Salary processing
Monthly gross-to-net calculation from attendance, leave, overtime, arrears, incentives and loans, with a bank transfer file ready for your approval.
Payroll Services in Kochi, Kerala
T K Chandy & Associates provides payroll services in Kochi for companies, firms, NGOs and start-ups. We process monthly salaries and payslips, calculate TDS on salaries, handle PF, ESI and Kerala professional tax, issue the annual TDS certificate to employees and settle full and final dues, in line with the new Labour Codes in force since 21 November 2025.
- Led by a chartered accountant since 1994
- Member of SGA World International
- Kakkanad, Kochi
At a glance
Payroll services at a glance
- Who it suits: Employers in Kochi and Kerala with a handful to a few hundred staff who want salaries, statutory deductions and filings handled correctly every month.
- What we do: Salary processing and payslips, TDS on salaries, PF and ESI contributions and returns, Kerala professional tax, the annual TDS certificate and full and final settlement.
- Key thresholds: EPF wage ceiling ₹15,000 a month; ESI covers employees earning up to ₹21,000 a month; both pay by the 15th of the following month.
- What changed: The four Labour Codes came into force on 21 November 2025, with one definition of "wages" that can raise PF and gratuity costs where allowances are high.
Payroll looks simple until something goes wrong: an employee's TDS is under-deducted and the shortfall lands in March, PF is calculated on the wrong wages, an ESI-eligible worker is left out, or the panchayat sends a professional tax demand for staff who left a year ago. Each mistake costs interest, damages or an unhappy team.
Payroll services from T K Chandy & Associates take the monthly payroll cycle off your desk. Our team in Kakkanad, Kochi calculates salaries from your attendance and pay structure, deducts and deposits TDS on salaries, PF, ESI and Kerala professional tax, issues payslips, files the returns and keeps the records your auditor and inspectors will ask for. We also review salary structures under the new Labour Codes, so your wage base for PF and gratuity is calculated the way the law now requires.
Payroll outsourcing in Kochi
Which Employers Do We Run Payroll For?
We run payroll for businesses across Ernakulam and Kerala, from a ten-person office to multi-location employers. A chartered accountant reviews the payroll before salaries are released.
- IT, ITES and service companies in Kakkanad and Infopark with structured salary packages
- Traders, manufacturers and hotels with shift workers, overtime and ESI-covered staff
- Hospitals, clinics and schools with large and varied staff groups
- Start-ups setting up their first payroll, PF and ESI registrations
- NGOs and trusts that need payroll costs allocated to projects and grants
- Foreign-owned companies that need an Indian payroll run by a firm they can rely on
What the service covers
What Is Included in Our Payroll Services?
Payslips
Clear monthly payslips showing earnings, deductions, PF, ESI, professional tax and TDS, sent to employees by email or a shared folder.
TDS on salaries
Estimated annual tax under the regime each employee chooses, monthly TDS, deposit, the quarterly salary TDS return and the annual TDS certificate.
PF and ESI
Registration support, monthly contribution calculation, ECR and ESI filings, new joiner and exit updates, and challan records for inspections.
Kerala professional tax
Half-yearly professional tax calculated for each employee and remitted to the panchayat, municipality or corporation where your establishment is.
Full and final settlement
Final salary, leave encashment, notice pay, gratuity and recoveries computed and documented when an employee leaves.
Statutory deductions
What Are the PF, ESI and Professional Tax Rules in Kerala?
The main payroll deductions for a Kochi employer, as confirmed on official sources at the date of review:
Provident Fund (EPF)
- Who is covered
- Establishments with 20 or more employees; mandatory for employees with PF wages up to ₹15,000 a month
- Contribution
- 12% employee and 12% employer, with 8.33% of the employer share (on wages up to ₹15,000) going to the pension scheme
- When paid
- By the 15th of the following month
Employees' State Insurance (ESI)
- Who is covered
- Covered establishments with 10 or more employees; employees earning up to ₹21,000 a month (₹25,000 for persons with disability)
- Contribution
- 0.75% employee and 3.25% employer, on total wages
- When paid
- By the 15th of the following month
Kerala professional tax
- Who is covered
- Employees whose half-yearly income is above the local body's exemption limit
- Contribution
- As per the half-yearly slab of the panchayat, municipality or corporation; capped at ₹2,500 a year by the Constitution
- When paid
- Half-yearly (April–September and October–March)
TDS on salaries
- Who is covered
- Employees whose estimated income is above the tax-free limit under the chosen regime
- Contribution
- Average rate of tax on estimated annual salary income
- When paid
- Monthly, with a quarterly salary TDS return
Professional tax in Kerala is assessed and collected by the local body (grama panchayat, municipality or corporation such as Kochi Corporation), so the slab and due dates depend on where your office is. We confirm the applicable schedule for each establishment.
New Labour Codes
How Do the New Labour Codes Affect Your Payroll?
The Code on Wages, 2019, the Code on Social Security, 2020, the Industrial Relations Code, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 came into force on 21 November 2025, replacing 29 older labour laws. Rules under the Codes were pre-published by the Central Government on 30 December 2025, and states are notifying their own rules, so some details are still settling.
One definition of wages. The Codes use a single definition of "wages": basic pay, dearness allowance and retaining allowance. Certain items such as HRA, conveyance, overtime and bonus are excluded, but if the excluded items together exceed 50% of total remuneration, the excess is added back to wages. For employers who kept basic pay low and allowances high, this can increase PF contributions, gratuity and other wage-linked costs.
Other changes payroll teams should note: gratuity for fixed-term employees after one year of service; wages of an employee who resigns, is removed or is retrenched to be paid within two working days; and wider social security coverage, including gig and platform workers. We review your salary structure, show the cost impact of restructuring and update the payroll once you decide.
Our process
How Does Payroll Outsourcing Work With Us?
Step01
Set-up and review
We review your salary structures, appointment letters, PF, ESI and professional tax registrations, and agree the payroll calendar and cut-off dates.
Step02
Monthly inputs
You send attendance, leave, new joiners, exits, increments and one-off payments by the agreed cut-off date.
Step03
Calculation and review
We calculate gross-to-net pay, PF, ESI, professional tax and TDS, and a chartered accountant reviews the register before you approve it.
Step04
Payment and payslips
You release salaries from your bank using our transfer file; we issue payslips and the payroll journal for your books.
Step05
Statutory deposits and returns
We prepare PF ECR, ESI contributions, TDS challans and returns, and professional tax remittances on time, and file the acknowledgements.
Step06
Year-end and exits
Investment proofs, the annual TDS certificate, full and final settlements and reconciliations of PF, ESI and TDS with your accounts.
Getting started
What Do We Need to Set Up Your Payroll?
Share these at the start, and only the monthly changes after that:
- Employee master with PAN, Aadhaar and bank details
- Salary structure and CTC for each employee
- Appointment letters and increment letters
- PF establishment code and UANs
- ESI code and insurance numbers
- Professional tax registration and last demand
- TAN and previous TDS returns
- Tax regime choice and investment declarations
- Attendance and leave records for the month
- Loans, advances and recoveries
- Previous employer income for new joiners
- Leave and gratuity policies
Annual TDS certificate
Form 16 or Form 130 – Which Will Your Employees Receive?
Under the Income-tax Act, 2025, effective from 1 April 2026, the salary TDS certificate is Form No. 130, which replaces Form 16 and is issued under section 395. It has three parts, with an annexure summarising salary, deductions and tax. It must be generated from the TRACES portal and issued by 15 June after the end of the tax year, which means employers will first issue Form 130 for tax year 2026-27, in June 2027.
For financial year 2025-26, deductions were made under the old Act, so employees received Form 16 in 2026. The quarterly salary TDS return is also renumbered under the new rules (Form 138, replacing Form 24Q). We prepare the certificates for both years and help employees reconcile them with their income tax returns.
Worked example
Example: Payroll Clean-up for a Kakkanad IT Company
A 45-person software company in Kakkanad ran payroll on spreadsheets. Basic pay was 30% of CTC and the rest was paid as allowances.
- We found two employees who had crossed the ESI limit mid-year and three new joiners not yet added to PF.
- Under the Labour Codes wage definition, allowances above 50% of remuneration were being left out of the PF wage base for employees who contribute on actual wages. We prepared a restructuring note showing the extra monthly cost and the effect on take-home pay.
- TDS had been calculated on the old regime for everyone; we collected regime choices and corrected the monthly deduction from the next payroll.
- Professional tax had not been remitted for the October–March half; we computed the dues and remitted them to the local body.
From the following month, payroll closed three days before pay day, with payslips, PF, ESI and TDS filed on time and agreeing with the books.
Fees and timing
How Much Do Payroll Services Cost in Kochi?
The fee depends on the number of employees, the number of locations and local bodies, how complex your pay structure is (shifts, overtime, incentives, variable pay), whether PF and ESI apply, how many full and final settlements you expect, and whether you need restructuring advice under the Labour Codes. We quote a fixed monthly fee in writing after reviewing your current payroll, with registrations or clean-up work quoted separately.
New payrolls usually go live from the next month's salary cycle once the employee master and registrations are in place. See our compliance calendar for TDS and other monthly due dates.
Defaults
What Happens If Payroll Deductions Are Paid Late?
- PF paid after the due date
- Interest and damages are levied by EPFO for the period of delay
- ESI paid after the due date
- Interest and damages are levied by ESIC for the period of delay
- TDS not deducted or deposited late
- Interest for each month of delay, possible disallowance of the salary expense and penalty proceedings
- Salary TDS return filed late
- Late fee for each day of delay, and employees cannot see their credit until it is filed
- Professional tax not deducted or remitted
- The employer remains liable for the tax and the default is an offence under the local body law
Why T K Chandy & Associates
Why Choose Us for Payroll Services in Kochi?
CA-reviewed payroll
A firm led by T K Chandy Vaidyan, chartered accountant since 1994, with a CA review of every payroll before release.
Payroll, tax and books together
Payroll journals, TDS returns and accounts handled by one firm, so salary costs agree everywhere.
Local knowledge of Kerala
Professional tax with panchayats, municipalities and Kochi Corporation, and familiarity with Kerala employers' practices.
Labour Codes ready
Wage definitions, gratuity and settlement timelines under the new Codes built into your payroll.
Confidential salary data
Salary information seen only by the team on your engagement, under ICAI confidentiality rules.
Continuity
A team, not a single payroll clerk, so salaries go out on time even during leave and staff changes.
Related services
Which Services Work With Your Payroll?
Accounts outsourcing
Monthly bookkeeping with payroll journals posted and reconciled.
TDS compliance
TDS on salaries, contractors, rent and professionals, with quarterly returns.
Income tax filing
Income tax returns and planning for directors and employees.
Virtual CFO
Budgets and staff cost planning as your team grows.
Internal audit
Independent checks on payroll controls, attendance and statutory dues.
Get a quote
Request a payroll services quote
Tell us how many employees you have, where your offices are and whether PF and ESI apply. We will reply with the scope, payroll calendar and a fixed monthly fee.
Prefer to talk now? Call +91 484 354 1530 or email [email protected].
Who prepared this page
Written and reviewed by chartered accountants at T K Chandy & Associates
This page is prepared by the audit and tax team at our Kakkanad, Kochi office and checked against the Companies Act, the Income-tax Act, GST law and ICAI standards. It is reviewed whenever the rules change.
- Last reviewed 29 October 2026
- Led by T K Chandy Vaidyan, chartered accountant since 1994
- Member of SGA World International
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Ask an expertFrequently asked questions
Payroll services in Kochi – frequently asked questions
Short answers to the questions clients in Kochi ask us most. Still unsure?
Talk to our team01.What is the PF wage ceiling in 2026?
The EPF wage ceiling is ₹15,000 a month. Employees earning PF wages up to ₹15,000 must be enrolled; those above it can be covered voluntarily. Contributions are 12% from the employee and 12% from the employer.
02.What is the ESI salary limit?
ESI covers employees earning up to ₹21,000 a month (₹25,000 for persons with disability). The employee contributes 0.75% and the employer 3.25% of wages. An employee who crosses the limit mid-period stays covered until the period ends.
03.When must PF and ESI be paid?
Both PF and ESI contributions for a month must be paid by the 15th of the following month. Late payment attracts interest and damages.
04.How is professional tax collected in Kerala?
In Kerala, professional tax is levied by the local body, such as the grama panchayat, municipality or Kochi Corporation, on a half-yearly basis. The employer deducts it from salaries and remits it to the local body where the establishment is.
05.What is the maximum professional tax in Kerala?
The Constitution caps professional tax at ₹2,500 per person per year. The actual slab depends on the half-yearly income and the schedule of the local body.
06.Are the new Labour Codes in force?
Yes. All four Labour Codes, on wages, social security, industrial relations and occupational safety, came into force on 21 November 2025. Central and state rules are being finalised, so some procedures are still changing.
07.What is the 50% wage rule under the Labour Codes?
Wages mean basic pay, dearness allowance and retaining allowance. Excluded items such as HRA, conveyance and overtime cannot together exceed 50% of total remuneration; any excess is treated as wages for PF, gratuity and other wage-based calculations.
08.Is Form 16 replaced by Form 130?
Yes. Under the Income-tax Act, 2025, the salary TDS certificate is Form No. 130. Employers issue it from TRACES by 15 June after the tax year, so it applies first to tax year 2026-27. Financial year 2025-26 salaries were certified in Form 16.
09.When is full and final settlement due?
Under the Code on Wages, wages of an employee who resigns, is removed, dismissed or retrenched must be paid within two working days. Gratuity and other dues follow their own rules, so we compute them together for each exit.
10.Is gratuity now payable after one year?
For fixed-term employees, yes. Under the Code on Social Security, fixed-term employees become eligible for gratuity after one year of continuous service. For other employees, the five-year service condition continues.
11.How is TDS on salary calculated?
The employer estimates the employee's annual salary income under the tax regime the employee chooses, applies deductions and rebates, and deducts the tax evenly over the remaining months. Under the new regime, income up to ₹12 lakh is effectively tax-free after rebate, plus the ₹75,000 standard deduction.
12.Can a small business outsource payroll for only 10 employees?
Yes. Payroll outsourcing works for small teams as well. The fee is based mainly on the number of employees, so a small payroll costs less while still getting correct TDS, PF, ESI and professional tax.
13.Do you handle PF and ESI registration for new employers?
Yes. We help new employers register with EPFO and ESIC once they cross the thresholds, set up employee UANs and insurance numbers, and start monthly filings.
14.Will our salary data be confidential?
Yes. Salary data is accessed only by the team working on your payroll, under ICAI confidentiality rules, and we do not need to operate your bank accounts; you release salaries yourself.
References:EPFO – wage ceiling and contribution rates · ESIC – coverage and wages · PIB – Labour Codes made effective (21 November 2025) · Income Tax Department – Form No. 130 · Kochi Municipal Corporation – profession tax — reviewed 29 October 2026