How Does the Payroll Calendar in India Work?

Running payroll in India is much more than a one-day event; it’s a continuous cycle of gathering data, validating inputs, ensuring disbursals, and meeting compliance deadlines. If you’re expanding your team in India, staying updated with the HR compliance calendar in India, especially HR compliance calendar 2025, is an absolute mandate. And for that, you need more than just due dates. You need context, precision, and process clarity.

So, in this blog, let’s break it all down, date by date, with full explanations for every payroll element. We’ll show how your human resources compliance calendar becomes a reliable tool instead of just a checkbox list.

Pre-Salary Process in the Payroll Calendar 

This process takes place from the 1st to the 23rd of every month. So, before salaries are processed, typically after the 25th, there’s a range of tasks that HR, finance, and compliance teams must complete. Let’s look at each one in detail and show you where to mark it on your human resources calendar.

Employee Lifecycle Changes

New Joinees

In this process, the newly onboarded employees must be added to the payroll database. The details needed from the employees for this process are PAN, Aadhaar, bank account details, email, offer letter, and date of joining (DOJ). 

Any missing data typically means delayed salary credit and taxes. There’s no specific date to capture all new joiners for the month. However, the process can get much smoother if you set a recurring task date for every month.

Exits / Full and Final Settlement (FnF)

Employees who resign or are terminated must undergo a settlement. So, this process includes notice pay, leave encashment, bonus dues, gratuity, and recoverables. Most companies do have an FNF timeline, and it’s typically processed in 45 days.

However, the input begins before the payroll freeze. Again, it’s important to have a specific date for each month to confirm resignations and begin FnF planning. This can avoid missing out on any detail at the last moment.

Performance-Based Inputs

This comprises multiple elements. Let’s talk about them one by one. 

Bonuses (Annual, Quarterly, Retention)

Bonuses are applicable for performance cycles or as part of retention agreements. Employees are usually rewarded quarterly, which is Q1 (April), Q2 (July), Q3 (October), and Q4 (January). Bonus payments are decided after the input lists are shared by department heads and validated by HR. You can add reminders around a particular date of bonus months to coordinate with managers.  

Commissions (Sales Targets, Performance Slabs)

Sales-based earnings are calculated against monthly or quarterly quotas. The factors that decide the commissions are: variables and inputs. The elements calculated under variables are targets achieved, slab-based earnings, and clawbacks. Now, the elements calculated under inputs are CRM integration or manual confirmation from sales heads. Add a date each month to validate commission reports.  

Incentives (Performance Incentives, Spot Awards)

It means ad-hoc or milestone-based rewards for exceptional work. Different types of incentives include a project completion bonus, a best performer award, etc. The inputs are usually submitted via HRBP or direct manager nomination. It’s better to keep a rolling log of spot awards to finalize before payroll freezes.

Learn in detail about payroll services in India 

Reimbursements & Allowances

Travel & Local Conveyance

This comprises employee-submitted claims for business travel, cabs, or fuel. The claims are validated with travel desk, receipts, or supervisor approvals. Some claims can go even tax-free if documented properly. Ideally, claims should be closed before the 25th of each month. 

Internet, Mobile & Gym Allowance

This is mainly useful for remote employees. WFH policies often include fixed or claim-based reimbursements. The frequency for this kind of allowance is monthly or quarterly. These are tax-exempt up to certain limits and require proper documentation. 

Night Shift & On-Call Allowances

These types of allowances are paid for working outside regular business hours. The calculation is done based on logs from IT/ops teams or swipe data. The frequency depends on the shift roster, but usually it’s a monthly payout process. Gathering the data on a regular basis doesn’t pile things up at the end. 

Leave and Attendance Adjustments

LOP (Loss of Pay)

These are deductions for excess or unapproved leaves. Inputs are taken from leave management systems or manual logs. The calculation is done pro rata based on per-day CTC. However, if it’s submitted after the 25th, it’s added to the next month’s payroll.

Leave Adjustments & Encashments

These inputs are applied when employees opt for leave encashment or adjustments between leave types. Encashment is often done at year-end or during exit, whereas adjustments are the paid leaves swapped with unpaid or sick leaves. 

Salary Structure Changes

Promotions & Salary Revisions

This is applicable when an employee receives a grade or band promotion. The updates needed are revised CTC, new allowances, and role-based pay. Also, these updates must reflect from the start of the month if declared. Confirm HR approvals and update payroll software to ensure timely input. 

Calculate an employees salary all by yourself through our salary calculator.  

Know key things about the salary structure in India

Health Insurance Premiums

Employee Health Insurance Deductions

This symbolizes the monthly deduction of employee contributions for group insurance. Employers often co-contribute in this, and the employee portion is deducted from the salary. The plans covered under this premium are medical, life, accidental, and dependent coverage. You need to confirm the premium list with the insurer beforehand for timely submissions. 

An important point to be noted is that all payroll data must be locked and validated by the 23rd to begin processing on the 25th of every month. Here, I would suggest that you add a payroll deadline reminder to your HR compliance calendar 2025. Because, as mentioned earlier, inputs past this point may not be included in the current month’s payroll.

Salary Disbursal in the Payroll Calendar

Once inputs are frozen, salary processing starts. Each day in this window plays a role. 

Payslip creation

On the 25th of every month, the payroll execution begins where the payroll team runs the system using finalized inputs. Additionally, they draft payslips, and summary reports are generated.

Learn how to pay employees in India. 

Bank file generation

On the 26th, the salary validation process starts where HR, finance, and management verify reports. They check against budgets, compliance rules, and employee expectations.

On the 27th, the payroll is locked, and final approval comes. Then, bank files are prepared for upload. 

Employee payout confirmation

Then from the 28th to the 31st, the salary disbursal process starts. In this process, the funds are transferred via bulk NEFT/RTGS to employee accounts. Additionally, the payslips are released via employee portal or email.

This is how a typical human resources calendar in India looks like. However, the process doesn’t just end here. An entire list of events awaits for the payroll team post salary disbursal and that’s what we’re going to discuss in our next block. Read how an EOR manages payroll services in India

Post-Salary Process in the HR Compliance Calendar

This usually continues from the 1st to the 20th of the next month. Once salaries have been credited, companies enter the most sensitive part of the payroll lifecycle: statutory compliance.

Missing even one deadline for these legal obligations can lead to financial penalties, interest charges, criminal proceedings, or even a suspension of your business operations in India.

That’s why an HR compliance calendar is a must. Let’s now explore each post-salary compliance activity in depth.

Statutory Deductions

PF (Provident Fund)

PF is a retirement savings scheme. Both employer and employee contribute 12% of Basic + DA (Dearness Allowance) to the fund monthly.

The deadline for this process is the 15th of the following month. It’s mandated by EPFO (Employees’ Provident Fund Organisation) and applies to all employees earning a basic wage under ₹15,000/month (though many companies cover all employees).

The monthly process for this deduction is as follows:

• • Calculate 12% of Basic + DA for each employee.
  • Deduct employee’s share from salary.
  • Combine it with the employer’s share.
  • Generate and upload the ECR (Electronic Challan cum Return) file via the EPFO portal.
  • Pay using the payment link generated.

According to human resources calendar, you should:

• • Set 12th of every month as ECR validation day.
  • Block 14th for payment approval.
  • 15th is the final cut-off.

Penalties for Delay:

• • 12% annual interest (simple)
  • 5–25% damages on delayed contributions
  • Legal liability under Section 14B of EPF Act

Always use a structured human resources compliance calendar system with notifications over manual reminders.

ESI (Employees’ State Insurance)

ESI is a social security scheme covering medical, disability, and maternity benefits. Here, the employee contributes 0.75% and the employer contributes 3.25%.

The deadline for this process is 15th of the following month and is mandated by ESIC (Employees’ State Insurance Corporation). It applies to any employee earning ₹21,000 or less per month.

The monthly process for this is:

• • Identify ESI-eligible employees based on salary thresholds.
  • Calculate both shares.
  • Upload payment details on the ESIC portal.
  • Generate and pay challan.

According to HR Compliance Calendar, you should:

• • Generate contribution summary on the 13th
  • Upload to ESIC portal on the 14th
  • Submit payment on the 15th

Penalties for Delay:

• • 12% annual interest
  • Additional damages up to 25% of the amount due
  • Suspension of benefits to employees

Another important thing to note is that ESI payments are state-auditable. So, keep digital and hard copies of challans and payment records.

TDS (Tax Deducted at Source)

TDS is the monthly income tax deduction made from employees’ salaries based on their projected annual taxable income. The employer acts as a tax collector on behalf of the government.

The deadline for this is 7th of the following month. It’s mandated by the Income Tax Department, Govt. of India and applies to every employee whose annual income exceeds the tax threshold.

The monthly process for this goes as follows:

• • Calculate projected taxable income (salary + bonuses + prerequisites – deductions).
  • Apply appropriate tax slab.
  • Deduct TDS from employee salary during payroll.
  • Deposit the deducted amount with the Income Tax Department.
  • File e-challan and acknowledge the payment.

According to HR Compliance Calendar you should:

• • Add recurring tasks on 5th to prepare the challan.
  • Final deposit must happen by the 7th without fail.

Penalties for Delay in HR compliance calendar 2025:

• • ₹200/day until return is filed
  • 1.5% monthly interest on outstanding tax
  • Prosecution under Section 276B for repeated non-compliance

PT (Professional Tax)

Professional Tax is a state-specific tax on salaried individuals. The rate and structure vary based on employee income slabs and the state in which they work.

The deadline for this deduction is between the 10th–20th of the following month (also varies by state). It’s mandated by the state governments.

The monthly process is as follows:

• • Check the applicable slab for each employee (for example, ₹200/month in Maharashtra for salaries above ₹10,000).
  • Deduct the amount from payroll.
  • File challans on the respective State Government portals.
  • Upload employee-wise data where applicable.

Penalties for Delay in human resources compliance calendar:

• • Late fees (₹300–₹1000/month)
  • Interest ranging from 1%–1.5% per month
  • Possible disqualification from state government contracts

Many companies forget to update PT when employees transfer states. Always reflect this on your hr compliance calendar 2025 without a fail.

Form 16, 24Q preparation 

Form 16 is an annual salary certificate issued to every employee summarizing factors like total salary paid, tax deducted and deposited, declarations made and considered, employer TAN and verification, etc. The deadline for this on human resources calendar was on 15th June for FY 2024–25.     

A Form 24Q is a quarterly TDS return and it includes all TDS deductions made per PAN, salary breakup, income declarations, tax adjustments, rebates, and surcharges.

The deadlines goes as follows:

• • Q1 (April–June): 31st July
  • Q2 (July–September): 15th October
  • Q3 (October–December): 15th January
  • Q4 (January–March): 15th May

In the next section, we’ll recap all the compliance risks.

Penalties for Non-Compliance in the Payroll Calendar

 

Why Use EOR to Maintain a Proper Payroll Calendar in India?

Managing payroll in-house is time-consuming and it’s nonstop. HR and finance teams spend the entire month tracking deadlines, handling tax deductions, and chasing compliance. Not to mention when it’s an international HR Compliance Calendar, the chaos multiplies. However, there’s a way out for this headache and minimize costs at the same time. How? Partner with an employer of record (EOR). Yes, it’s that’s simple! 

The EOR takes over your human resources compliance calendar and maintains it properly.  It handles salary processing, payslips, and statutory deductions on your behalf. It also files TDS, EPF, ESI, and other returns on time. An EOR keeps you aligned with the HR compliance calendar 2025 while managing full-time, part-time, and contract staff compliance.  

Learn about the best payroll outsourcing companies in India

What’s your contribution in the process?

• • Share basic employee inputs
  • Review payroll summary (optional)
  • Make a single invoice payment

That’s it.

Conclusion

We’ll wrap this up with a very short and simple message. HR compliance calendar 2025 or HR compliance calendar in general is a massive responsibility in India. If you’re are foreign business expanding in India, your day can get stuck in payroll processing loop any day of the month. 

And when you have a new international team to focus, you cannot afford to waste your time redoing admin work. So, make your job easy by simply collaborating with an EOR and leaving the rest of the process to them. 

Checking on the dates, making accurate calculations, preparing the right documents, and all the other complex things we talked about in the blog is their field of expertise. So, let them handle that and you handle what you are an expert in. Building a business in a foreign land.