Payroll Software Costs, Features and 2026 Rules
What payroll and HR software charges for, which statutory features matter, and the labour code, EPF, ESI, PT and income-tax rules your system must apply in 2026.
payroll and HR software comparison
Payroll and HR software compared by type, statutory fit and three-year cost
Payroll software is only as good as the salary it gets right every month: EPF, ESI, professional tax, TDS on salary and the labour code rules that changed in 2025 and 2026. These guides compare software types and pricing models, show the arithmetic in rupees and list what to test before you sign.
- Types compared, not vendors ranked: payroll-only SaaS, HR suites, accounting add-ons, ERP modules and outsourcing
- Worked sums for cost per employee, 3-year TCO and payback, with every price labelled illustrative
- 2026 rules at the source: four labour codes, EPF ₹25,000 ceiling, Income-tax Act 2025 forms, DPDP
Explore by topic
Cost Examples, TCO and Selection Checklists
A best-fit method for choosing payroll and HR software, cost-per-employee and 3-year TCO sums, outsourcing versus software, payback and worked statutory examples.
Failure Patterns, Migration and Official Sources
Why payroll software projects go wrong, how to migrate mid-year without breaking TDS or PF, integrations with Tally, banks and biometrics, employee data under DPDP, contracts and official sources.
Start here
Cost Examples, TCO and Selection Checklists
How to choose payroll and HR software: a best-fit method and checklist for Indian MSMEs
A seven-step best-fit method for choosing payroll and HR software in India, with weighted criteria, five test employees, cost comparison and a checklist.
Payroll Software Costs, Features and 2026 Rules
Labour codes and payroll in 2026: wage definition, settlements, overtime, bonus and what your software must change
The four labour codes in force since 21 Nov 2025 and the May 2026 central rules, explained for payroll: 50% wage rule, 2-day settlement, overtime, bonus, gratuity, registers.
Payroll Software Costs, Features and 2026 Rules
Payroll and HR software comparison in India: types, pricing models and the 2026 rules to check
Compare payroll and HR software types for Indian MSMEs by statutory depth, pricing model and 3-year cost, with the labour code, EPF, ESI and TDS rules for 2026.
Cost Examples, TCO and Selection Checklists
Payroll software 3-year total cost of ownership: a worked example for an 80-employee business
A line-by-line 3-year TCO for payroll and HR software in India, with growing headcount, renewal uplift, modules, one-time costs, staff time and GST, compared with outsourcing.
Failure Patterns, Migration and Official Sources
Why payroll software projects fail in Indian MSMEs, and how to avoid the usual patterns
Common failure patterns when Indian small businesses adopt payroll and HR software: bad masters, attendance gaps, labour code wage errors, mid-year TDS breaks, bank file mistakes.
Payroll Software Costs, Features and 2026 Rules
TDS on salary under the Income-tax Act, 2025: section 392, new regime default and Forms 124, 130 and 138
What payroll software must do for salary TDS from tax year 2026-27: section 392, new vs old regime, Form 124 claims, Form 138 quarterly returns and Form 130 certificates.
Tools
Payroll Software Monthly Cost Estimator
Estimate a monthly payroll software or outsourcing bill from headcount, an illustrative per-employee price band and fixed monthly fees.
Payroll Software Renewal Uplift Calculator
See what your payroll or HR software bill becomes at renewal after a price uplift, added employees and new modules, before GST.
Payback Calculator for Switching Payroll
Work out how quickly the one-time cost of moving from manual or outsourced payroll to software is recovered from yearly net savings.
Payroll and HR Software Selection Checklist
A step-by-step checklist for Indian MSMEs choosing payroll and HR software: statutory engine, attendance, integrations, data, pricing and contract.
Payroll and HR options for Indian MSMEs, compared by type
| Payroll option | How it is usually priced | Tends to fit | Watch out for |
|---|---|---|---|
| Spreadsheet plus a CA or consultant for filings | No software fee; staff hours plus a monthly or per-return professional fee | Up to about 10–15 employees in one state with simple salaries | Formula errors, no audit trail, key-person risk, TDS projections and labour code wage tests done by hand |
| Payroll feature in accounting software (e.g. TallyPrime payroll) | Included in or added to the accounting licence; often flat rather than per employee | Small teams whose accountant already runs the books in that software | Depth of statutory files, employee self-service and attendance varies; check what updates the licence covers |
| Payroll-only SaaS (e.g. Zoho Payroll, RazorpayX Payroll) | Per employee per month, sometimes with a base fee or minimum; annual billing often cheaper | 10–200 employees wanting statutory payroll, payslips and filings without a full HR suite | Attendance, leave or expense modules may cost extra; check multi-state PT and LWF coverage |
| Payroll plus core HR suite (e.g. greytHR, Keka) | Per employee per month in tiers or bundles of modules | Growing MSMEs that want leave, attendance, self-service and payroll in one place | Tier jumps for features like shift rosters or approvals; per-employee price applies to the whole headcount |
Frequently asked questions
Which is the best payroll software for a small business in India?
There is no single best product. The best fit depends on headcount, number of states, how many people are daily-rated, shift or contract workers, and who processes payroll today. Compare software types first, then test two or three products with your own salary data using the selection checklist.
How much does payroll software cost per employee per month?
Most payroll SaaS is priced per employee per month, often with a base fee or minimum headcount. As an illustrative range, payroll-only software may cost around ₹40–₹150 per employee per month and payroll plus HR suites ₹100–₹350, before 18% GST. Check each vendor's current price page and use the cost estimator.
Did the new labour codes change payroll in 2026?
Yes. The four labour codes came into force on 21 November 2025 and the final central rules were published in May 2026. Payroll changes include a uniform definition of wages with the 50% rule, full and final settlement within two working days, overtime at twice the normal rate and gratuity for fixed-term employees after one year. State rules still differ, so see the labour codes guide.
What is the EPF wage ceiling now?
The EPF wage ceiling was raised from ₹15,000 to ₹25,000 a month with effect from 17 September 2026 (S.O. 5109(E) of 17 September 2026 under the Code on Social Security). Contributions remain 12% from the employee and 12% from the employer on wages up to the ceiling. How EPFO applies the change to the EPS share and the split September month should be checked in its circulars and FAQs on EPFO.
Is Form 16 replaced by Form 130?
Under the Income-tax Act, 2025 and the Income-tax Rules, 2026, the salary TDS certificate is Form 130 and the quarterly salary TDS return is Form 138, replacing Form 16 and Form 24Q for tax year 2026-27 onwards. Form 16 was still issued for FY 2025-26 under the old Act. Confirm with the TDS on salary guide and the Income Tax Department.
Should we outsource payroll or buy software?
Outsourcing suits firms without payroll staff or with many sites; software suits firms that can process payroll in-house and want control and lower cost per head as they grow. Either way the employer stays responsible for correct deductions and deposits. Compare both over three years in the outsourcing versus software guide.
Can we switch payroll software in the middle of the financial year?
Yes, but plan it. Migrate year-to-date salary, TDS, PF, ESI and leave balances, run at least one month in parallel and reconcile both outputs before you stop the old system. Quarter starts are the easiest points. See the migration guide.
Does the DPDP Act apply to employee payroll data?
Yes. Employee data is personal data. The Act allows processing for employment purposes as a legitimate use, but the employer remains responsible as data fiduciary and the payroll vendor acts as processor. Most obligations under the DPDP Rules, 2025 apply from 13 May 2027. See the employee data guide.
How this site is made
Vetan Vivek is an independent information project. Guides are drafted with the help of AI writing tools and checked against official and primary sources before publication; see our Editorial Policy. We are not affiliated with any provider mentioned on the site and do not sell products or services.