Payroll Processing in India: A Complete Guide | Palium Skills

Understanding Payroll Processing in India — A Complete Guide

 

Introduction

Payroll processing in India is more than just paying salaries—it’s a critical business function that ensures employee satisfaction and legal compliance. From calculating basic pay and deductions to managing PF, ESI, Professional Tax, and TDS, payroll professionals must handle it all with precision.

Palium Skills, a trusted name in corporate and individual upskilling, offers comprehensive Payroll Processing & Statutory Compliance courses that help professionals master every step of payroll management using real-world tools and examples.

The Core of Payroll Processing

Payroll begins with gathering employee data—attendance, salary structure, incentives, and deductions. Once the gross salary is computed, statutory deductions like PF, ESI, and income tax are applied, leading to the final net pay.

A typical payroll cycle includes:

1. Salary calculation

2. Deduction of statutory contributions

3. Payslip generation

4. Compliance filing (PF, ESI, TDS)

5. Form 16 issuance at year-end

Accuracy and compliance are key—errors can invite penalties and loss of trust.

Statutory Compliance Overview

• Provident Fund (PF): 12% contribution from employee and employer each; managed by EPFO.

• Employees’ State Insurance (ESI): Medical and cash benefits for employees earning under ₹21,000/month.

• Professional Tax (PT): State-level deduction applicable in select Indian states.

• Gratuity: Paid after 5 years of service under the Payment of Gratuity Act.

• TDS on Salary: Employers deduct tax and issue Form 16 annually

Palium Skills’ Training Advantage

Palium Skills offers practical training in:

• Salary structure & CTC design

• PF/ESI calculation and online filing

• TDS deduction and return submission

• Excel and payroll software usage

• Form 16 generation and compliance reports

Courses are available both offline (classroom) and live online, designed for HR professionals, accountants, and corporate teams.

Payroll management is an evolving field—new tax regimes, digital tools, and changing labor laws require constant learning. 

Palium Skills helps learners stay ahead with its structured, hands-on approach to Indian Payroll and Statutory Compliance training.