Choosing payroll software that handles India
Reviewed by Mellow Editorial Team, HR & payroll content team
Running payroll in India means handling EPF, ESI, TDS, professional tax, Labour Code compliance and more — all with state-level variations and quarterly filing deadlines. The right payroll software takes that off your plate; the wrong one leaves you doing the hard parts manually.
What "handles India" actually means
A lot of software will tell you it supports India. What that usually means is it can generate a payslip with an Indian rupee sign. That is not the same as handling India.
Genuinely handling India means:
- EPF and ESI calculations — correct employer and employee contributions, ECR file generation, and timely challan payments
- TDS under the new tax regime — applying the correct slabs, the section 87A rebate where eligible, and the 4% health and education cess
- Form 24Q filing — quarterly TDS returns submitted to TRACES, with Form 16 issued to employees at year end
- Professional tax — which varies by state and, in some states, by salary band
- Labour Code alignment — India's four consolidated Labour Codes, in force from 2025, affect how wages, gratuity, and working conditions are defined; your software should reflect this
- Gratuity tracking — identifying which employees are approaching or have crossed five years of service
If a vendor cannot clearly answer how they handle each of these, treat that as a red flag.
The main categories of software available
Indian-built, India-focused tools (Keka, greytHR, Darwinbox, Spine, and others) are built from the ground up for the Indian statutory landscape. They tend to have deep compliance coverage, strong local support teams, and integrations with Indian banking and government portals. For a company hiring only or primarily in India, these are often the most practical choice. The trade-off: if you also hire internationally, you will need a separate system for those employees.
Global HR platforms with an India module (SAP SuccessFactors, Workday, Rippling, and similar) serve large enterprises that want a single system across many countries. India support is present but sometimes handled via a local payroll partner rather than natively. Configuration tends to be complex and implementation costs can be significant. These make sense at a certain scale; they are usually overkill for a 50-person team.
Employer of Record platforms (Deel, Remote, Multiplier, Mellow, and others) are not payroll software in the traditional sense. They employ your workers on your behalf in India, handling all statutory registrations, contributions, and filings as the legal employer. This is relevant if you are hiring in India but do not have — or do not want to set up — an Indian entity. Mellow runs payroll across multiple countries through a single platform, which matters if your team is spread across borders.
Questions worth asking any vendor
Before committing, ask these directly:
1. Do you handle EPF and ESI natively, or does the employer manage challan payments separately?
2. How do you calculate TDS across the financial year as salary changes? The answer should involve monthly recalculation against projected annual income, not a one-time figure.
3. Which states do you cover for professional tax, and how quickly do you update when rates change?
4. How do you handle the Labour Code definitions of wages? The definition of "wages" under the consolidated codes affects PF and gratuity bases — a software that has not updated its calculation engine may be understating your statutory liability.
5. What does your compliance calendar look like, and does the software alert you to upcoming deadlines?
6. What happens when there is an error in a filed return? Find out whether the vendor supports revision filings or leaves that to you.
Pricing structures and what to watch for
Indian payroll software is typically priced per employee per month, with a minimum employee count. Global platforms and EOR services usually have higher per-employee costs but bundle compliance and legal employer liability into that fee.
Watch for:
- Implementation and setup fees — common with larger platforms, and can be substantial
- Add-on costs for compliance modules that you might assume are included
- Minimum contract terms — some vendors lock you in for a year even for small headcounts
- Support tiers — dedicated account managers are sometimes only available on higher plans
For a small or mid-sized employer, a straightforward Indian payroll tool with a responsive support team will usually serve you better than an enterprise platform with more features than you will ever use.
Making the decision
Prioritise statutory accuracy over interface design. A clean dashboard that produces wrong ECR files or miscalculates TDS is a liability, not an asset. Ask for a demo that walks through an actual payroll run — including a mid-year salary revision and an employee exit — rather than just a features overview.
If you are hiring across India and other countries simultaneously, factor in the overhead of managing two separate systems. The total cost and administrative load of parallel tools sometimes makes a single EOR platform the more practical option, even if the per-employee cost looks higher on paper.
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