Monthly Payroll Checklist for India: Before, During, After

Payroll repeats every month, which is exactly why steps get skipped: a leaver nobody told payroll about, a PF challan paid a day late, a professional tax slab that changed. A written checklist, ticked off and filed each month, prevents most of these. Use it as a payroll checklist template: copy it into Excel or Google Sheets, or print it to PDF and tick it off each month. For the full explanation of each step, see our guide to the payroll process in India.

Before payroll: inputs checklist

Set an input cut-off date, usually a few days before month end, and collect everything by then (see our payroll cut-off guide).

• ☐ Headcount agreed with HR: active employees at month start and end.
• ☐ Joiners: appointment letter, salary structure, PAN, Aadhaar, bank details, existing UAN, or a new UAN generated through Aadhaar face authentication, ESI number if covered, tax regime choice (the new regime applies unless the employee opts out).
• ☐ Leavers: last working day, notice period recovery or pay, leave balance, assets returned; mark for full and final settlement.
• ☐ Salary revisions, promotions and arrears approved in writing, with effective dates.
• ☐ Attendance closed: paid days, leave, loss-of-pay days and overtime hours, with approvals.
• ☐ Variable pay, incentives, bonus or reimbursements for the month approved.
• ☐ Loans and salary advances: new advances paid and instalments due.
• ☐ Tax declarations or proofs received; changes in TDS for the month.
• ☐ Changes to bank accounts or personal details verified with the employee.
• ☐ Statutory rate or slab changes checked: PF ceiling, ESI limit, minimum wages, State professional tax and LWF.

During payroll: processing and review checklist

• ☐ Payroll processed for all employees and the payroll register generated.
• ☐ Minimum wages checked for every employee against the applicable State rate.
• ☐ PF calculated on wages as defined in the Labour Codes, with the ₹25,000 ceiling applied as per policy.
• ☐ ESI applied to covered employees, with contributions rounded up to the next rupee.
• ☐ Professional tax and LWF applied by State and slab.
• ☐ TDS calculated on projected annual taxable salary under the chosen regime.
• ☐ Total deductions within the 50% limit under the Code on Wages; no negative net pay.
• ☐ Variance report: headcount, gross and each deduction compared with last month, and every difference explained.
• ☐ Spot check of a few payslips against the register.
• ☐ Payroll register and summary approved by an authorised person (not the preparer).

Our payroll register guide lists the fields to check, and our reconciliation guide shows how to explain the movement from last month.

After payroll: payment, compliance and records checklist

Payments

• ☐ Bank transfer file matches net pay in the approved register; released and confirmed.
• ☐ Salary credited before the end of the 7th day of the next month (wage period of one month).
• ☐ Returned or failed transfers followed up and re-paid.
• ☐ Payslips issued to all employees.

Statutory deposits and returns

All dates are in our payroll compliance calendar, with details in the PF challan, ESIC challan and Form 138 guides. Official sources: EPFO and ESIC.

Accounts and records

• ☐ Payroll journal posted for the month (salary expense, employer contributions, salary payable and statutory payables).
• ☐ Payments posted and each payable cleared to nil.
• ☐ Bank, PF, ESI, PT and TDS reconciled with the register.
• ☐ Wage, attendance, deduction and overtime registers updated as required under the Labour Codes.
• ☐ Approved register, challans, acknowledgements and approvals filed together for the month.
• ☐ Full and final settlements for leavers processed within the time allowed.

Accounting entries are in our salary journal entry guide; registers in the statutory registers guide.

Payroll year-end checklist (January to November)

• ☐ January–February: request investment proofs from employees and verify them.
• ☐ February–March: final TDS calculation; adjust March TDS so the year's tax is fully deducted.
• ☐ By the last day of February: annual returns under the Labour Codes for the previous calendar year where applicable (for example, Form XVII under the OSH Central Rules for the central sphere).
• ☐ March: payroll for March accrued in the books at 31 March, even if paid in April.
• ☐ March: bonus, gratuity and leave encashment provisions updated (actuarial valuation where required).
• ☐ By 30 April: March TDS deposited.
• ☐ By 31 May: fourth-quarter Form 138 filed with annual salary details.
• ☐ By 15 June: Form 130 issued to every employee.
• ☐ Year-end reconciliation: salary in the books agreed with Form 138 and PF records.
• ☐ Within eight months of the year end: statutory bonus paid to eligible employees.

See our payroll provisions guide for the year-end accounting.

New payroll setup checklist

When starting payroll for a new business or moving to a new system, check these once:

• ☐ Registrations: PF establishment code, ESI employer code, professional tax and LWF registrations where applicable, TAN.
• ☐ Pay policy: wage period, pay date, salary structure, leave and loss-of-pay rules, overtime policy.
• ☐ Employee master data complete and verified for every employee.
• ☐ Statutory rates and State slabs set up and tested with sample employees.
• ☐ Bank payment format agreed with the bank.
• ☐ Opening balances (YTD salary and TDS) entered for employees joining mid-year or moving systems.
• ☐ Roles and access: who prepares, who reviews, who approves, who can change bank details.

Payroll review checklist for the approver

The person approving payroll does not need to redo it, but should ask these questions before signing:

• ☐ Does the headcount match HR's numbers, and are all joiners and leavers explained?
• ☐ Is every change in gross pay from last month explained (revisions, arrears, loss of pay, one-off payments)?
• ☐ Are there any unusually large or negative net payments?
• ☐ Do PF, ESI and TDS totals move in line with gross pay?
• ☐ Have bank details changed for anyone this month, and were the changes verified?
• ☐ Does the bank file total equal net pay in the register?

Most common checklist misses

• Leavers paid after exit: HR's exit information reached payroll late. Fix the cut-off and the exit notice.
• Joiners without UAN or ESI number: PF and ESI cannot be filed for them; collect these at joining.
• Old professional tax slab: a State revised its slab and the payroll was not updated.
• Late PF or ESI deposit: interest and damages follow. The employer also loses the income-tax deduction for the employees' share if it is not deposited by the due date for filing the employer's income-tax return.
• No sign-off: payroll paid without documented approval, which leaves the business without evidence if something goes wrong.

How to use this checklist

• Make it monthly: copy the checklist into a sheet with a column for each month and tick items as they are done, with the date and initials.
• Assign owners: HR owns inputs, payroll owns processing, finance owns payments and accounts, and someone independent approves.
• Keep evidence: file the completed checklist with the register and challans for the month.
• Review it: update the checklist whenever a law, rate or internal policy changes.

Frequently asked questions

What is a payroll checklist?

A payroll checklist is a list of the tasks to complete every pay period, in order, so nothing is missed: collecting inputs, processing and reviewing the payroll, paying salaries, depositing PF, ESI, professional tax and TDS, filing returns, posting the accounts and keeping records.

What is an HR checklist for payroll?

An HR checklist for payroll covers the inputs HR must give payroll each month: joiners with documents, leavers with last working days, salary revisions, promotions, attendance and leave, overtime approvals, and changes to bank or personal details. Payroll should not be processed until HR confirms these.

What is a payroll compliance checklist?

A payroll compliance checklist lists the statutory deposits, returns and records with their due dates: salary by the 7th, TDS by the 7th, PF and ESI by the 15th, professional tax and labour welfare fund by State dates, quarterly TDS returns in Form 138, annual Form 130, and registers and annual returns under the Labour Codes.

What should be done at payroll year end?

At year end, collect investment proofs and finalise TDS for March, deposit March TDS by 30 April, file the fourth-quarter Form 138 by 31 May and issue Form 130 by 15 June. Also reconcile salary in the books with the TDS records, update gratuity, leave and bonus provisions, and pay statutory bonus within eight months of the year end.

Position as of 15 November 2026. Due dates as they apply to private-sector employers; State professional tax and LWF dates vary. General information, not legal or tax advice.