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Employer payroll obligations: every question, answered

PF, ESI, professional tax, TDS, Form 16, gratuity and payroll compliance dates.

Last updated 2026-06-12 · Covers FY 2025-26 and FY 2026-27

Plain-language answers, reviewed for publication.

Each question has a shareable anchor, a verdict-first answer, and links into the calculators, calendar, glossary or sibling guide pages where relevant.

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  1. A · TDS and Form 16
  2. B · PF and ESI
  3. C · Professional tax and state rules
  4. D · Benefits and exits

A · TDS and Form 16

1When must an employer deduct salary TDS?

Employers must estimate salary income, deduct TDS where applicable and issue Form 16 after year-end. TDS deducted but not deposited creates serious employee-credit and employer-default issues.

2When is Form 16 issued?

Employers must estimate salary income, deduct TDS where applicable and issue Form 16 after year-end. TDS deducted but not deposited creates serious employee-credit and employer-default issues.

3What if salary TDS was deducted but not deposited?

Employers must estimate salary income, deduct TDS where applicable and issue Form 16 after year-end. TDS deducted but not deposited creates serious employee-credit and employer-default issues.

B · PF and ESI

4When does PF registration become mandatory?

PF applicability depends on employee count, wage levels and establishment coverage. Opt-out is limited and documentation-sensitive; do not treat it as a free employee choice in every case.

5When does ESI apply to employees?

ESI applies when the establishment and employee wage conditions are met. Once covered, monthly contribution and return duties follow.

6Can an employee opt out of PF?

PF applicability depends on employee count, wage levels and establishment coverage. Opt-out is limited and documentation-sensitive; do not treat it as a free employee choice in every case.

C · Professional tax and state rules

7Does Telangana professional tax apply to employees?

Professional tax is state-specific and can apply through the employer payroll. Telangana rules, slabs, registration and payment dates should be checked for the payroll month.

8Who pays professional tax — employer or employee?

Professional tax is state-specific and can apply through the employer payroll. Telangana rules, slabs, registration and payment dates should be checked for the payroll month.

9What are the monthly payroll due dates?

First-employee hiring creates recurring compliance. Payroll records, salary structure, TDS, payslips, leave/exit records and state registrations should be set up before the first cycle.

D · Benefits and exits

10When does gratuity become payable?

Gratuity generally becomes payable after qualifying continuous service, subject to the Payment of Gratuity Act rules. Payroll should track joining date, breaks and last drawn wages.

11What payroll records should an employer keep?

First-employee hiring creates recurring compliance. Payroll records, salary structure, TDS, payslips, leave/exit records and state registrations should be set up before the first cycle.

12What happens when a startup hires its first employee?

First-employee hiring creates recurring compliance. Payroll records, salary structure, TDS, payslips, leave/exit records and state registrations should be set up before the first cycle.

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This guide is general information for understanding the topic, not advice on your specific situation, and not solicitation of work. Tax positions turn on your full facts and on the law in force for the relevant year. Confirm your position with a qualified professional before acting.