--- title: "HR Compliance in India: 2026 Checklist & Rules Guide" url: https://www.wisemonk.io/blogs/hr-compliance-in-india lang: en updated: 2026-11-09 --- [All Blogs](https://www.wisemonk.io/blogs) Written By [Wisemonk Team](https://www.wisemonk.io/authors/wisemonk-team) Category Workplace and Legal Compliance Read time 6 min read Last updated November 9, 2026 Share this blog # HR Compliance in India: 2026 Checklist, Rules and Deadlines [Add us as a preferred source](https://www.google.com/preferences/source?q=wisemonk.io) Get the full cost of hiring in India See salary, statutory costs and total employment cost in one place. [Calculate Now](https://www.wisemonk.io/tools/employee-cost-calculator) [G2 High Performer Summer 2026](https://www.g2.com/products/wisemonk/reviews) [G2 Best Results Summer 2026](https://www.g2.com/products/wisemonk/reviews) [G2 Users Love Us](https://www.g2.com/products/wisemonk/reviews) TL;DR - HR compliance in India combines central statutory dues, state-specific obligations, mandatory filings and documentation, so your load is always central plus state, not one instead of the other. - The four Labour Codes took effect on 21 November 2025 and their Central Rules were notified on 8 May 2026, though most state rules are still in draft. - Statutory dues run on fixed monthly dates, with salary TDS by the 7th and EPF and ESI by the 15th, while professional tax and labour welfare fund dates vary by state. - The EPF wage ceiling rose from Rs 15,000 to Rs 25,000 on 17 September 2026, and most first offences bring a written notice to comply before any penalty. Need help with HR compliance in India? ***[Talk to an expert!](https://www.wisemonk.io/contact)*** *Discover* ***[how Wisemonk creates impactful and reliable content.](https://www.wisemonk.io/our-content-methodology)*** Which HR rules does your company actually have to follow in India in 2026, now that the Labour Codes are live and the EPF ceiling has changed? HR compliance in India means meeting every central and state employment obligation at the same time, from Provident Fund and ESI to professional tax, TDS, POSH and the four Labour Codes. It matters because the obligations are shared between the Centre and each state, they run on fixed dates, and the penalties for missing them fall on the employer. If you are mapping the wider statute book alongside this, our guide to [labour laws in India](https://www.wisemonk.io/blogs/labor-employment-law-in-india) is a useful companion. This guide gives you the current rules, a practical checklist, state-by-state differences and the 2026 updates in one place. ## What is HR compliance in India? HR compliance in India is the practice of running every stage of employment, from offer letter to final settlement, in line with the country's labour, tax and workplace laws. Because India regulates employment at both the central and state level, compliance is rarely a single checklist; it is several overlapping obligations that apply at the same time. It helps to sort HR compliance into four working categories, so you can see what sits where before you build a process around it. ![Four categories of HR compliance in India.](https://www.wisemonk.io/_image?href=https%3A%2F%2Fcdn.sanity.io%2Fimages%2F2i41ja6l%2Fproduction%2F826c45ad477c2e606d22cc35431674b21cbd9c03-1920x1080.webp%3Fw%3D3200%26fm%3Dwebp%26q%3D90%26auto%3Dformat&w=1600&h=900&q=90&f=webp&fit=cover&position=center) HR compliance in India covers four categories involving statutory obligations, filings, remittances, documentation, and workplace policies. - **Central statutory compliance** covers nationwide obligations such as Provident Fund, ESI, gratuity, bonus and salary TDS. - **State statutory compliance** covers rules set by each state, such as the Shops and Establishments Act, professional tax and the labour welfare fund. - **Filing and remittance compliance** covers paying dues and submitting returns on fixed dates, from monthly challans to annual returns. - **Documentation and policy compliance** covers employment contracts, statutory registers, a POSH policy and the mandatory HR policies every Indian employer should maintain. Together these four categories are what an audit, an inspector or an acquirer will test. For the deep, law-by-law treatment of the statutory layer, see our guide to [statutory compliance in HR in India](https://www.wisemonk.io/blogs/statutory-compliance-in-hr-in-india); for the policy layer, our list of [mandatory HR policies in India](https://www.wisemonk.io/blogs/hr-policies-in-india) sets out what to document. ## Which laws govern HR compliance in India in 2026? The legal base of HR compliance in India now rests on the four consolidated Labour Codes, the central tax law, and a set of state and special-purpose statutes that sit outside the Codes. Knowing which law owns which obligation is what keeps your compliance calendar accurate. The table below shows how the four Labour Codes reorganised the older acts and what each now governs. What the four Labour Codes consolidated | Labour Code | What it consolidates | What it now governs | | --- | --- | --- | | Code on Wages, 2019 | Minimum Wages, Payment of Wages, Bonus, Equal Remuneration | Wage definition, minimum wages, bonus, timely payment | | Code on Social Security, 2020 | EPF, ESI, Gratuity, Maternity Benefit | PF, ESI, gratuity, maternity and other benefits | | Industrial Relations Code, 2020 | Trade Unions, Industrial Disputes, Standing Orders | Contracts, standing orders, dispute resolution | | OSH Code, 2020 | Factories, Contract Labour and other safety laws | Working conditions, safety, contract labour | The takeaway is that four Codes replaced a thicket of older acts, but they did not absorb everything. The Centre notified the detailed Central Rules under all four Codes on 8 May 2026, and you can track the official text on the [Ministry of Labour and Employment](https://www.labour.gov.in/labour-codes) site. Crucially, state [Shops and Establishments Act](https://www.wisemonk.io/glossary/what-is-the-shops-and-establishments-act) registrations, professional tax and the labour welfare fund were not consolidated, and three workplace statutes, the POSH Act, the Rights of Persons with Disabilities Act and the DPDP Act, sit entirely outside the Codes. For a plain-English version of the structure, our explainer on the [four Labour Codes](https://www.wisemonk.io/glossary/what-are-the-four-labour-codes) breaks each one down. ## What changed in HR compliance in India in 2026? 2026 is the first full year that Indian employers operate under the new statutory framework, so several changes affect what you pay and file. These are the updates worth building into your compliance calendar now, rather than discovering at an audit. India HR compliance updates to track in 2026 | Date | What changed | What it means for you | | --- | --- | --- | | 21 Nov 2025 | Four Labour Codes brought into force | The new framework is live; older acts stand repealed | | 8 May 2026 | Central Rules notified under all four Codes | Central-sphere establishments comply first; many states still drafting | | 17 Sep 2026 | EPF wage ceiling raised to Rs 25,000 (S.O. 5109(E)) | Higher PF, EPS and EDLI base for employees previously capped at Rs 15,000 | | 1 Apr 2026 | Income-tax Act 2025 renumbers salary TDS provisions | Update payroll references; the obligation itself is unchanged | | Phased to 2027 | DPDP Rules roll out in stages | Build employee-data consent and security into HR processes | The headline for payroll teams is the [Employees' Provident Fund](https://www.wisemonk.io/glossary/what-is-provident-fund-epf) ceiling moving from Rs 15,000 to Rs 25,000, confirmed on the [EPFO](https://www.epfindia.gov.in/) portal, which raises contributions for a large group of employees. The second is data protection: once the [DPDP Act, 2023](https://www.wisemonk.io/glossary/what-is-the-dpdp-act) rules are fully in force, HR will need lawful handling and consent for employee data. Treat 2026 as the year to re-baseline your calendar against the new rules, not the old acts. ## What does an HR compliance checklist for India include? A working HR compliance checklist for India combines statutory contributions, periodic filings and one-time registrations. The contributions below are the recurring core that applies to almost every employer once headcount thresholds are crossed. The table sets out who pays what, and the ceiling or threshold that switches each obligation on. India statutory contributions at a glance (2026) | Contribution | Employee share | Employer share | Key threshold | | --- | --- | --- | --- | | Provident Fund (EPF) | 12% of wages | 12% of wages | Mandatory at 20+ employees; wage ceiling Rs 25,000 | | Employees' State Insurance | 0.75% | 3.25% | Applies at 10+ employees; wage ceiling Rs 21,000 | | Professional tax | Varies by slab | Deduct and deposit | State-levied; cap around Rs 200 to 208 per month | | Salary TDS | Per tax regime | Deduct and deposit | All taxable salaries | | Statutory bonus | Not applicable | 8.33% to 20% | Eligible employees up to the notified wage limit | | Gratuity | Not applicable | Funded by employer | Payable after 5 years (1 year for fixed-term) | These figures should be read with each scheme's official guidance, including the [ESIC](https://www.esic.gov.in/) and [Income Tax Department](https://incometaxindia.gov.in/) portals, because thresholds and slabs change by notification. For clear definitions, see our glossary entries on [professional tax](https://www.wisemonk.io/glossary/what-is-professional-tax), [TDS on salaries](https://www.wisemonk.io/glossary/what-is-tax-deducted-at-source-tds) and [gratuity](https://www.wisemonk.io/glossary/what-is-gratuity). Beyond contributions, the checklist runs on three horizons, and it helps to see them separately. ![Three timelines for India's HR compliance checklist.](https://www.wisemonk.io/_image?href=https%3A%2F%2Fcdn.sanity.io%2Fimages%2F2i41ja6l%2Fproduction%2F4b3469c966646a72fa7f7c61a8833aa9daac3958-707x642.webp%3Fw%3D3200%26fm%3Dwebp%26q%3D90%26auto%3Dformat&w=1600&h=1453&q=90&f=webp&fit=cover&position=center) India's HR compliance checklist covers monthly contributions, periodic filings, registrations, statutory records, and employee lifecycle updates. - **Monthly:** deposit salary TDS by the 7th, PF and ESI by the 15th, and professional tax on the state's due date. - **Quarterly and annual:** file TDS returns, issue [Form 16](https://www.wisemonk.io/glossary/what-is-form-16), pay [statutory bonus](https://www.wisemonk.io/glossary/what-is-statutory-bonus) by 30 November, and submit annual returns under the Shops Act, POSH and factory laws. - **One-time and event-based:** complete registrations before the first hire, maintain statutory registers, and run joining and exit intimations as they occur. Run this checklist on a calendar, not from memory, because most compliance failures in India are missed dates rather than missing registrations. You can estimate a hire's full statutory cost, including [Employees' State Insurance](https://www.wisemonk.io/glossary/what-is-employee-state-insurance) and gratuity, with our [gratuity calculator](https://www.wisemonk.io/tools/gratuity-calculator) before you finalise a salary structure. ### See exactly where your India setup stands Run a quick check of your PF, ESI, professional tax and POSH obligations before an inspector or an acquirer does, and see the gaps in plain language. [Get your compliance scorecard](https://www.wisemonk.io/tools/india-employer-compliance-scorecard) [Talk to Our Team](https://www.wisemonk.io/contact) ## How does HR compliance vary across Indian states? India runs labour law by state, so two offices on the same payroll can have different professional tax, working-hour and labour-welfare obligations. This is the part most national checklists miss, and it is where multi-state employers get caught. The table below compares five of the most common hiring states. HR compliance differences across key Indian states | Requirement | Karnataka | Maharashtra | Telangana | Tamil Nadu | Delhi NCR | | --- | --- | --- | --- | --- | --- | | Professional tax (max/month) | Rs 200 | Rs 200 | Rs 200 | Rs 208 | None | | Shops & Establishments | Yes | Yes | Yes | Yes | Yes | | Daily hours limit | 9 hrs | 9 hrs | 8 hrs | 8 hrs | 9 hrs | | Labour welfare fund (per year) | Rs 150 | Rs 200 | Rs 100 | Rs 60 | Limited | | Annual returns | State form | State form | State form | State form | State form | The takeaway is that professional tax, the labour welfare fund, daily working hours and the exact annual return all change at the state line, so a single national template will not keep you compliant. State minimum wages also differ, so check the [minimum wage in India](https://www.wisemonk.io/glossary/what-is-the-minimum-wage-in-india) for each location. Three rules deserve special attention as you add states. - **POSH Act:** any workplace with 10 or more staff must form an Internal Committee and file an annual report, and the [POSH Act](https://www.wisemonk.io/glossary/what-is-the-posh-act) applies regardless of state. - **Four Labour Codes:** state-specific rules are being notified on different timelines, so each state's position must be tracked and applied, not assumed. - **Sector rules:** regulated sectors such as BFSI, healthcare and defence carry extra obligations that should be flagged early, before hiring. For leave, working days and public-holiday differences across states, our [state holiday and leave calendars](https://www.wisemonk.io/blogs/holidays-in-india) and the free [holiday and leave policy tool](https://www.wisemonk.io/tools/holiday-and-leave-policy-tool) help you build a compliant, state-correct policy. ## What are the penalties for HR non-compliance in India? Penalties for HR non-compliance in India range from modest first-offence fines to imprisonment for the most serious failures, and many online guides overstate the routine cases. Understanding the real exposure helps you prioritise. The table below summarises common failures. Indicative penalties for HR compliance failures | Failure | First offence | Repeat or serious case | | --- | --- | --- | | Wage or minimum-wage breach (Code on Wages) | Fine, usually with a written notice to comply | Higher fine and possible imprisonment | | Late PF or ESI deposit | Damages and interest on the delayed amount | Prosecution for continued default | | Non-remittance of deducted PF, ESI or TDS | Treated as a serious offence | Imprisonment and fine | | No POSH Internal Committee | Monetary penalty | Higher penalty and licence cancellation on repeat | The important nuance is that for a first offence under the Code on Wages, the Inspector-cum-Facilitator must generally give written notice and a chance to comply before prosecuting, so a genuine, promptly corrected slip is usually a cost event, not a conviction. The serious exposure is wilful non-remittance of money already deducted from employees, which can carry imprisonment. The other high-risk area is contractor misclassification; if a contractor is really an employee, back-dated PF, ESI and tax liabilities follow, so test every engagement with our [contractor misclassification quiz](https://www.wisemonk.io/tools/misclassification-quiz). ## How can you stay compliant while hiring in India? Once you understand the obligations, the practical question is how to run them reliably, and there are four common routes depending on your size and whether you have an Indian entity. Choosing the right one early avoids expensive rework later. - **In-house HR and payroll:** suits established Indian companies with a dedicated compliance team and the bandwidth to track state-by-state change. - **Payroll outsourcing:** hands the calculations, filings and remittances to a specialist while you keep the employment relationship; our view of the leading [payroll outsourcing companies in India](https://www.wisemonk.io/blogs/payroll-outsourcing-companies-in-india) and how [payroll in India](https://www.wisemonk.io/payroll-in-india) works is a good starting point. - **Setting up an Indian entity:** gives full control but takes time and ongoing statutory upkeep, as our guide to [registering a company in India](https://www.wisemonk.io/company-registration-in-india) explains. - **Employer of Record (EOR):** lets a company employ staff in India compliantly without its own entity, with the EOR holding the registrations and running compliance. For companies without a local entity, an EOR is usually the fastest compliant route, though you should still watch [permanent establishment risk](https://www.wisemonk.io/tools/permanent-establishment-risk-quiz) separately. If you are new to the market, our complete guide to [hiring in India](https://www.wisemonk.io/blogs/hiring-in-india) walks through the steps end to end. ## How can Wisemonk help with HR compliance in India? [Wisemonk](https://www.wisemonk.io/) is an [India-native Employer of Record (EOR)](https://www.wisemonk.io/eor) provider that handles the full HR compliance lifecycle for teams in India, allowing companies to hire, pay, and manage employees without setting up a local entity or building an in-house compliance function. [Wisemonk EOR](https://www.wisemonk.io/services/employer-of-record) acts as the legal employer on your behalf, managing employment contracts, employee onboarding, payroll, statutory benefits, and central and state-level compliance obligations. Trusted by 300+ global companies, Wisemonk helps businesses simplify workforce management, reduce compliance risks, and focus on growing their teams in India. Here is how that works in practice. 1. **Hiring and onboarding:** Wisemonk acts as the legal employer, so it issues compliant offer and appointment letters, collects statutory documents, runs background verification, and completes PF, ESI and professional-tax registration for each new joiner. This removes the paperwork and classification risk that causes disputes and back-dated liabilities later, and it gets people productive in days rather than weeks. See how we [hire employees in India](https://www.wisemonk.io/hire-employees-in-india) and run [background verification](https://www.wisemonk.io/background-verification-companies-in-india) before day one. 2. **Payroll and statutory filings:** Wisemonk calculates gross-to-net salary, deducts and deposits PF, ESI, professional tax and TDS, and files every monthly, quarterly and annual return on its due date. Because missed dates, not missing registrations, cause most penalties, this takes the single biggest compliance risk off your plate and keeps challans and returns audit-ready. Learn how we [run payroll and salary payments in India](https://www.wisemonk.io/how-to-pay-employees-in-india), and model a hire's fully loaded cost with our [employee cost calculator](https://www.wisemonk.io/tools/employee-cost-calculator). 3. **Benefits administration:** Wisemonk enrols employees in ESI or group health cover, manages gratuity and other statutory benefits, and adds supplementary perks so your India team gets a competitive, market-standard package. This solves the problem of designing compliant benefits without learning each scheme yourself, and it supports retention in a tight talent market. Explore our [flexible benefits for India payroll](https://www.wisemonk.io/india-payroll/flexible-benefits) and the [tax benefits under NPS](https://www.wisemonk.io/tax-benefits-under-nps) employees can opt into. 4. **Contractor engagement:** For teams that use contractors rather than employees, Wisemonk drafts [compliant contractor agreements in India](https://www.wisemonk.io/contractor-india/compliant-contracts), manages invoicing and payments, and handles [GST and TDS compliance for contractors](https://www.wisemonk.io/contractor-india/india-gst-and-it-compliance). This reduces the misclassification exposure that can trigger back-dated PF, ESI and tax, and keeps every contractor payment clean and documented. 5. **Ongoing compliance and employee management:** As the [Employer of Record in India](https://www.wisemonk.io/eor), Wisemonk maintains your registrations, POSH committee and statutory registers, tracks state-by-state rule changes, and manages the full lifecycle through to exit and full-and-final settlement. If you are weighing this against setting up your own entity, our [EOR versus entity calculator](https://www.wisemonk.io/tools/eor-vs-entity-calculator) shows the break-even, so the outcome is a current, audit-ready compliance posture with one accountable point of contact. Taken together, these services turn HR compliance from a recurring risk into a managed service with a single point of contact. Wisemonk was built in India and focuses on India today; where we reference other markets, that expansion is planned rather than an existing capability. ### Hire and run your India team without a compliance backlog We register, enrol, file and remit for your India employees, so you can expand without an entity and without chasing statutory deadlines every month. [Talk to an Expert](https://www.wisemonk.io/contact) [See Pricing](https://www.wisemonk.io/pricing) ### What do clients say about working with Wisemonk? > We've been using WiseMonk to support our India team for the past six months, and the experience has been excellent. They've handled everything from payroll and statutory compliance to equipment procurement and benefits enrollment — all with a level of responsiveness and professionalism that makes managing a remote India team from Canada feel seamless. Nileena and the team are always quick to reply and proactive about flagging anything we need to know. We'd happily recommend WiseMonk to other companies looking to hire and manage talent in India. > \- ***Monika Russell****, CFO, Minehub, Canada* > We came across Wisemonk and met with the CEO and staff to explain our situation, and were very impressed with their customer-focused approach to their business. Wisemonk onboarded all of my employees in one or two days. They paid my employees' salaries on the day after my payment cleared. Needless to say, my employees and I were very satisfied with their service then and remain so over a year later. We are an American company, so I was very happy to see that they have a US bank account where I can make ACH payments to minimize bank charges. All salary payments are timely. They worked directly with my employees to enroll them in the health care program and explain any coverage-related issues. The best part is that we get to work with a dedicated person assigned to our company. I would highly recommend Wisemonk and think of them as our Indian HR department. > \- ***Frank Menes****, Founder & CEO, Senem RFP* ## Frequently asked questions **What is HR compliance in India?** HR compliance in India is the practice of running employment in line with central and state labour, tax and workplace laws, from Provident Fund, ESI and professional tax to POSH and the four Labour Codes. It spans contributions, filings, documentation and policies across the full employee lifecycle, and the obligations fall on the employer. **What are the types of HR compliance?** There are four practical types that Indian employers should track together, and seeing them separately makes the workload clearer. - Central statutory compliance, such as PF, ESI, gratuity and bonus. - State statutory compliance, such as the Shops Act, professional tax and the labour welfare fund. - Filing and remittance compliance, meaning paying dues and submitting returns on time. - Documentation and policy compliance, such as contracts, registers and a POSH policy. Keeping all four current is what a compliance audit actually tests. **What are the EPF and ESI contribution rates in India in 2026?** EPF is 12 percent of wages from both the employee and the employer, and the wage ceiling rose to Rs 25,000 from 17 September 2026. ESI is 0.75 percent from the employee and 3.25 percent from the employer, applying where the employee's monthly wage is within the ESI ceiling. **Is HR compliance the same in every Indian state?** No. Central rules such as PF, ESI and TDS apply nationwide, but each state sets its own Shops and Establishments Act, professional tax slabs, labour welfare fund and working-hour limits, so a multi-state employer must apply each state's rules separately. **What are the latest changes in HR compliance for 2026?** The four Labour Codes are in force since 21 November 2025, their Central Rules were notified on 8 May 2026, the EPF wage ceiling rose to Rs 25,000 on 17 September 2026, and the DPDP data-protection rules are rolling out in stages. Most states have yet to notify their own rules under the Codes. **What is the penalty for late PF or ESI deposit in India?** Late deposits attract damages and interest on the delayed amount, and continued default can lead to prosecution. The more serious offence is failing to remit contributions already deducted from employees, which can carry imprisonment, so deducted dues should always be deposited on time. **Can a company outsource HR compliance in India?** Yes. Employers can use payroll outsourcing to hand over calculations and filings, or an Employer of Record to become the legal employer and run compliance end to end. Reviewing [employee benefits in India](https://www.wisemonk.io/blogs/employee-benefits-in-india) and comparing an EOR with a [PEO in India](https://www.wisemonk.io/peo-india) helps you choose the right model, and an [income tax calculator](https://www.wisemonk.io/tools/income-tax-calculator) helps you model the salary side. Share this blog ## Related Blogs ### [India Expansion and PE Exposure: What US Founders Watch](https://www.wisemonk.io/blogs/india-pe-exposure-us-founders) 9 min read ### [India Tax Questions UK Enterprises Must Resolve First](https://www.wisemonk.io/blogs/india-tax-questions-uk-enterprises) 9 min read HR Management and Strategy ### [How to Convert Contractors to Employees in India](https://www.wisemonk.io/blogs/how-to-convert-contractors-to-employees-in-india) 5 min read Contractor Payments & Management ### [Tax Compliance for Contractors in India: 2026 US Guide](https://www.wisemonk.io/blogs/tax-compliance-in-india-comprehensive-guide) 7 min read ## Ready to build your India team? Tell us who you're looking to hire. We'll walk you through exactly how the setup works for your company, your timeline, and your budget. [Talk to an Expert](https://www.wisemonk.io/contact) [Get Started](https://hire.wisemonk.io/)