Sleet

India Payroll Compliance Changes in 2026: A Dated List

Nihit Dobariya
Compliance
7 min read
Quick answer

Since October 2025 India's payroll rules changed in a dozen places: the four labour codes (21 November 2025), the Income-tax Act 2025 (1 April 2026), the EPF Scheme 2026 (29 June), and the PF wage ceiling raised to ₹25,000 (17 September). The ESI ceiling, gratuity cap and TDS dates did not change.

Accountant working through salary figures with a calculator

A lot has changed in Indian payroll since late 2025. This is the list in date order, with the source for each item and a short note on what to do. At the end, there is a list of things that did not change, which is as useful as the changes.

Key points covered in this guide: The timeline, The items that matter most, What did not change, How to keep up

The timeline

DateWhat happenedWhat to do
22 Sep 2025GST rates simplified to mainly 5 percent and 18 percent, with 40 percent for a few goodsCheck HSN and rate in your billing master
13 Oct 2025EPFO's board simplifies partial withdrawals into three categoriesUpdate your exit and FAQ material
21 Nov 2025The four labour codes come into forceReview wage definition, gratuity and exit timelines
1 Jan 2026Haryana's Labour Welfare Fund cap rises to ₹35 a month, with the employer paying twice thatUpdate Haryana LWF deductions
7 Jan 2026Karnataka's Labour Welfare Fund threshold falls to 10 employeesCheck whether your Karnataka site is now covered
2 Mar 2026EPF interest of 8.25 percent for 2025-26 approved, later ratifiedTell employees the rate
1 Apr 2026Income-tax Act, 2025 and the 2026 Rules apply; Section 392, Form 130 and Form 138 replace the old namesUpdate TDS software and templates
21 Apr 2026Odisha repeals professional tax, effective 1 April 2026Stop the deduction and do not remit
8 May 2026Central Rules under the labour codes notified, including the Code on Wages and Social Security RulesRead the rules, and watch your state's rules
29 Jun 2026Employees' Provident Funds Scheme, 2026 notified (G.S.R. 525(E))Update withdrawal guidance for leavers
7 Aug 2026West Bengal notifies a new professional tax schedulePlan for October
25 Aug 2026Notifications fix the statutory bonus ceilings under the Code on WagesKeep the ₹21,000 and ₹7,000 limits in the bonus calculation
17 Sep 2026EPF wage ceiling rises from ₹15,000 to ₹25,000Follow the September split and enrol the newly covered
1 Oct 2026West Bengal's new professional tax slabs applyUpdate the slab from the October salary
Accountant working through salary figures with a calculator
Payroll is a monthly discipline: small errors in one component repeat in every payslip.

The items that matter most

PF ceiling. The largest one for cost. See the full explainer.

Labour codes. The wage definition (at least half of pay counts as wages), gratuity for fixed-term employees after one year and a two working day rule for final settlement all matter for payroll. The Central Rules were notified on 8 May 2026, and states continue to issue their own. See the labour codes explainer.

Tax names. Nothing in your tax calculation changed, but every form name did. See Income-tax Act 2025 for payroll.

Withdrawals. The 12-month wait changes what you say to people who leave. See EPF withdrawal rules 2026.

State changes. Professional tax and Labour Welfare Fund move at state level. Odisha repealed professional tax, West Bengal reset its slabs (details), and Karnataka and Assam changed theirs in April 2025. See the state-by-state list.

What did not change

  • ✓PF rates. Employee and employer still pay 12 percent, with 8.33 percent of the employer share going to EPS.
  • ✓ESI. The wage ceiling is still ₹21,000 a month, with 0.75 percent from the employee and 3.25 percent from the employer. A proposal to raise the ceiling is with ESIC and has not been notified.
  • ✓Gratuity. The formula is unchanged, and the ₹20 lakh cap continues under the Code on Social Security.
  • ✓Bonus limits. The ₹21,000 eligibility ceiling and the ₹7,000 calculation ceiling are the same, with the minimum bonus at 8.33 percent and the maximum at 20 percent.
  • ✓TDS dates. Deposit by the 7th, and quarterly returns on 31 July, 31 October, 31 January and 31 May.
  • ✓GST composition limits. ₹1.5 crore for goods, ₹75 lakh in special category states and ₹50 lakh for services. The e-invoicing threshold is still ₹5 crore.
  • ✓GSTR-3B. Still due on the 20th.
Young woman reading on a laptop while researching payroll compliance questions
Payroll is a monthly discipline: small errors in one component repeat in every payslip.

How to keep up

  1. Put one person in charge of compliance changes, and give them a monthly review slot.
  2. Keep a change log with the date, the source and what you changed in payroll.
  3. Run a sample payroll after every change, and compare it with a manual calculation.
  4. Subscribe to official sources: the Ministry of Labour, EPFO, ESIC, CBDT and your state tax and labour departments.

Sources

This list is a summary. It is not legal advice, and details can change by notification.

Nihit Dobariya

Written by

HR Manager, Airwix Technologies (Sleet)

Nihit Dobariya is the HR Manager at Airwix Technologies in Ahmedabad, where he runs HR and payroll for the team behind Sleet. He writes about payroll, PF and ESIC, professional tax, the labour codes and everyday HR practice for Indian employers, and checks each rule against the official notification before it is published.

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