HR (HRM)
Country pack: India
Run HR and payroll for a legal entity in India: provident fund (EPF, EPS, EDLI), employees' state insurance (ESI), income tax withheld from salary under the new or the old regime, gratuity and bonus provisions, professional tax and the labour welfare fund for each state, leave, holidays, working hours, letters in English and Hindi, the EPF ECR file and the statutory returns.
Contents: Who can use it · What the pack contains · States · Install · Employee fields · Payroll · Income tax · End of service · Returns and files · Status of the figures · Example · FAQ
Who can use it
Admins and HR staff who can install country packs on a legal entity. Payroll content (pay components, state rules, returns, salary files) needs payroll on your plan.
What the pack contains
The pack follows the four Labour Codes (in force from 21 November 2025) and the Income-tax Act, 2025 (from the tax year 2026-27).
| Area | What you get |
|---|---|
| Wages | Wages for provident fund, gratuity and bonus follow the Code on Wages: all pay except house rent, conveyance and overtime, and never less than half of the month's pay |
| Provident fund | Employee 12% of EPF wages; employer 12%, of which 8.33% goes to the pension scheme (EPS); EDLI 0.5% and administration charges 0.5%; wages capped at Rs 15,000 unless both sides contribute on full wages; no pension share from age 58 |
| State insurance (ESI) | Employee 0.75% and employer 3.25% for people earning up to Rs 21,000 a month, rounded up to the next rupee; people earning Rs 176 a day or less pay no share |
| Income tax | Tax withheld every month under the person's regime: new regime (the default, standard deduction Rs 75,000, no tax up to Rs 12 lakh) or old regime (standard deduction Rs 50,000, deductions from the tax declaration); surcharge with marginal relief and 4% cess |
| Gratuity | 15 days' wages (wages / 26) for each completed year after five years, at most Rs 20 lakh; fixed-term staff from one year, pro rata. A monthly provision is kept |
| Bonus | A monthly provision at 8.33% for people with wages up to Rs 21,000 (on wages up to Rs 7,000) |
| Leave | Annual leave with wages (15 days), maternity 26 weeks, 12 weeks for a third child or adoption, 6 weeks for a miscarriage |
| Holidays | Republic Day, Independence Day, Gandhi Jayanti (add your state's festival holidays) |
| Working time | 8 hours a day, 48 a week, Sunday off; overtime at twice the rate |
| Notice | 30 days each way by default; probation up to 180 days (both can be changed in Pack settings) |
| Letters | Experience certificate, relieving letter and salary certificate, in English and Hindi |
| Returns | EPF ECR text file, ESI monthly contributions, salary TDS quarterly data (Form 138), salary certificate data (Form 130), professional tax and welfare fund by state |
| Calendar | EPF and ESI by the 15th, TDS deposit by the 7th, quarterly returns, salary certificates by 15 June, statutory bonus by 30 November |
The pack also carries contract clauses (English and Hindi), data protection defaults and electronic signature rules.
State rules
Professional tax and the labour welfare fund are set by each state. The pack carries one set of state rules (a state sub-pack) for each of these states:
| State | Professional tax (monthly salary) | Labour welfare fund (employee / employer) |
|---|---|---|
| Maharashtra | Up to Rs 7,500 nil; up to Rs 10,000 Rs 175; above Rs 200 (Rs 300 in February). Women up to Rs 25,000 nil | Rs 25 / Rs 75 in June and December |
| Karnataka | From Rs 25,000: Rs 200 (Rs 300 in February) | Rs 50 / Rs 100 in December |
| Tamil Nadu | Half-yearly on six months' salary, from Rs 180 to Rs 1,250 (Chennai rates), taken in August and February | Rs 20 / Rs 40 in December |
| Telangana | Rs 15,001 to 20,000: Rs 150; above Rs 200 | Rs 2 / Rs 5 in December |
| West Bengal | From Rs 110 to Rs 200 in four steps above Rs 10,000 | Rs 3 / Rs 15 in June and December |
| Gujarat | From Rs 12,000: Rs 200 | Rs 6 / Rs 12 in June and December |
| Delhi | No professional tax | Rs 0.75 / Rs 2.25 in June and December |
Each person's state is the Work state field on the profile. Professional tax and the welfare fund are taken only for the state chosen there. For a state not in the list, choose Other state: add that state's charges yourself as pay components.
Install the pack
- Go to Settings → Legal entities and open the legal entity (its country must be India).
- Click Install country pack and choose India: private sector, central rules with state sub-packs (draft).
- Read the preview. It lists what will be added to your setup: pay components, state rules, holidays, leave types, work rules, letters and employee fields.
- Tick the notice that the pack is not yet verified and click Install.
All state rules go into one India monthly pay group, so people in different states are paid in the same run. Letters arrive as drafts: read them and publish them in Documents and letters before use.
Employee fields
The pack adds a Statutory (India) section to every employee profile of that country:
- Universal Account Number (UAN): 12 digits. Needed for the ECR file.
- ESI insurance number (IP number): 10 digits.
- Work state: decides professional tax and the welfare fund.
- Not a provident fund member: Yes only for an excluded employee (joined above the wage ceiling and never a member before).
- No pension scheme share: Yes for people who first joined the provident fund after 1 September 2014 with wages above the ceiling.
- Provident fund on full wages: Yes when the company and the person contribute on wages above Rs 15,000.
- ESI continues this period: Yes when the person was covered at the start of the contribution period (April to September, October to March) and the pay has since gone above Rs 21,000.
- Exempt from professional tax and Outside the labour welfare fund: for people the state's act does not cover.
Put the PAN under the employee's Tax ID and the Aadhaar number under National ID. These are not set from nationality: HR fills them in for each person.
Payroll
The pack replaces the starter India template's statutory lines. On the payslip you see:
- EPF (employee 12%) and EPF and EPS (employer 12%) in the provident fund columns.
- ESI (employee 0.75%) and ESI (employer 3.25%) for covered people.
- Professional tax and Labour welfare fund of the person's state, in the months they are due.
- Income tax (TDS) in the tax column.
Behind the payslip, the calculation keeps the EPF, EPS and EDLI wages, the days without wages and the provisions for gratuity and bonus. They feed the returns.
Income tax and declarations
Each person chooses a regime in My tax declaration for the tax year (April to March). Without a declaration the new regime applies. Under the old regime the person declares savings (Rs 1.5 lakh), additional NPS (Rs 50,000), health insurance (Rs 25,000 for the family and up to Rs 50,000 for parents), home loan interest (Rs 2 lakh), house rent, education loan interest and leave travel, and uploads proofs. Under the new regime only the employer's NPS contribution can be declared. A declared amount counts once HR verifies its proof, up to the limit.
Each month the tax for the year is worked out on the pay so far, this month's pay and the monthly gross for the months left. The tax already withheld is taken off and the rest is spread over the months left. Savings are counted only as declared, so include your provident fund in the savings line.
End of service
The settlement adds Gratuity after five years of service, for resignation and termination: 15 days' wages for every completed year (a part over six months counts as a year), at most Rs 20 lakh. For a fixed-term contract that ends, Gratuity (fixed-term employment, pro rata) applies from one year. The pay on file for the settlement must be the person's wages in the Code's sense. Final wages are due within two working days of the last day.
Retrenchment compensation and the reskilling fund are not worked out: add them to the settlement when they apply.
Returns and files
Make the returns in Compliance → Reports for a month, a quarter or the tax year:
- EPF electronic challan cum return (ECR): the text file to upload on the EPFO employer portal. One line per member with the UAN, name, gross, EPF, EPS and EDLI wages, the three contributions and the days without wages. People who are not members are left out.
- ESI monthly contributions: IP number, name, days paid and wages, to copy into the ESIC upload sheet.
- Salary TDS quarterly return data (Form 138) and Salary certificate data for the tax year (Form 130): PAN, regime, salary, professional tax, provident fund, verified declarations and tax withheld, per person.
- Professional tax and labour welfare fund by state: each person's state and amounts, for the state returns.
In a locked payroll run, the Bank file tab offers Bank transfer file (NEFT or RTGS: account number and IFSC). Match its columns to your bank's upload template.
Status of the figures
The pack is draft. It was written from the Labour Codes, the provident fund and state insurance rules, the Income-tax Act, 2025 and each state's acts as they stood in October 2026. Every item names its source and lists the points the reviewer must confirm. It becomes verified only after a qualified Indian reviewer signs. Until then every screen that uses it says the figures are not verified. Your company stays responsible for its filings.
Example scenario
Asha works in Pune (Maharashtra) on Rs 40,000 a month: basic Rs 20,000, house rent Rs 8,000, conveyance Rs 1,600 and special allowance Rs 10,400. Her wages under the Code are Rs 30,400, so her EPF wages stop at the ceiling of Rs 15,000. Payroll takes EPF of Rs 1,800 from her and books Rs 1,800 for the company (Rs 1,250 to the pension scheme, Rs 550 to the fund). She earns above the ESI limit, so no ESI is taken. Professional tax is Rs 200 (Rs 300 in February). The labour welfare fund takes Rs 25 in June and December. She stays on the new regime, and on Rs 4.8 lakh a year she pays no income tax.
Troubleshooting and FAQ
No professional tax for a person. Fill in Work state on the profile. Check that Exempt from professional tax is not set, and that the state has professional tax (Delhi has none).
The ECR is missing a person. Only provident fund members are listed: check Not a provident fund member. Fill in the UAN, or the line has no UAN.
ESI stopped after a raise in the middle of the period. Set ESI continues this period to Yes until the period ends.
The tax looks high under the old regime. Declarations count only once HR verifies the proof. Pay from an earlier employer in the same year is not included.
A state's rates changed. A new version of the pack carries the change. You see it under Compliance → Country packs and upgrade when ready. Until then you can change the amount in the pay component.