How to Run Payroll in India From the UK

The short answer

To run payroll in India from the UK, you need a legal entity in India and software that calculates Indian payroll — TDS, Provident Fund, ESI, and professional tax — and guides you through filing with the Indian authorities. Mellow does this from one platform, so a UK business with an Indian entity runs both countries in the same system.

First: do you have an Indian entity?

This is the gating question. If your business has a registered legal entity in India, you can employ people there directly and run Indian payroll yourself — and this article is for you.

If you do not have an Indian entity and do not want to set one up, you cannot simply "run payroll" in India. You would need an Employer of Record to be the legal employer for you. Mellow does not provide EOR; a provider such as Deel does.

Running Indian payroll, assuming you have an entity

Indian payroll has four main components:

- TDS — tax deducted at source — income tax withheld from salary, under either the old regime (six slabs) or the new regime (seven slabs), depending on the employee's choice.

- Provident Fund (PF) — a retirement scheme, broadly 12% from the employee and 12% from the employer, with an employer wage cap.

- ESI — Employee State Insurance — a health scheme for employees earning up to ₹21,000 per month, roughly 0.75% employee and 3.25% employer.

- Professional tax — a state-level tax that exists in some states, capped at ₹2,500 per year.

Filing is done through Indian government portals: TDS through TRACES, PF through the EPFO portal, ESI through the ESIC portal.

How Mellow helps a UK business run India

Mellow calculates Indian payroll with all four components — TDS under both regimes, PF with the employer cap, ESI where the threshold applies, and state professional tax — and produces payslips in rupees.

For a UK business with an Indian entity, the advantage is one platform. Your UK employees and your Indian employees live in the same Mellow account. UK payroll runs with RTI submitted directly to HMRC; Indian payroll runs with a guided submission for TRACES, EPFO, and ESIC. Same process, different country rules.

The honest detail

Mellow does not file with the Indian authorities for you — it calculates accurately and guides the submission. You keep control of your Indian filing credentials. Direct portal integration is a planned future enhancement.

For a UK business employing people in India through its own entity, see how Mellow handles multi-country payroll.