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Payroll · checked 11 November 2026
Keep basic at least half of pay, deduct PF, professional tax and TDS each month, and pay gratuity at 15 days' wages per year of service.
Gratuity is last drawn basic plus DA x 15 x years / 26, due after five years of continuous service, or one year for a fixed-term employee, capped at Rs 20 lakh. Work in-hand pay down from CTC: employer and employee each put 12% of basic into PF, gratuity is provisioned at 4.81% of basic, and professional tax is at most Rs 2,500 a year. A spreadsheet and a CA work for a handful of people; past that, Zoho Payroll is free for up to 10 employees.
The steps 4 answers
- How is gratuity calculated in India, and when must an employer pay it? Starting Up
- How do I calculate CTC and in-hand salary when I hire in India? Starting Up
- How do I run payroll for a small team in India? Starting Up
- What do the new labour codes mean for my warehouse, packing and delivery staff? D2C
Tools that do it for you
- Zoho PayrollFree while you have up to 10 employees
- RazorpayX PayrollSalaries plus PF, ESI, PT and TDS filings, up to 20 people
The readingMost used across these answers
- Government Makes the Four Labour Codes Effective Read
- EPFO FAQs: Revision of the Statutory Wage Ceiling to ₹25,000 Read
- Payroll Compliance: PF, ESI, PT and TDS Explained Read · 2 answers
- Labour Codes 2025: A Practical Guide for HR Leaders Read · 2 answers
- Earning Rs 6 lakh a year? Your in-hand salary after the new labour codes Read · 2 answers
- Labour Laws in India for Private Companies Read
- Labour codes 2025: how the 50% wage rule resets salaries, tax and retirement savings Read
- In-hand salary calculation: how much you take home on Rs 5 lakh to Rs 20 lakh CTC under the new rules Read
- Income tax slabs and rates for FY 2026-27 (AY 2027-28) Read
- New Labour Laws 2025: Complete FAQ for Employers & Employees Read
The terms
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