Why Indian payroll is harder than “salary ÷ 12”
Payroll in India is not a single calculation. Every pay cycle must account for Provident Fund (PF) employee and employer contributions, Employee State Insurance (ESI) where applicable, Professional Tax by state, income tax (TDS) under the chosen regime, reimbursements, loss-of-pay adjustments, and company-specific allowances. Founders and HR teams at 20–500 employee companies often start in Excel; as headcount grows, formula errors, version conflicts, and missed statutory deadlines become expensive.
OpenHR payroll software is built around Indian compliance first—not as an add-on to a global template. Salary structures, earning and deduction heads, and statutory mappings are configured once per entity and location. When you run payroll, the system applies the same rules every month, surfaces exceptions before money moves, and keeps an audit trail HR and finance can defend during inspections or investor diligence.
Statutory compliance built into every run
PF compliance requires correct wage ceilings, voluntary PF flags, and establishment codes. ESI applies only when average wages fall under the statutory threshold—getting this wrong affects both employee take-home and employer liability. TDS payroll must reflect declarations, regime choice (old vs new), and mid-year revisions without re-keying data.
OpenHR automates these calculations from your master data: employee category, work location, salary components tagged as PF/ESI/TDS eligible, and join/exit dates for pro-rata. Compliance alerts flag missing PAN, incomplete bank details, or employees crossing ESI limits before you lock the run. Reports export in formats your CA or payroll partner expects, reducing back-and-forth at month-end.
From inputs to payslips in one controlled workflow
A typical month follows a clear path: import or sync attendance and leave balances, apply incentives or ad-hoc deductions, run a preview with variance vs last month, route for approval, then release payslips to the employee self-service portal. Managers do not need access to full salary data; HR controls permissions.
Digital payslips and Form 16 workflows mean employees download documents on mobile without emailing HR. Multi-location payroll supports different state Professional Tax rules and branch-wise registers while rolling up to a single group view for leadership. When you also use OpenHR for attendance and leave, LOP and paid days flow into payroll automatically—no duplicate entry.
Who gets the most value from OpenHR Payroll
Fast-growing startups moving off spreadsheets before their first statutory notice. SMEs with one HR generalist running payroll, hiring, and employee queries who need one system instead of five tabs. Companies with hybrid or multi-city teams that need location-aware tax and consistent payslip branding.
If you are evaluating payroll software India vendors, compare how each handles PF compliance, ESIC edge cases, and TDS payroll revisions—not just UI polish. OpenHR connects payroll to ATS, attendance, and leave so people data stays consistent as you scale from 30 to 300 employees.