.gov.in | File TDS returns, download Form 16 |
| Income Tax e-Filing | incometax.gov.in | File Challan 281 for TDS deposit |
| State PT Portal | Varies by state | Deposit Professional Tax |
| Company bank account | Your bank’s portal | Process salary transfers |
Make sure your login credentials for all portals are current. Portal passwords expire periodically, and resetting them on the 15th when PF is due is a stressful experience.
5 Most Common Compliance Mistakes Small Businesses Make
| # | Mistake | Why It Happens | Cost of the Mistake | How to Prevent It |
|---|---|---|---|---|
| 1 | Missing the 15th for PF/ESI because salary was processed late | Attendance data comes in late, approvals are delayed | Interest at 12% per annum + damages that escalate monthly | Process attendance by the 1st, run payroll by the 5th |
| 2 | Depositing TDS in the wrong assessment year or wrong section code | Confusion between salary TDS (192) and contractor TDS (194C) | TDS not matched to employee PAN. IT department sends notices. | Use payroll software that auto generates the correct challan |
| 3 | Not updating salary changes in PF portal | Employee got a raise but PF contribution was not revised | Under contribution. EPFO notices during inspection. | Update salary in payroll system first, ECR auto reflects |
| 4 | Forgetting to register new employees for ESI | New hire joins mid month, HR forgets to generate IP number | Employee denied ESI medical benefits. Employer faces penalty. | Set up a checklist: Day 1 joining triggers ESI registration |
| 5 | Not filing quarterly TDS returns despite depositing TDS | Many SMEs deposit TDS monthly but forget the quarterly Form 24Q | ₹200/day penalty. Employees cannot see TDS credit in Form 26AS. | Set quarterly calendar reminders: Jul 31, Oct 31, Jan 31, May 31 |
Learn more about common errors in our article on payroll mistakes that haunt businesses.
How SalaryBox Automates Your Compliance
If tracking all these deadlines manually feels overwhelming, you are not alone. That is why SalaryBox is built specifically for Indian small businesses to automate compliance alongside payroll.
| Compliance Task | How SalaryBox Helps |
|---|---|
| PF calculation | Auto calculates employee and employer PF based on current rules and wage ceiling |
| ESI calculation | Identifies eligible employees (≤ ₹21,000 gross) and calculates contributions automatically |
| TDS computation | Calculates monthly TDS based on employee’s regime choice, investments, and projected income |
| Professional Tax | Built in state wise PT slab rates. Auto deducts based on employee’s work location |
| Payslip generation | One click payslips with all earnings and deductions, ready to share |
| Compliance reminders | Automated alerts before PF (15th), ESI (15th), and TDS (7th) deadlines |
| Record keeping | All payroll and compliance data stored securely in the cloud with full audit trail |
| New joiner registration | Streamlined employee onboarding with PF and ESI registration assistance |
Stop tracking deadlines on sticky notes and Excel sheets. Let SalaryBox handle the compliance math and reminders while you focus on growing your business.
Try SalaryBox free and see how simple compliance can be.
Frequently Asked Questions (FAQs)
Q1: What is the penalty for depositing PF one day late?
Even one day of delay attracts interest at 12% per annum on the outstanding amount under Section 7Q of the EPF Act. Additionally, damages under Section 14B can apply. For example, if your monthly PF liability is ₹1,00,000 and you deposit it on the 16th instead of the 15th, you owe interest. While one day’s interest is a small amount (~₹33), the EPFO calculates on the full month. More importantly, consistent late payments attract higher damage rates (from 5% to 25% per annum) and can trigger an inspection or show cause notice.
Q2: I have 12 employees but some earn above ₹21,000. Do I still need ESI registration?
Yes. ESI registration is based on the total number of employees (10 or more in most states), not on their salary levels. Once your establishment is registered, ESI contributions are deducted only from employees whose gross salary is ₹21,000 or below. Employees earning above ₹21,000 are exempt from ESI deductions, but your establishment must remain registered as long as you have 10 or more employees.
Q3: Can I file PF and ESI payments together?
No. PF and ESI are separate statutory schemes managed by different government bodies. PF is managed by the Employees’ Provident Fund Organisation (EPFO) and paid through the EPFO Unified Portal. ESI is managed by the Employees’ State Insurance Corporation (ESIC) and paid through the ESIC portal. Both have the same deadline (15th of the following month), but you must file and pay them separately on their respective portals.
Q4: What happens if I file the quarterly TDS return (Form 24Q) late but deposited TDS on time?
Even if you deposited TDS on time every month, late filing of Form 24Q attracts a penalty of ₹200 per day under Section 234E of the Income Tax Act. This penalty runs from the due date until the actual filing date, but is capped at the total TDS amount for that quarter. For example, if your quarterly TDS is ₹3,00,000 and you file 30 days late, the penalty is ₹6,000 (30 × ₹200). Additionally, your employees will not see TDS credit in their Form 26AS until the return is processed, which delays their ITR filing.
Q5: Do I need to maintain compliance records in physical format or is digital acceptable?
Digital records are legally valid under the Information Technology Act, 2000 and are accepted by PF, ESI, and income tax departments during inspections. However, it is recommended to maintain both digital and physical copies of critical documents such as PF ECR receipts, ESI challans, TDS challan receipts, and salary registers. The retention period is typically 3 years for labour law records, 7 years for income tax records, and permanent for PF records. Cloud based payroll software automatically maintains these digital records.
Q6: My company operates in two different states. Do I need separate PF and ESI registrations?
For PF, you can operate with a single PF establishment code if all branches are under the same legal entity, though many companies get separate codes for administrative convenience. For ESI, you need separate registration for each state because ESI is administered by state governments. For Professional Tax, you definitely need separate registrations because PT is entirely a state level tax with different rules, rates, and deadlines in each state.
Q7: Is there any grace period for PF and ESI deadlines?
There is no official grace period for PF or ESI payments. The 15th of the following month is a hard deadline. However, when the 15th falls on a Sunday or public holiday, the deadline extends to the next working day. The EPFO portal sometimes experiences technical issues on the 14th and 15th due to heavy traffic. To avoid this, it is advisable to upload your ECR and initiate payment by the 12th or 13th. If the portal itself was down and you can prove it (through screenshots or EPFO advisories), you may request a waiver of interest, though this is not guaranteed.
Q8: How do I handle compliance when I have both regular employees and contract workers?
For regular employees, all compliance (PF, ESI, TDS, PT) is directly your responsibility. For contract workers engaged through a contractor, the principal employer (you) must ensure the contractor complies with PF and ESI for their workers. Under the Contract Labour (Regulation and Abolition) Act, 1970, if the contractor fails to make PF and ESI contributions for their workers, you (the principal employer) become liable. It is best practice to verify contractor compliance monthly by requesting PF ECR receipts and ESI challans before releasing contractor payments.
