Payroll that posts itself

Every rate, and the date it was checked

Statutory rates change, and payroll software that hard-codes them keeps computing last year’s numbers with no sign that anything is wrong. Each table here carries the date it took effect and the date it was last verified, and a financial year with no table is refused rather than guessed.

EPF

12% of basic plus DA from each side, on a wage ceiling of ₹15,000. Of the employer’s share, 8.33% goes to the pension fund, capped at ₹1,250, and the remainder to provident fund.

EPF administration

0.5% of contributory wages with a floor of ₹500, plus EDLI at 0.5%, both charged on the wages contribution was computed on — not on full basic.

ESI

0.75% employee and 3.25% employer, on gross up to ₹21,000 — ₹25,000 where the employee has a disability. Each share is rounded up to the rupee separately.

Professional tax

By state, on the state’s own slabs, with the adjustment month where the state has one and the annual cap where it sets one.

Income tax, s.192

Both regimes on the year’s slabs, with the s.87A rebate, surcharge and its marginal relief, cess, and the tax deducted rounded under s.288B.

ESI runs on contribution periods, not on this month

The rule that catches most systems: an employee whose wages rise above the ceiling mid-period keeps contributing to the end of that period. April to September and October to March, so a rise in August contributes through September and a rise in October contributes through March.

Stop at the month the wages crossed and the contribution is short for the rest of the period — a shortfall the employer owes with interest, discovered at inspection rather than at payroll.

The rebate is not the same in both regimes

Under the new regime the s.87A rebate carries marginal relief, so income just above the threshold is not taxed more heavily than income at it. Under the old regime it does not — the rebate simply stops.

Applying relief to both is the natural mistake, and it under-deducts for every old-regime employee in a narrow band above ₹5,00,000. The employer’s books look right; the employee finds out at assessment, and pays interest on the difference.

Professional tax refuses what it does not know

Seven states are carried with their own slabs — Maharashtra, Karnataka, West Bengal, Gujarat, Telangana, Andhra Pradesh and Madhya Pradesh — along with the states that levy none at all.

Anywhere else, a payroll run stops. Deducting zero in an unrecognised state is the failure that hides best: the payslip looks complete, the net pay looks right, and the liability accrues quietly until somebody assesses it.

Prepare, approve, post — and only posting moves money

A run is prepared and can be looked at, corrected and prepared again without touching the ledger. Approval is a separate act. Posting is the one that writes the journal, and it writes it before anything else so a half-finished run cannot leave the books unbalanced.

Provident fund, ESI and professional tax each land in their own payable account, and the employer’s contributions as an expense — so what is owed to each authority is a balance you can read rather than a figure to be worked out at the end of the quarter.

What Forsja does not do

It does not file the ECR and it does not pay a challan. Those happen on the EPFO and ESIC portals under your establishment credentials, and any product that offers to do them for you is either holding those credentials or passing them to somebody else.

And it cannot issue Part A of Form 16. TRACES generates that from challans your deductor account has actually paid — a Part A from anywhere else is not valid. Forsja builds Part B in full, to attach to the Part A you download.

Common questions

Does Forsja file the EPF ECR and pay the challans?

No. It computes every figure the ECR needs and produces the return, and paying is done on the EPFO portal with your establishment credentials. The same is true of ESI. Software that offers to file on your behalf is either holding your portal credentials or routing through a third party, and both are worth knowing about before you agree to them.

Can it issue Form 16?

Part B, in full — the salary breakup, the exemptions, Chapter VI-A, the tax computed and the tax deducted. Part A cannot come from any payroll system: TRACES generates it from the challans your deductor account has actually paid, and a Part A produced anywhere else is not a valid one. Forsja builds Part B to be attached to the Part A you download.

Old regime or new?

Both, per employee, from their declaration — and the difference is not only the slabs. The s.87A rebate carries marginal relief just above the threshold under the new regime and does not under the old one. Applying it to both, which is an easy mistake to make, under-deducts for every old-regime employee in a narrow band above ₹5,00,000, and the shortfall lands on the employee at assessment.

What happens in a state you do not have professional tax rates for?

It refuses to run rather than deducting zero. Maharashtra, Karnataka, West Bengal, Gujarat, Telangana, Andhra Pradesh and Madhya Pradesh are carried, along with the states that levy no professional tax at all. Silently deducting nothing in an unrecognised state produces a payslip that looks finished and a liability that is not, and nobody notices until an assessment.

Does the salary journal reach the ledger?

It is posted to it, not exported for somebody to re-key. Approving a payroll run writes the journal — salaries, each statutory head to its own payable account, the employer contributions as an expense — and the ledger it lands in is the same one the trial balance and the P&L are drawn from. Preparing a run touches nothing; only posting does.

How are half-days and part-months handled?

Leave is held in hundredths of a day, so a half-day and a quarter-day are exact rather than rounded, and loss of pay is pro-rated on the days in the month rather than the working days — which is the convention that makes a month with more holidays cost the employee nothing extra. Money is held in paise throughout; nothing in payroll is a floating-point number.