Payroll and Labour Compliance 2026 — EPF, ESIC, Bonus, Gratuity, Contract Labour, Minimum Wages, Notices
Quick answer: Since 21 November 2025 payroll sits under the Code on Wages, the Social Security Code, the Industrial Relations Code and the OSH Code. Monthly cycle: TDS on salary by the 7th (30 April for March deductions), EPF and ESIC contributions by the 15th (ESIC at 3.25% employer and 0.75% employee). Statutory bonus is a minimum of 8.33% of wages or ₹100, whichever is higher, for eligible employees who worked at least 30 days; fixed-term employees earn gratuity after one year of service instead of five; and contract-labour provisions apply once an establishment uses 50 or more contract workers, with a single contractor licence valid for five years as summarised by law firms. Normal hours are 8 a day and 48 a week, with overtime at twice the ordinary rate with the worker's consent. State rules decide forms and fees, and several are still draft.
Last verified 5 October 2026 — rules on this page checked against the current notifications. We update it the day a rule changes.
Payroll compliance calendar
| Item | Rule | Due |
|---|---|---|
| TDS on salary | Deposit the tax deducted; quarterly statements — see TDS returns and Form 130 | 7th of the next month (30 April for March deductions) |
| EPF | Employer and employee contributions with the ECR return | 15th of the next month |
| ESIC | Employer 3.25% and employee 0.75% of wages for covered employees | 15th of the next month |
| Professional tax | State levy — Bihar levies it (Bihar PT); Delhi, Haryana and Uttar Pradesh do not | As per the state schedule |
| Statutory bonus | Eligible employees up to the notified wage ceiling (₹21,000 per month in the Code summaries) who worked at least 30 days: minimum 8.33% of wages or ₹100, whichever is higher | Within the period fixed under the Code after the accounting year |
| Gratuity | Fixed-term employees after one year of continuous service, proportionate to tenure; other employees five years as before | On exit or as per the Code and rules |
| Working hours | 8 hours a day and 48 hours a week; overtime with consent at twice the ordinary wage rate | Continuous |
| Minimum wages | Floor wage under the Code on Wages; each state notifies its rates and revises them — confirm the current notification for Delhi, Haryana, Uttar Pradesh or Bihar | As notified |
What changed with the Codes
- Fixed-term employment is recognised, with parity in wages and benefits with permanent staff, and gratuity after one year of service (PIB release of 21 November 2025)
- Contract labour: the OSH Code applies the contract-labour regime from 50 or more contract workers in the previous twelve months (earlier 20), brings inter-state migrant workers within it, and moves to a contractor licence valid across India for five years as law-firm summaries describe it; the principal employer carries health and social-security obligations for contract workers
- Wage definition: the Code on Wages sets one definition of wages with listed exclusions that cannot exceed half of total remuneration, which feeds into PF, gratuity and bonus calculations — salary structures should be re-checked
- Rules status: the central rules were notified in May 2026, but the State rules that govern most private establishments in Delhi-NCR and Bihar are at different stages — see the table in our Labour Code compliance guide
Labour inspection and notices
- Labour notice reply: acknowledge receipt, collect registers (wages, attendance, overtime, bonus), reply point by point with documents and attend the hearing; unanswered notices lead to inspection reports and prosecution
- Inspections: keep the registration certificates, challans, wage registers, appointment letters and POSH records ready — see POSH compliance
- The Shram Suvidha portal issues the Labour Identification Number (LIN) used for inspection and return tracking; registration steps by state are in the Shop Act and factory licence guides
What we do
- Payroll processing with statutory deductions, EPF/ESIC/TDS filings, bonus and gratuity workings, full-and-final settlements
- Contractor and principal-employer compliance, labour registrations, registers and notice replies; representation before labour authorities in Delhi-NCR and Bihar
- Salary-structure review against the new wage definition; employment agreements — drafting
Dates, forms and thresholds are quoted from the governing Act, rules and official portals; where a figure changes by notification or year, the page says so and we confirm it at filing rather than estimate.
Deducting or collecting tax? TAN (Forms 134/135) and TCS returns (Form 143).
Talk to us before you file anything
Frequently asked questions
When are EPF and ESIC contributions due?
By the 15th of the following month for both, with the EPF ECR return filed along with the contribution.
What is the ESIC contribution rate?
Employer 3.25% and employee 0.75% of wages for employees covered by ESIC.
What is the minimum statutory bonus?
At least 8.33% of wages or ₹100, whichever is higher, for eligible employees under the wage ceiling who worked at least 30 days in the accounting year.
Do fixed-term employees get gratuity?
Yes — after one year of continuous service, proportionate to tenure, under the Social Security Code in force since 21 November 2025.
When does the contract labour licence apply?
When an establishment employs 50 or more contract workers in the previous twelve months, up from 20 earlier, under the OSH Code.
Do I pay professional tax in Delhi, Haryana or Uttar Pradesh?
These states do not levy professional tax; Bihar does, and the rate depends on the salary slab.
What are the working-hour limits now?
Normal hours are 8 a day and 48 a week; overtime is allowed with the worker's consent and is paid at twice the ordinary rate.
How should I reply to a labour department notice?
Acknowledge it, collect the relevant registers and challans, reply point by point with documents and attend the hearing; an unanswered notice leads to an inspection report and possible prosecution.