Payroll · Process
Single Touch Payroll Process (India, 2026)
If you searched "single touch payroll process", you may have landed on something built for a different country, so let us be clear first. Single Touch Payroll (STP) is an Australian system where employers report pay and tax to the tax office each time they run payroll. India does not use STP, but the idea behind it, running payroll and its statutory reporting in one streamlined cycle, applies here too. This guide sets out that single, clean payroll process for an Indian employer.
- STP is Australian: Single Touch Payroll is an Australian reporting system; India has no equivalent called STP.
- The usable idea: run payroll and its statutory reporting as one streamlined monthly cycle.
- Indian filings differ: TDS on salary, PF, ESI and professional tax go to different authorities on different due dates.
- The cycle: collect inputs, compute pay, apply deductions, pay staff, deposit dues, file returns, reconcile.
- Deadlines matter: missed statutory deposits or returns attract interest and penalties, so keep a calendar.
- In-house or outsourced: a few employees can be managed in-house; outsourcing adds accuracy and timeliness as you grow.
01What Single Touch Payroll actually is
Single Touch Payroll is an Australian reporting system. Under it, an employer's payroll software sends salary, tax and superannuation information to the Australian Taxation Office every time staff are paid, rather than in a separate year-end report. The "single touch" means one action both pays staff and reports to the tax authority.
India has no system called Single Touch Payroll. So if you are an Indian employer, you cannot "do STP" here. What you can take from it is the principle: a single, integrated payroll run that computes pay, deducts the right statutory amounts, pays staff, and generates the records needed for reporting, all in one disciplined cycle.
Do not copy an Australian guide for India
STP rules, super rates and reporting frequencies are Australian and do not apply to Indian payroll. For India, follow the Indian deductions and due dates set out below, not the STP mechanics.
02The Indian equivalent idea
In India, payroll reporting is not a single live feed to the tax office. Instead, you run payroll monthly and then meet several separate reporting obligations on their own due dates: TDS on salary to the income tax department, Provident Fund and ESI to their authorities, and professional tax to the state.
A good Indian payroll process brings all of this into one monthly workflow so that, as with STP's spirit, a single run produces the payslips and the data for every statutory filing. The difference is that the filings go to different authorities on different dates, so you need a calendar as much as a system.
03The single payroll cycle, step by step
A clean monthly payroll cycle, handled as one process, looks like this:
- Collect inputs: attendance, leave, new joiners, exits, and any changes to salary or reimbursements.
- Compute gross pay: basic, allowances, overtime and bonuses for the month.
- Apply deductions: TDS on salary, employee PF, ESI where applicable, and professional tax.
- Arrive at net pay and generate payslips for each employee.
- Disburse salaries through the bank, usually by a bulk transfer file.
- Deposit the statutory dues and file the returns by their due dates.
- Record and reconcile so the month's payroll ties out for the year-end and for Form 16.
Doing these as one connected process, rather than scattered tasks, is the practical way to get the "single touch" benefit in India. For how pay components build up, see the payroll calculator with bonus.
04The statutory deductions you must handle
The deductions and filings are where Indian payroll gets its complexity. In outline:
| Item | Who it goes to | Nature |
|---|---|---|
| TDS on salary | Income tax department | Deducted monthly, deposited and reported in quarterly TDS returns |
| Provident Fund (PF) | EPFO | Employee and employer contributions, deposited monthly |
| ESI | ESIC | Where applicable by wage threshold, deposited monthly |
| Professional tax | State government | Where levied by the state, as per state slabs |
Each has its own portal, due date and return, so the single process must feed each one correctly. Missing a deposit or a return attracts interest and penalties, which is why a reliable calendar matters.
05In-house or outsourced
You can run payroll in-house with a spreadsheet or software, or outsource it. In-house works when you have few employees and someone who can keep up with the statutory changes. Outsourcing makes sense when the headcount grows, when deductions and states multiply, or when you simply want it off your plate and done correctly.
The honest point: for a handful of employees, a careful owner can run payroll and meet the filings without paying anyone. The value of outsourcing is accuracy, timeliness and someone accountable for the statutory deposits. For the fuller picture, see how to outsource payroll services.
06How Claw Tax helps
Claw Tax and Accounts is an online tax, GST and accounting service for India that connects you with a verified chartered accountant at a fixed, published price, with a Claw reviewer checking every filing before it is submitted.
If you have a few employees and the time to keep up with PF, ESI, TDS and professional tax deadlines, you can run the monthly cycle yourself. Where help earns its place is in getting every deduction right and every statutory deposit and return in on time, month after month, without surprises.
With Claw Tax and Accounts, a verified chartered accountant and team run the monthly payroll process, compute TDS, PF, ESI and professional tax, generate payslips, and file the returns, at a fixed published price, with a Claw reviewer checking the work and reminders before each due date. It is an online service, so it fits businesses that are comfortable working digitally.
This is a general guide, not tax advice; a verified professional handles your specifics.
07Frequently asked questions
Does India use Single Touch Payroll?
No. Single Touch Payroll is an Australian system where employers report pay and tax to the tax office each pay run. India has no equivalent. Indian employers run payroll monthly and meet separate reporting obligations, TDS on salary, PF, ESI and professional tax, each on its own due date to its own authority.
What is the payroll process in an Indian company?
In outline: collect attendance and changes, compute gross pay, apply deductions such as TDS, PF, ESI and professional tax, arrive at net pay and issue payslips, disburse salaries, deposit the statutory dues and file the returns by their due dates, then record and reconcile for the year-end and Form 16.
What statutory deductions apply to Indian payroll?
Commonly TDS on salary to the income tax department, Provident Fund to the EPFO, ESI to the ESIC where the wage threshold applies, and professional tax to the state where it is levied. Rates, thresholds and slabs are set by the respective authorities and the state, and should be confirmed as currently notified.
Can I run payroll myself for a small team?
Yes. For a handful of employees, a careful owner can run the monthly cycle and meet the filings using a spreadsheet or payroll software, without paying anyone. The trade-off is keeping up with statutory changes and never missing a deposit or return, which is where many small employers choose to outsource.
When does outsourcing payroll make sense?
When the headcount grows, when deductions and the number of states involved multiply, or when you simply want it handled accurately and on time by someone accountable for the statutory deposits. Outsourcing buys accuracy and timeliness; the monthly deadlines for PF, ESI and TDS are the main reason employers hand it over.