Malad West, Mumbai 400064
Consultation +91 97731 50167

Payroll Outsourcing in Mumbai
New Labour Code 25

Managing monthly payroll involves more than calculating employee salaries. Businesses must maintain accurate employee records, process attendance and leave data, calculate statutory deductions, prepare payslips and ensure that applicable payroll compliances are completed within the prescribed timelines.

Kaizen Consultancy Services provides third-party payroll services in Mumbai to help businesses manage their monthly payroll activities in an organised and efficient manner.

Our payroll outsourcing support includes salary processing, payroll calculations, employee data management, payslip preparation, PF and ESIC-related payroll support, Professional Tax, Labour Welfare Fund and payroll reports, depending on the agreed scope of services.

Whether you operate a small business, a growing company or an established organisation, outsourcing payroll administration can reduce the workload of your internal HR and accounts teams.

Looking for a Third party payroll company in Mumbai? Connect with Kaizen Consultancy Services to discuss your employee strength, payroll requirements and statutory compliance needs.

Third party Payroll Company in Mumbai

What is Third-Party Payroll Processing?

Third-party payroll processing is a service in which a business appoints an external payroll service provider to manage agreed payroll activities on its behalf.

Instead of handling every salary calculation and payroll report internally, the company shares the required employee information, attendance details and monthly salary inputs with the payroll service provider.

The payroll team processes the information and prepares the required salary statements, payslips, deduction calculations and payroll reports for review and approval.

A third-party payroll company may help with:

  • Monthly salary calculations and payroll processing.
  • Employee salary structures and CTC calculations.
  • Attendance, leave and overtime adjustments.
  • PF and ESIC calculations and related compliance support.
  • Professional Tax and Labour Welfare Fund calculations, where applicable.
  • Payslip preparation and payroll reports.
  • Employee joining, exit and full and final settlement calculations.

Important: Payroll processing outsourcing and contract staffing are two different arrangements. In a payroll-processing arrangement, employees generally remain on the client's employment records and the service provider manages agreed administrative activities. Outsourcing payroll processing by itself does not automatically transfer the employer's statutory responsibilities to the service provider.

Our Third-Party Payroll Services in Mumbai

Kaizen Consultancy Services offers payroll outsourcing support according to the requirements of the business, its employee strength and applicable statutory provisions.

01

Monthly Payroll Processing

Monthly payroll processing involves collecting and checking employee salary inputs before calculating the final payable salary.

Our payroll processing activities can include:

  • Monthly attendance and leave calculations.
  • Paid leave and unpaid leave adjustments.
  • Basic salary and allowance calculations.
  • Incentives, overtime and arrears.
  • Employee deductions and statutory contributions.
  • Gross salary and net salary calculations.
  • Monthly payroll summaries.

Accurate monthly payroll processing helps businesses maintain consistency in salary payments and employee records.

02

Salary Structure and CTC Management

An employee's Cost to Company (CTC) may include basic salary, allowances, incentives, employer contributions and other benefits.

A payroll service provider helps organise salary components and calculate the applicable employee and employer contributions.

Our payroll support can include:

  • Salary component calculations.
  • Basic salary and allowance structure.
  • Gross salary and net salary calculations.
  • Employer and employee statutory contributions.
  • Monthly and annual salary statements.
  • Payroll adjustments arising from salary revisions.

Salary structures should be reviewed with reference to the current definition of wages under the applicable Labour Codes.

03

PF Payroll Processing and Compliance Support

Provident Fund is an important part of employee social security and payroll administration.

PF-related payroll support can include:

  • Employee PF eligibility information.
  • PF contribution calculations.
  • Employer and employee contribution statements.
  • Monthly PF data and ECR preparation.
  • New employee PF details and employee master records.
  • PF reconciliation and payroll coordination.
  • Support for applicable PF return and compliance activities.

PF Update: The revised EPF wage ceiling effective from 17 September 2026 makes it important for employers to review employee eligibility and contribution calculations.

04

ESIC Payroll Processing and Compliance Support

ESIC provides social security and medical benefits to eligible employees under the applicable provisions.

Payroll-related ESIC support can include:

  • Checking employee ESIC eligibility.
  • ESIC contribution calculations.
  • Employer and employee contribution records.
  • Employee information and insurance details.
  • Monthly ESIC payroll reconciliation.
  • ESIC-related payroll reports and compliance coordination.

Employee eligibility should be checked using the applicable wage definition and notified coverage limit.

05

Maharashtra Professional Tax Compliance

Professional Tax is a state-level payroll deduction applicable to eligible employees under the Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975.

Payroll administration may include:

  • Checking applicable employee Professional Tax deductions.
  • Monthly deduction calculations.
  • Professional Tax payroll statements.
  • PTRC-related payment and return coordination.
  • Reconciliation of deductions with payroll records.

Employers must also follow the revised Professional Tax compliance timelines notified by the Maharashtra Government in February 2026.

06

Maharashtra Labour Welfare Fund

Where the establishment and employees are covered under the Maharashtra Labour Welfare Fund provisions, the applicable employee and employer contributions must be considered during payroll processing.

Payroll support can include:

  • Identifying applicable employees.
  • Employee and employer contribution calculations.
  • Half-yearly contribution records.
  • Payroll deduction statements.
  • Coordination of applicable payment and submission requirements.
07

Payslip Preparation and Payroll Reports

Employees should receive clear salary statements showing their earnings and applicable deductions.

Payroll reports can include:

  • Monthly employee payslips.
  • Gross and net salary statements.
  • Salary registers.
  • Attendance and leave summaries.
  • PF and ESIC contribution reports.
  • Professional Tax deduction statements.
  • Department-wise payroll summaries.
  • Monthly payroll reconciliation reports.

These records help management, HR and finance teams review monthly payroll information.

08

Employee Joining, Resignation and Full and Final Settlement

Employee joining and exit activities require appropriate updates to salary records and payroll calculations.

Payroll support can include:

  • New employee salary setup.
  • Employee master data updates.
  • Salary revisions.
  • Resignation-related salary adjustments.
  • Notice-period pay calculations as per applicable employment terms and law.
  • Leave encashment calculations, where applicable.
  • Gratuity-related payroll calculations, where applicable.
  • Full and final settlement statements.

Employee settlements should be calculated with reference to applicable wage-payment timelines, employment terms and statutory provisions.

New Labour Codes 2025–2026: Important Changes Affecting Payroll Processing

India's four Labour Codes came into effect on 21 November 2025, consolidating provisions from 29 existing Central labour laws.

These Codes are important for businesses because they affect wage calculations, minimum wages, social security, gratuity, overtime and employee-related records.

A payroll service provider must understand how these changes affect monthly salary calculations and statutory payroll administration.

Effective date of the four Labour Codes
21 November 2025
01

Code on Wages, 2019 – Revised Definition of Wages

One of the important changes under the Code on Wages, 2019 is the common definition of wages for statutory purposes.

The definition generally includes basic pay, dearness allowance and retaining allowance, if any, along with the treatment of specified components under the Code.

Understanding the 50% Wage Rule
50%

Under the revised wage definition, where specified excluded allowances and benefits exceed 50% of the total remuneration, the excess amount is added back to wages for statutory calculations, subject to the exclusions and conditions provided under the law.

Example of the 50% Wage Rule

An employee receives total monthly remuneration of ₹60,000. If the relevant excluded allowances exceed ₹30,000, the amount exceeding the 50% limit is added back to wages for applicable statutory calculations.

Important clarification: This does not mean that every employee must have exactly 50% of CTC as basic salary. The calculation must be made using the statutory definition of wages and the applicable components.

The Maharashtra Labour Department has clarified that overtime allowance forms part of the 50% wage calculation. Its FAQs also clarify the treatment of employer PF and pension contributions, statutory bonus, gratuity and ESI for this calculation.

What should employers review?

  • Existing salary structures and allowance components.
  • Basic salary and dearness allowance.
  • Employer PF and pension contribution components.
  • Overtime and variable salary components.
  • Statutory wage calculations for PF, gratuity and other applicable benefits.
  • Salary structures that may require revision.

A review of salary structures can help businesses identify possible differences between their earlier payroll calculations and the revised statutory wage definition.

02

Revised EPF Wage Ceiling: ₹25,000 from 17 September 2026

EPF UPDATE – SEPTEMBER 2026

The Central Government increased the wage ceiling for mandatory EPF coverage from ₹15,000 to ₹25,000 per month with effect from 17 September 2026.

The change was notified under the Code on Social Security, 2020 through Gazette Notification S.O. 5109(E).

Earlier ceiling ₹15,000
→
Revised ceiling ₹25,000

This is an important update for employers because employees who were previously outside mandatory EPF coverage solely because their wages exceeded ₹15,000 may now become eligible for coverage if their wages do not exceed ₹25,000 and they meet the other applicable eligibility conditions.

What employers should do:

  • Review employee records and existing PF membership.
  • Identify employees who were previously excluded because their wages exceeded ₹15,000.
  • Recheck eligibility under the revised ₹25,000 wage ceiling.
  • Review employee and employer contribution calculations.
  • Update payroll software and contribution records.
  • Ensure that the applicable PF filing and payment process reflects the revised provisions.

Important: The revised ceiling does not remove the need to check membership conditions, the statutory definition of wages and the applicable PF scheme provisions. Employers should not assume that every employee earning below ₹25,000 has identical contribution treatment.

03

ESIC Wage Ceiling and Payroll Calculations

The Code on Social Security, 2020 contains provisions relating to employee social security, including ESIC.

Current Notified ESIC Wage Limit
₹21,000

According to the Maharashtra Labour Department's current Labour Code FAQs, the notified ESIC coverage wage limit is ₹21,000 per month.

With the revised definition of wages effective from 21 November 2025, businesses should review employee eligibility using the applicable statutory wage calculation rather than relying only on an old salary structure.

Employers should review:

  • Employee wage components.
  • ESIC eligibility.
  • Applicable contribution calculations.
  • Employee insurance details.
  • Monthly payroll and ESIC records.

The applicable coverage limit and contribution requirements should always be checked against the latest notifications and rules.

04

Gratuity Calculation Under the Code on Social Security, 2020

The Code on Social Security, 2020 includes provisions relating to gratuity and other social security benefits.

The revised definition of wages applies to gratuity calculations from 21 November 2025, as clarified by the Maharashtra Labour Department.

Fixed-term employees: The Maharashtra Labour Department has clarified that a fixed-term employee becomes eligible for gratuity on completion of one year of service under the employment contract, subject to the applicable statutory conditions.

For other employees, the usual qualifying-service requirements and statutory exceptions must be considered.

Payroll administration should therefore consider:

  • Last drawn wages.
  • Applicable wage components.
  • Employee service period.
  • Type of employment.
  • Gratuity eligibility.
  • Full and final settlement calculations.

Employers should review gratuity provisions and financial estimates with the revised wage definition in mind.

05

Occupational Safety, Health and Working Conditions Code, 2020

The Occupational Safety, Health and Working Conditions Code, 2020 deals with working conditions, employee welfare and related employment provisions.

Although it is not a payroll calculation law alone, it has an important connection with attendance and wage administration.

Employers should maintain and review relevant information such as:

  • Employee attendance.
  • Working hours.
  • Overtime details.
  • Weekly rest and leave records.
  • Employee employment details.
  • Applicable contractor and contract-labour records.

This information may be required for wage calculations, overtime payments and statutory records.

06

Industrial Relations Code, 2020

The Industrial Relations Code, 2020 deals with industrial relations, trade unions, conditions of employment and the resolution of industrial disputes.

Its relevance to payroll and HR administration includes:

  • Employee separation.
  • Retrenchment-related payments.
  • Employment records.
  • Other applicable financial settlements.

Payroll calculations relating to employee separation should be aligned with the relevant employment terms and statutory requirements.

Payroll Checklist for Employers After the New Labour Codes

Businesses should review their payroll process to ensure that the relevant changes are reflected in monthly calculations.

A Practical Payroll Compliance Checklist

  1. Review existing salary structures and wage components.
  2. Check the 50% wage rule under the Code on Wages.
  3. Reassess PF eligibility after the revised ₹25,000 ceiling.
  4. Verify applicable ESIC eligibility and contribution calculations.
  5. Review gratuity calculations and fixed-term employee provisions.
  6. Check minimum wage requirements and current Maharashtra notifications.
  7. Review overtime, attendance and leave records.
  8. Update payroll software and salary calculation templates.
  9. Reconcile payroll deductions with applicable statutory records.
  10. Maintain updated employee information and supporting documents.
K

How Kaizen Can Help: Kaizen Consultancy Services can help businesses organise these payroll activities and understand the payroll-related compliance requirements applicable to their establishment.

Maharashtra-Specific Payroll Compliance Requirements

Businesses operating in Mumbai must consider applicable Maharashtra laws and notifications in addition to the Central Labour Codes.

Some important areas include:

Minimum Wages in Maharashtra

Employers must pay at least the applicable minimum wage fixed by the appropriate government. The applicable rate may depend on the relevant employment category, skill classification, geographical zone and current special allowance or Variable Dearness Allowance (VDA) notification. Businesses should check the latest applicable wage notification rather than rely on an old rate chart.

Professional Tax

Employers must calculate and deduct Professional Tax from eligible employees according to the applicable Maharashtra slabs and provisions. The Maharashtra Government amended Rule 11(3) of the Professional Tax Rules in February 2026, advancing certain annual and monthly compliance deadlines to the 15th. Payroll calendars should reflect the revised due dates applicable to the employer.

Review revised Professional Tax due dates

Labour Welfare Fund

Eligible establishments must consider applicable employee and employer contributions, payment schedules and submission requirements under the Maharashtra Labour Welfare Fund provisions.

Employee Records and Working Conditions

Businesses must maintain relevant employee, attendance, working-hours, leave and wage records under the applicable laws and rules governing their establishment.

These requirements should be reviewed periodically because wage notifications, statutory limits, return deadlines and state rules may change.

Why Should Businesses Outsource Payroll Processing?

Managing payroll internally requires coordination between HR, accounts and management. As employee strength increases, monthly salary processing and compliance administration can become more demanding.

Outsourcing agreed payroll activities can help businesses in several ways.

01

Reduce Internal Payroll Workload

The internal HR and accounts teams can spend less time on repetitive salary calculations, payslip preparation and monthly payroll reports.

02

Maintain Organised Payroll Records

A structured payroll process helps businesses maintain employee salary details, deductions, attendance information and monthly payroll statements.

03

Improve Payroll Coordination

Monthly payroll inputs, employee changes and statutory calculations can be organised through a defined process between the company and its payroll service provider.

04

Support Changing Compliance Requirements

An external payroll team can support payroll-related updates arising from changes in statutory wage definitions, contribution limits and applicable Maharashtra requirements.

05

Get Payroll Support Without Building a Large Internal Team

Small and growing businesses may prefer outsourcing payroll administration rather than developing a separate internal payroll function.

Important Note: Outsourcing payroll administration does not automatically remove the employer's responsibility to comply with applicable employment and statutory laws. The employer must provide correct employee data, review payroll outputs and complete the responsibilities that remain with it under the law and agreed service arrangement.

How Does Our Payroll Outsourcing Process Work?

Kaizen follows an organised process to understand business requirements and manage agreed monthly payroll activities.

01

Understand Your Payroll Requirements

We discuss your employee strength, salary structure, payroll frequency, attendance system and applicable statutory requirements.

02

Collect Employee and Company Details

The required employee information, salary details, PF and ESIC information, attendance records and previous payroll reports are collected through an appropriate process.

03

Process Monthly Payroll Inputs

We review the monthly salary inputs, attendance, leave, incentives, overtime, arrears and applicable deductions.

04

Prepare Payroll for Review

The salary calculations, payslips and payroll statements are prepared and shared with the authorised company representative for verification and approval.

05

Prepare Payroll Reports and Compliance Information

After approval, the agreed payroll reports and statutory information are prepared. Applicable filing, payment and compliance activities are handled according to the agreed scope and authorisations.

Documents Required for Third-Party Payroll Processing

To start payroll outsourcing, businesses may need to provide the following information:

Payroll Onboarding Document Checklist

  • ✓ Company registration and business details.
  • ✓ Employee master data.
  • ✓ Employee joining dates and employment details.
  • ✓ Monthly salary structure and CTC details.
  • ✓ Attendance, leave and overtime records.
  • ✓ Incentive, arrears and reimbursement details.
  • ✓ PF and ESIC registration and employee information, where applicable.
  • ✓ Professional Tax and Labour Welfare Fund details, where applicable.
  • ✓ Previous payroll statements for reconciliation.
  • ✓ Relevant company payroll policies.
!

Data Confidentiality: Employee bank details and other confidential personal information should be shared only through secure and authorised channels.

Industries That Can Benefit from Payroll Outsourcing

Third-party payroll services can support businesses across different industries, subject to their payroll requirements.

01 IT and Software Companies
02 Manufacturing and Engineering Businesses
03 Corporate Offices and Consulting Firms
04 Logistics and Warehouse Operations
05 Retail and Hospitality Businesses
06 Financial and Professional Service Companies
07 Healthcare and Service Organisations
08 Startups and Growing Businesses

Each industry may have different employee categories, salary structures, attendance systems and statutory requirements. Payroll processes should be organised according to the business's actual workforce and applicable laws.

Third-Party Payroll Services Across Mumbai and Nearby Business Districts

Mumbai | Thane | Navi Mumbai

Kaizen Consultancy Services provides payroll outsourcing support for businesses across Mumbai and surrounding commercial locations, including BKC, Andheri East, MIDC, Lower Parel, Worli, Powai, Vikhroli, Goregaon, Malad, Nariman Point, Thane and Navi Mumbai.

Whether your organisation operates from a corporate office, industrial estate, IT park or commercial establishment, we can discuss a payroll arrangement based on your employee strength and business requirements.

Why Choose Kaizen Consultancy Services for Payroll Outsourcing?

Choosing a payroll service provider requires more than comparing monthly processing charges. Businesses should consider payroll knowledge, statutory understanding, reporting, data confidentiality and the ability to support changing compliance requirements.

Kaizen Consultancy Services supports businesses with payroll administration and related labour-law compliance requirements.

Reasons to discuss your payroll requirements with Kaizen include:

01

Payroll Processing and Statutory Compliance Support

Support with monthly payroll activities and applicable statutory compliance requirements.

02

Understanding of PF and ESIC Payroll Requirements

Assistance with PF and ESIC-related payroll calculations, employee information and contribution records.

03

Salary Calculations and Employee Records

Assistance with salary processing, employee master information and monthly payroll records.

04

Maharashtra Professional Tax and Labour Welfare Fund

Support for applicable Maharashtra Professional Tax and Labour Welfare Fund requirements.

05

Payroll Reports and Payslip Preparation

Preparation of agreed employee payslips, salary statements and monthly payroll reports.

06

Employee Joining and Exit Coordination

Payroll coordination during employee joining, resignation and full and final settlement.

07

Support for New Labour Codes

Assistance with reviewing payroll-related changes under the New Labour Codes and applicable notifications.

Our objective is to help businesses maintain an organised payroll process and reduce the administrative workload involved in monthly salary management.

Frequently Asked Questions About Third-Party Payroll Companies in Mumbai

Find answers to common questions about third-party payroll processing, payroll outsourcing, statutory compliance and payroll services in Mumbai.

01 What is a third-party payroll company? +

A third-party payroll company is an external service provider appointed by a business to manage agreed payroll activities. These may include salary calculations, payslips, attendance adjustments, statutory deduction calculations and payroll reports.

02 What is the difference between payroll outsourcing and contract staffing? +

Payroll outsourcing generally involves assigning payroll administration to an external service provider while employees remain on the client's employment records. Contract staffing involves workers being engaged through a contractor under a different contractual arrangement. Their statutory responsibilities must be assessed separately.

03 What services are included in payroll outsourcing? +

Payroll outsourcing may include monthly salary processing, CTC calculations, attendance and leave adjustments, payslip preparation, PF and ESIC support, Professional Tax, payroll reports and full and final settlement calculations. The actual scope depends on the agreement between the business and service provider.

04 Can a third-party payroll company manage PF and ESIC compliance? +

A payroll service provider can support PF and ESIC eligibility checks, contribution calculations, employee information, payroll records and agreed filing activities. The employer must still ensure that statutory responsibilities are fulfilled under the applicable law.

05 What is the revised PF wage ceiling in 2026? +

The Central Government increased the EPF wage ceiling for mandatory coverage from ₹15,000 to ₹25,000 per month, effective 17 September 2026. Employee eligibility and contributions must be assessed under the applicable provisions and scheme conditions.

06 What is the 50% wage rule under the New Labour Codes? +

Under the revised definition of wages, if specified excluded allowances and benefits exceed 50% of total remuneration, the excess is added back to wages for applicable statutory calculations. The calculation depends on the statutory definition and treatment of individual salary components.

07 What is the current ESIC wage limit? +

The Maharashtra Labour Department's current Labour Code FAQs state that the notified ESIC coverage wage limit is ₹21,000 per month. The applicable wage definition and employee eligibility conditions should also be considered.

08 Is the employer still responsible after outsourcing payroll? +

Yes. Outsourcing payroll processing does not automatically transfer the employer's statutory responsibilities to the payroll service provider. The employer must ensure that applicable laws are followed, provide correct employee information and review payroll outputs.

09 Can small businesses outsource payroll processing? +

Yes. Small businesses, startups and growing organisations can consider payroll outsourcing when they want external support for monthly salary calculations, payslips, employee records and applicable statutory payroll activities.

10 What documents are required to start payroll outsourcing? +

Generally, the business needs to provide employee master information, salary structures, attendance and leave records, company details and applicable PF, ESIC and Professional Tax information. Additional details may be required depending on the services agreed upon.

11 How much does third-party payroll outsourcing cost in Mumbai? +

Payroll outsourcing charges depend on the number of employees, payroll complexity, frequency of processing, statutory compliance requirements and services included. Contact Kaizen Consultancy Services for a proposal based on your business requirements.

12 Which areas does Kaizen cover for payroll services? +

Kaizen Consultancy Services supports payroll outsourcing enquiries from businesses across Mumbai, including BKC, Andheri, Lower Parel, Powai, Goregaon, Malad and South Mumbai, as well as Thane and Navi Mumbai.

Payroll Outsourcing Support

Looking for a Reliable Third Party Payroll Company in Mumbai?

Managing salary processing, employee records and statutory payroll requirements every month can take valuable time away from your core business activities.

Kaizen Consultancy Services provides third-party payroll support to help businesses organise monthly salary processing, payroll reports and related statutory compliance activities.

Whether you need monthly payroll processing, PF and ESIC-related payroll support, Professional Tax calculations or complete payroll administration, discuss your requirements with our team.

Quick Connect

Kaizen Consultancy Services provides Third-party payroll support to help businesses organise monthly salary processing, payroll reports and related statutory compliance activities. Whether you need monthly payroll processing, PF and ESIC-related payroll support, Professional Tax calculations or complete payroll administration, discuss your requirements with our team.Our Payroll Outsourcing in Mumbai as per New Labour Code team offers expert guidance on women/youth provisions, fixed-term equality, and digital portability. Contact +91-977 31 50 167 for a free consultation to streamline your payroll under the New Labour Law Codes.

Contact Us