Your first Indian hire brings four regulators with them.

Once the establishment has twenty or more employees. Contribution is 12% from the employee and 12% from the employer on basic pay plus dearness allowance, with the employer share split between the pension scheme and the provident fund. Mandatory coverage is tied to a statutory wage ceiling of ₹15,000 a month, though employees above it are commonly covered voluntarily. Payment and the electronic challan return are due by the 15th of the following month.

From ten or more employees in most states, and twenty in a few. It covers employees earning up to ₹21,000 a month, at 0.75% from the employee and 3.25% from the employer, payable by the 15th of the following month. It is a medical and cash-benefit scheme rather than a tax, and coverage is decided employee by employee against the wage limit.

Provident fund and, where applicable, employees state insurance are the two statutory schemes, with gratuity as a separate statutory payment on exit. On top of those sit professional tax in the states that levy it and monthly deduction of income tax from salary. There is no single combined payroll tax in India — each one has its own registration, its own due date and its own return.

This is the point most groups get wrong. A foreign national employed by an Indian establishment has historically been treated as an international worker and required to contribute to the provident fund from the first day, without the ₹15,000 wage ceiling that applies to local employees — so on full salary. The provisions were struck down by the Karnataka High Court in 2024 and the position is under appeal, so the answer is genuinely unsettled and should be confirmed for your facts rather than assumed either way.

India has social security agreements with around twenty countries, largely in Europe plus Japan, South Korea, Canada, Australia and Brazil. Where one applies, an employee sent to India on assignment can stay in their home scheme and be exempted from the Indian provident fund by producing a certificate of coverage, which avoids paying into two systems and losing the benefit of both. Where there is no agreement, no such exemption exists.

A small state tax on employment, deducted from salary by the employer and paid to the state. Around half the states levy it, including Maharashtra, Karnataka, West Bengal, Tamil Nadu, Gujarat and Telangana. Delhi and Uttar Pradesh do not. It is capped by the Constitution at ₹2,500 a year per person, so the amounts are small — but the registration is a state registration, and a company employing people in several states may need several.

Gratuity is payable where the establishment has ten or more employees, to a person who completes five years of continuous service, at fifteen days of wages for each completed year. It is a statutory obligation rather than a discretionary bonus, and because it accrues quietly it should be provided for in the accounts as it builds rather than recognised when the first long-serving employee resigns.

No. We handle the registrations, the contributions, the deductions and the filings. Employment contracts, termination, disciplinary process and the workplace harassment requirements are law rather than compliance filing, and they belong with an Indian employment lawyer. We will say when something you are planning has crossed from one into the other.