Payroll Software Small Business India — PF ESI Compliance 2026

Payroll Software Small Business India — PF ESI Compliance 2026

India has 63 million small businesses employing over 110 million workers. Most of these businesses have no dedicated HR team — the owner or a general accountant manages payroll alongside other responsibilities. The result: payroll is processed in Excel, PF contributions are filed late, ESI deductions are incorrect, and employees receive wrong salary amounts.

MICS payroll software is designed specifically for small Indian businesses: simple to use, comprehensive on compliance, and affordable.

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Small Business Payroll Challenges in India

PF Compliance
Any establishment with 20+ employees is mandatorily covered under EPFO. Monthly PF contribution (12% employer + 12% employee) must be filed by the 15th of every month. Late filing attracts interest at 12% per annum and damages. Small businesses regularly miss deadlines or compute contributions incorrectly.

ESI Compliance
Establishments with 10+ employees (in certain states, 20+) where any employee earns up to Rs. 21,000/month are covered under ESIC. Monthly ESI contribution (3.25% employer + 0.75% employee) filed by 15th. ESI coverage entitles employees to free medical treatment — non-compliance is both a legal and welfare issue.

Professional Tax
Slab-based monthly deduction that varies by state. Maharashtra, Karnataka, West Bengal, and several other states levy PT. Many small businesses apply incorrect slabs or fail to deduct entirely.

TDS on Salary
Employees earning above the basic exemption limit are subject to TDS. Monthly TDS deduction, quarterly 24Q filing, and Form 16 issuance at year end are mandatory. Small businesses often skip this until a demand notice arrives.

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MICS Payroll Software — What It Does

Employee Setup
- Employee master: name, designation, department, joining date, PAN, Aadhaar, bank account
- Salary structure: configurable components — Basic, HRA, Special Allowance, LTA, Medical, Conveyance
- PF applicability flag: include or exclude based on employee category
- ESI eligibility: automatic based on gross salary

Monthly Payroll Processing — 4 Steps
1. Mark attendance (or import from biometric device)
2. Enter variable pay (incentive, bonus) if applicable
3. Review payroll summary — check once
4. Approve and generate salary slips + payment file

Total time: under 30 minutes for a 50-person payroll.

PF Computation and ECR
- Employer and employee PF: 12% of Basic + DA each
- EPS (Pension): 8.33% of Basic subject to Rs. 15,000 ceiling
- EDLI: 0.5% employer contribution
- Admin charges: PF admin (0.5%) and EDLI admin (nil)
- ECR (Electronic Challan cum Return): EPFO-format file ready for upload to EPFO unified portal
- Challan amount computed automatically

ESI Computation
- Employee contribution: 0.75% of gross salary
- Employer contribution: 3.25% of gross salary
- ESI challan: ready for ESIC portal submission
- ESI return: half-yearly return (Form 5) data prepared
- Newly covered employees: IP number registration workflow

Professional Tax
- State-specific PT slab configured at setup
- Monthly PT deduction computed per employee
- PT challan for respective state portal
- PT registration and enrolment support

TDS on Salary
- Annual tax computation for each employee (considering declared investments)
- Monthly TDS deduction from salary
- Form 12BB: employee investment declaration collection
- 24Q quarterly return preparation
- Form 16 generation at year end: Part A (TDS data) and Part B (salary details)

Salary Slips
- Professional salary slip with company logo
- All earnings and deductions clearly shown
- Net payable amount and bank credit date
- Digital distribution via email or WhatsApp

Payment
- Bank transfer file: ICICI, HDFC, SBI, Axis, Kotak formats supported
- Cash payment list if cash wages apply

Leave Integration
- Leave balance fed into payroll for LOP (Loss of Pay) deduction
- Payroll and leave in the same system — no reconciliation needed

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What You Don't Need

- No HR team needed to operate this software
- No accountant for PF/ESI computation — software handles it
- No Excel — everything inside the system

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Pricing

| Employee Count | Monthly Cost |
|---|---|
| Up to 10 employees | Free forever |
| 11-25 employees | Rs. 3,000 |
| 26-50 employees | Rs. 5,000 |
| 51-100 employees | Rs. 8,000 |
| 100+ employees | Rs. 12,000 |

First month free. No setup fee. No long-term contract.

Get started: +91 9355273535 | admin@mics.asia