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HR, Payroll & Statutory Compliance Guide

Indian SMB Payroll & Statutory Slabs Engine

Designed specifically for Indian businesses. Manage employee masters, configure salary structures conforming to the New Wage Code, automate statutory deductions (EPF, ESI, Professional Tax, LWF, TDS), generate bank payout files, and post compound salary journals automatically to the General Ledger.

1. Module Overview: Indian Statutory Rules Engine

Katixo ERP embeds India's statutory labor rules directly into the payroll calculation engine:

Employees' Provident Fund (EPF)

12% Employee + 12% Employer of Basic + DA. Capped at ₹15,000 monthly statutory ceiling by default (with optional un-capped employer contribution). Employer share is split into 3.67% EPF + 8.33% EPS.

Employees' State Insurance (ESI)

0.75% Employee + 3.25% Employer of Gross Salary. Applicable automatically for all staff with monthly gross wages ≤ ₹21,000. Exempt for staff earning above threshold.

Professional Tax (PT) Slabs

State-specific statutory monthly slabs (e.g. Maharashtra ₹200/mo and ₹300 in Feb; Karnataka ₹200/mo for gross > ₹15,000; Telangana, Gujarat, West Bengal).

TDS (Section 192) & LWF

Monthly Tax Deducted at Source based on employee tax regime (Old vs New Regime) and state-specific Labour Welfare Fund semi-annual deductions.

2. How to Configure Employee Salary Structures

  1. 1
    Add Employee Profile: Navigate to Payroll > Employees > "Add Employee". Enter full name, PAN, Aadhaar, Universal Account Number (UAN for PF), ESIC IP Number, and Bank Account with IFSC.
  2. 2
    Assign Salary Components (Wage Code Compliant): Under employee profile, set CTC. The system automatically partitions:
    • Basic Salary: 50% of monthly gross (ensures statutory minimum under Wage Code).
    • House Rent Allowance (HRA): 40% (non-metro) or 50% (metro) of Basic.
    • Special Allowance / Conveyance: Balancing figure for remaining gross.

3. Running Monthly Payroll (Step-by-Step)

1
Initiate Payroll Run:Go to Payroll > Payroll Runs > Click "New Payroll Run". Select the month and year (e.g., October 2026). The system initializes in DRAFT and loads all active staff.
2
Input Attendance & Leaves:Enter total working days, days worked, and Loss of Pay (LOP) unpaid absences. Katixo auto-prorates basic and allowances accordingly.
3
Execute "Calculate":Click the "Calculate" button. The system evaluates EPF, ESI, state PT slab, and TDS for every staff member. Run status advances to CALCULATED. Staff can view draft payslips.
4
Approve & Disburse:Authorized business owner or HR manager clicks "Approve Payroll" (APPROVED). Download the bank NEFT/RTGS CSV file to upload directly into your corporate internet banking (HDFC, ICICI, SBI).

4. Automated General Ledger Journal Posting

Katixo eliminates manual journal entries. Clicking "Post to Ledger" automatically creates a balanced double-entry General Ledger journal:

Compound Journal Entry (Generated on Post):

• DEBIT: Salary Expense (Account 6000) — [Total Gross Earnings]

• DEBIT: Employer EPF Contribution (Account 6010) — [12% Employer Share]

• DEBIT: Employer ESI Contribution (Account 6020) — [3.25% Employer Share]

• CREDIT: Salary Payable (Account 2100) — [Net Payable to Employees]

• CREDIT: EPF Payable (Account 2110) — [Combined Employee + Employer PF]

• CREDIT: ESI Payable (Account 2120) — [Combined Employee + Employer ESI]

• CREDIT: Professional Tax Payable (Account 2130)

• CREDIT: TDS Payable (Account 2140)

Developer & API Integration Reference

JWT Bearer Required
GET/api/v1/payroll/runs
POST/api/v1/payroll/runs
POST/api/v1/payroll/runs/{id}/calculate
POST/api/v1/payroll/runs/{id}/approve
POST/api/v1/payroll/runs/{id}/post-journal
GET/api/v1/payroll/runs/{id}/bank-file