Payroll Software Features Checklist for Indian Businesses
Test payroll software on your own data. Look for PF with ECR export, ESI, professional tax and LWF for each state, TDS under both regimes with Form 24Q and Form 16 data, flexible salary formulas, arrears, full and final settlement, attendance integration, a mobile app, audit trails and maker-checker release. Ask how rate changes get updated.
A payroll tool is only as good as its fit with your pay rules and compliance needs. Use this list during demos, and ask the vendor to show each item with your own data, not a prepared sample.
Compliance and statutory
- ✓PF with ECR file export, including the ceiling options.
- ✓ESI computation and contribution statement.
- ✓Professional tax and labour welfare fund for every state you operate in.
- ✓TDS on salary with old and new regime, Form 138 (Form 24Q) data and Form 130 (Form 16).
- ✓Gratuity, bonus and leave encashment calculations.
- ✓Automatic updates when laws and rates change.
Salary and pay rules
- ✓Flexible salary structures with formula-based components.
- ✓Arrears, revisions with effective dates and back-dated changes.
- ✓Loans, advances and reimbursements.
- ✓Full and final settlement.
- ✓Off-cycle and supplementary payroll runs.
Attendance and leave integration
- ✓Direct feed from biometric, mobile or web attendance.
- ✓Leave balances and loss-of-pay calculation without re-entry.
- ✓Overtime and shift allowance rules.
Employee experience
- ✓A mobile app with payslips, tax declaration and proof upload.
- ✓Reimbursement claims with receipt capture.
- ✓Self-service for bank detail changes with approval.
Controls and security
- ✓Role-based access and approval workflows.
- ✓Audit trail of changes to salary and bank data.
- ✓Data encryption, backups and clear data ownership.
- ✓Maker-checker for payroll release.
Reports and integration
- ✓Standard and custom reports, including variance and cost analysis.
- ✓Journal export to accounting software.
- ✓Bank file formats for your bank.
- ✓APIs for HRMS, ATS and expense tools.
Vendor questions
- ✓How is pricing set: per employee, per module or flat?
- ✓What does implementation include, and how long does it take?
- ✓Is support available in your working hours and language?
- ✓Can you try a pilot payroll run in parallel before going live?
Judge payroll software on the day it handles your hardest case, not your easiest.
Score each vendor against this list and weight the items by what hurts most in your business today.
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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