Decision Guide · Payroll
Payroll: online CA-assisted vs doing it yourself (India)
Payroll looks simple from the outside: pay salaries on time. The hard part is everything attached to it, provident fund, ESI, TDS on salary, and professional tax, each with its own portal, deadline and penalty for getting it wrong. You can run payroll yourself with software, or use an online CA-assisted service that handles the pay run and the statutory compliance together. This guide explains both routes honestly, so you can decide which fits the size and complexity of your team.
- DIY works for a small team with a simple structure if you know which rules apply and meet every deadline.
- Assisted is worth it when PF, ESI, TDS on salary and professional tax get complex or span states.
- The risk is a missed filing or a misapplied rule, not the salary calculation itself.
- Software automates calculations but does not own your statutory compliance; you do.
- Claw Tax: a verified CA runs payroll and compliance at a fixed published price with a reviewer check.
01What payroll really includes
Paying salaries is only the visible part. A compliant payroll in India also means handling several statutory obligations, each with its own system.
- Provident fund (PF): deduction and employer contribution, filed on the EPFO unified portal at epfindia.gov.in, where applicable.
- ESI: contributions for eligible employees, filed on the ESIC portal, where applicable.
- TDS on salary: tax deducted under section 192, deposited monthly and reported in quarterly TDS returns, with Form 16 issued to employees.
- Professional tax: a state levy in several states, with its own registration and periodic filing.
Thresholds and applicability vary
PF, ESI and professional tax apply based on headcount, wages and state. Whether and when each applies to you is a factual question; a wrong assumption here is a common source of penalties. Confirm applicability for your case before deciding to run it yourself.
02When doing it yourself works
For a very small team, running payroll yourself with good software is realistic. It can work when:
- You have a handful of employees and a simple salary structure.
- You understand which of PF, ESI and professional tax actually apply to you, and you are registered where required.
- You are comfortable depositing TDS on salary on time and filing the quarterly returns.
- You have the time each month to run the cycle and meet every deadline.
Payroll software can automate the calculations and payslips. What software does not do is take responsibility for whether you applied the right rules or met every statutory deadline. You own that.
03When CA-assisted payroll is worth it
Assisted payroll earns its fee as the team and the compliance grow. It makes sense when:
- You are unsure which statutory obligations apply, or you operate across more than one state.
- Your headcount has crossed, or is near, the thresholds for PF or ESI.
- You want TDS on salary deposited and the quarterly returns filed correctly, with Form 16 issued cleanly.
- You would rather a professional own the deadlines than carry the penalty risk yourself.
- You are short on time and a missed deposit or late return would cost more than the service fee.
The risk in payroll is rarely the salary. It is a missed PF filing, a late TDS deposit, or applying a rule that did not apply to you.
Payroll often sits alongside other tax tasks; for the broader trade-off, see online CA versus doing it yourself.
04The criteria that matter
If you pay for help, judge services on checkable things.
| What to check | Why it matters | Good sign |
|---|---|---|
| Who runs compliance | Statutory rules need expertise | A verified CA or payroll professional, not only software |
| Price transparency | Avoids surprise fees | A fixed, published price per month or per employee |
| Coverage | All obligations, not just payslips | PF, ESI, TDS on salary and professional tax handled together |
| Review step | Catches errors before filing | A separate reviewer checks the filings |
05The main options, described fairly
Payroll help in India splits between software and done-for-you services.
- Zoho Payroll is capable software that automates pay runs and statutory calculations, for teams that want to run it themselves.
- IndiaFilings and Vakilsearch offer payroll and compliance as managed services within a broad menu.
- ClearTax provides payroll and TDS tooling alongside its tax platform.
All are legitimate. The differences that matter are the four criteria above, especially whether a professional owns the statutory compliance or you do.
06How Claw Tax helps
Claw Tax and Accounts is an online tax, GST and accounting service for India that connects you with a verified chartered accountant at a fixed, published price, with a Claw reviewer checking every filing before it is submitted.
For payroll, that structure puts the statutory compliance on a professional rather than on you. With Claw Tax and Accounts, a verified chartered accountant runs the pay cycle and handles PF, ESI, TDS on salary and professional tax at a fixed published price, a Claw reviewer checks the filings before they go in, and you get reminders before each deposit and return deadline. Because the same team can also handle your TDS returns and income tax work, the salary data flows through consistently.
If you have a very small team and you are confident about which rules apply, good payroll software may be all you need. Use an assisted service when the compliance, the headcount or the deadline risk make professional ownership worth it. This is general information, not tax advice.
07Frequently asked questions
Can I run payroll myself in India?
Yes, for a small team with a simple structure. Payroll software can automate the calculations and payslips. The harder part is statutory compliance: PF, ESI, TDS on salary and professional tax, each with its own portal and deadline. DIY works if you understand which apply to you and can meet every deadline; otherwise a service reduces the risk.
What statutory obligations come with payroll?
Depending on headcount, wages and state, payroll can involve provident fund on the EPFO portal, ESI on the ESIC portal, TDS on salary under section 192 (deposited monthly and reported quarterly, with Form 16 to employees), and professional tax in states that levy it. Applicability depends on your specific situation, so confirm it before assuming.
When should I use a CA-assisted payroll service?
When you are unsure which obligations apply, when you operate across states, when your headcount is near PF or ESI thresholds, or when you want a professional to own the deadlines rather than carry the penalty risk yourself. It is also worth it when you are short on time and a missed deposit would cost more than the fee.
Is payroll software enough on its own?
Software is excellent for automating calculations and payslips, but it does not take responsibility for whether you applied the right rules or met every statutory deadline. For a small, simple team that can be enough. As complexity grows, a service that owns the compliance and reviews the filings reduces more risk.
What does assisted payroll cost?
It varies by provider and is usually priced per month or per employee. Some are quote-based. Claw Tax publishes fixed prices for its services; confirm the current payroll price for your team size. Always check the published price before committing, as plans change.
What happens if I miss a PF or TDS deadline?
Late PF or ESI deposits and late TDS deposits or returns can attract interest and penalties, and late TDS can also affect the deduction for the business. Because the amounts and consequences add up, the value of assisted payroll is largely in never missing these deadlines, which is why reminders and a review step matter.