Payroll, EPF & ESI in Excel: Salary, Compliance & Payslips
Last updated: 27 June 2026 · Covers EPF, ESI, professional tax, TDS, gratuity and bonus for Indian SMBs under the new Labour Codes (in force since 21 Nov 2025).
You can run complete, compliant Indian payroll in Excel — calculating gross salary, EPF (12% of basic+DA, capped at a ₹15,000 wage ceiling), ESI (0.75% employee + 3.25% employer up to ₹21,000 gross), professional tax, TDS on salary and net pay — using ordinary formulas like MIN, IF and VLOOKUP. A salary sheet plus a payslip template is enough for a small business; you only need software once headcount and statutory filings outgrow manual checking.
Key takeaways
- EPF: 12% employee + 12% employer of (Basic + DA), with the employer share split 8.33% to EPS (pension) and 3.67% to EPF — EPS is capped on a ₹15,000 wage ceiling (max ₹1,250/month).
- ESI: 0.75% employee + 3.25% employer of gross wages, applicable while gross is ₹21,000/month or less.
- Professional tax (PT) is a state subject — about 21 states levy it (Maharashtra, Karnataka, West Bengal and others); Delhi, UP, Haryana and several others do not. The constitutional cap is ₹2,500/year.
- TDS on salary (Section 192) uses slab rates; under the new regime, salaried income up to ₹12.75 lakh is tax-free (₹60,000 rebate + ₹75,000 standard deduction).
- New Labour Codes (effective 21 November 2025) require wages ≥ 50% of CTC and full-and-final settlement within 2 working days of an exit.
- Monthly deadlines: EPF and ESI by the 15th, TDS deposit by the 7th of the next month.
Fact box. For a covered employee, the core monthly payroll deductions in India are EPF at 12% of Basic + DA, ESI at 0.75% of gross (if gross ≤ ₹21,000), professional tax per the state slab (max ₹2,500/year), and TDS under Section 192 of the Income-tax Act. (Sources: EPFO; ESIC; state PT departments; Income Tax Department.)
How do I run payroll in Excel?
Payroll in Excel means building one salary sheet where each row is an employee and each column is a salary component or deduction, then generating a payslip per employee from that sheet. The standard monthly flow is six steps:
- Capture attendance — paid days, loss-of-pay (LOP) days and overtime for the month.
- Build the earnings side — Basic, DA, HRA, conveyance, special allowance → Gross salary.
- Compute statutory deductions — EPF, ESI, professional tax, TDS.
- Subtract deductions from gross → Net pay (in-hand).
- Generate payslips for each employee from the salary sheet.
- Deposit and file — EPF/ESI by the 15th, TDS by the 7th, with quarterly Form 24Q returns.
Each of these is a spoke article below with the exact formulas. The Excel advantage is that everything is offline, auditable cell-by-cell, and reconciles against your bank payout in one column.
Fact box. Under the Code on Wages (in force since 21 November 2025), "wages" — basic + DA + retaining allowance — must be at least 50% of total CTC. Allowances such as HRA and conveyance cannot together exceed 50% of CTC; any excess is added back into wages, which raises the base for PF, gratuity and bonus. (Source: Code on Wages, 2019; Ministry of Labour & Employment.)
What are the components of a salary structure?
A salary structure splits CTC (cost to company) into earnings and deductions. The earnings build up to gross; the deductions reduce gross to net.
| Component | Type | Typical basis |
|---|---|---|
| Basic | Earning | 40–50% of CTC (Labour Codes: basic+DA+retaining ≥ 50%) |
| Dearness Allowance (DA) | Earning | Often merged with basic in private SMBs |
| HRA | Earning | Commonly 40–50% of basic |
| Conveyance / special allowance | Earning | Balancing figure |
| EPF (employee) | Deduction | 12% of (Basic + DA) |
| ESI (employee) | Deduction | 0.75% of gross (if gross ≤ ₹21,000) |
| Professional tax | Deduction | State slab (max ₹2,500/year) |
| TDS | Deduction | Section 192 slab rate |
See the full layout with live formulas in Salary Sheet Format in Excel » and the reverse calculation in CTC vs In-Hand Salary Breakup ».
How is EPF calculated?
EPF (Employees' Provident Fund) is 12% of Basic + DA from the employee, matched by 12% from the employer. The employer 12% is split: 8.33% to the Employees' Pension Scheme (EPS) — capped on a ₹15,000 wage ceiling (so max ₹1,250/month) — and the balance 3.67% to EPF.
In Excel, the employee share is =ROUND(MIN(Basic_DA,15000)*12%,0) if you apply the ceiling, or simply =ROUND(Basic_DA*12%,0) if your establishment contributes on actual wages. Full breakdown including EDLI and admin charges: EPF Calculation in Excel ».
How is ESI calculated?
ESI (Employees' State Insurance) is 0.75% of gross wages from the employee and 3.25% from the employer, applicable while monthly gross is ₹21,000 or less (₹25,000 for employees with disability). Once an employee crosses the threshold mid-period, coverage continues to the end of the contribution period (April–September or October–March).
Excel formula for the employee share: =IF(Gross<=21000, ROUND(Gross*0.75%,0), 0). See ESI Calculation in Excel ».
How is professional tax handled across states?
Professional tax is levied by states, not the Centre, so the slab, frequency and due date differ by state. The annual cap is ₹2,500 per state (a constitutional limit). Maharashtra deducts up to ₹200/month (₹300 in February); Karnataka charges ₹200/month above ₹25,000 salary; West Bengal is effectively annual. Delhi, UP, Haryana, Punjab and several others do not levy PT at all.
Use a VLOOKUP against a per-state slab table. State-wise tables and the Excel method are in Professional Tax (State-Wise) Calculator ».
How is TDS on salary calculated?
TDS on salary under Section 192 is deducted monthly by averaging the employee's estimated annual tax over 12 months. Under the new regime (default), salaried income up to ₹12.75 lakh attracts zero tax after the ₹60,000 rebate and ₹75,000 standard deduction. The old regime keeps higher exemptions for those who claim deductions like 80C and HRA.
The Excel approach builds a slab table and uses cumulative IF/VLOOKUP logic. See TDS on Salary (Section 192) in Excel — New vs Old Regime ».
What about gratuity, bonus and attendance?
These are periodic, not monthly, but flow from the same salary data:
- Gratuity — payable after 5 years (1 year for fixed-term staff under the new SS Code). Formula: last drawn (Basic+DA) × 15 × completed years ÷ 26, tax-exempt up to ₹20 lakh. See Gratuity Calculation in Excel ».
- Statutory bonus — 8.33% to 20% of capped wages for employees earning ≤ ₹21,000/month. See Bonus Act Calculation in Excel ».
- Leave & attendance — drives paid days and LOP. See Leave & Attendance Tracker in Excel ».
When are payroll dues and returns filed?
The recurring statutory calendar for an employer is tight and largely lands mid-month:
| Obligation | Due |
|---|---|
| TDS deposit (salary) | 7th of the following month |
| EPF (ECR) + payment | 15th of the following month |
| ESI contribution | 15th of the following month |
| Professional tax | State-specific (monthly / half-yearly / annual) |
| Form 24Q (TDS return) | Q1 31 Jul · Q2 31 Oct · Q3 31 Jan · Q4 31 May |
| Form 16 to employees | 15 June (following FY) |
Full calendar with returns and late fees: EPF, ESI & PT Due Dates ».
How do I generate payslips?
A payslip is one employee's salary sheet row, formatted as a statement showing earnings, deductions and net pay. In Excel you build a payslip template that pulls a chosen employee's data with VLOOKUP or INDEX/MATCH, then print or export to PDF. Step-by-step: How to Generate Payslips from Excel ».
How Ankeshan helps: Ankeshan runs this entire flow inside Excel — salary sheet, EPF/ESI/PT/TDS, payslips and the filing calendar — with statutory rates kept current from our servers, so a rate or slab change doesn't silently break your sheet. (Ankeshan is launching soon — join the waitlist for a free downloadable payroll workbook, no sign-up.)
Frequently asked questions
Can I legally run payroll in Excel in India? Yes. There is no law mandating payroll software; you can compute and pay salaries from Excel. You must still deposit EPF, ESI, PT and TDS on time and file the required returns (Form 24Q, EPF ECR, ESI returns).
What is the EPF contribution rate in 2026? 12% of Basic + DA from the employee and 12% from the employer. The employer's 12% splits into 8.33% EPS (pension, capped on a ₹15,000 wage ceiling) and 3.67% EPF.
What is the ESI wage limit? ₹21,000 gross per month (₹25,000 for employees with disability). At or below this, ESI applies at 0.75% (employee) and 3.25% (employer).
Which states have no professional tax? Delhi, Uttar Pradesh, Haryana, Punjab, Rajasthan, Uttarakhand, Himachal Pradesh and Goa are generally treated as no-PT states, along with most union territories. Secondary sources are slightly inconsistent on Goa and Himachal Pradesh — confirm with your state's PT department if you operate there.
How much salary is tax-free under the new regime? For salaried individuals, income up to ₹12.75 lakh is tax-free under the new regime — the ₹60,000 Section 87A rebate makes income up to ₹12 lakh tax-free, plus a ₹75,000 standard deduction.
Do the new Labour Codes change my Excel payroll? Yes — wages (basic+DA) must be at least 50% of CTC, which raises PF, gratuity and bonus bases, and full-and-final settlement is now due within 2 working days of exit. Your salary structure may need restructuring.
Sources
- EPFO — epfindia.gov.in (contribution rates, ECR, wage ceiling).
- ESIC — esic.gov.in (contribution rates, wage threshold).
- Income Tax Department — incometax.gov.in (Section 192, slabs, Form 24Q/16).
- Ministry of Labour & Employment — labour.gov.in (Labour Codes, Code on Wages, gratuity, bonus).
- State commercial-tax / professional-tax departments (PT slabs).
General information, not professional advice. Verify on the official portal for your case. Reviewed by a Chartered Accountant; last updated 27 June 2026.
Related: Salary Sheet Format in Excel » · EPF Calculation in Excel » · ESI Calculation in Excel » · TDS on Salary in Excel » · EPF, ESI & PT Due Dates »