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In this issue:

• Payroll Calculation, Processing, and Reporting in India
• The Social Security System in India
• The Applicability and Calculation of Gratuity in India
• Outsource Payroll Processing and Optimize your Business Operations

Businesses in India have to contend with the dual challenge of employment laws and regulations derived from multiple sources. Some of these sources are the constitution, labor statutes, judicial precedents, and collective and individual agreements.

In addition, labor matters come under the concurrent list of subjects in the Indian constitution. This means that labor regulations are in the jurisdiction of both federal and state governments, which have respectively enacted numerous laws on labor relations and employment matters.

These directly impact payroll considerations in the country as they shape the provisions for holidays, leaves, minimum wages, social security, and penalties for non-compliance. India’s tax environment can also be complicated for small and medium sized enterprises as well as foreign managers. Companies in India need to stay alert to the latest regulatory changes when computing payroll tax and deductions. These include personal income tax for employees, social security costs, and withholding tax.

In this edition, we discuss payroll processing and reporting in India, and the various regulations and tax norms that impact salary and wage computation. Further, we explain India’s complex social security system and gratuity law, and how it applies to companies. Finally, we describe the importance of IT infrastructure, compliance, and confidentiality when processing payroll in India.

This issue of India Briefing will inform readers about the most updated calculation of payroll in India, social security laws, matters governing gratuity payment, and the benefits of outsourcing payroll processing to professional third-party service providers.