Zoho Payroll India Setup Guide 2027: PF, ESI, TDS and Form 16

What do you need before setting up Zoho Payroll in India?

Gather your registration numbers and salary data first. Zoho's new user checklist asks for these details, and missing ones are the usual cause of a stalled setup.

If you joined mid-year, Prior Payroll lets you enter what you already paid, so TDS for the rest of the year is calculated on the full picture.

How do you set up Zoho Payroll step by step?

Follow the order of Zoho Payroll's Settings menu. Each step depends on the one before it.

1. 1Organisation profile: legal name, industry, business location and address.
2. 2Work locations: add each office or state where staff work, because professional tax and LWF depend on the state.
3. 3Statutory components: enter EPF, ESI and PT numbers and enable LWF per state where it applies.
4. 4Salary components: basic, HRA and other earnings, deductions, reimbursements and benefits.
5. 5Salary templates: reusable structures by grade or role, built on a percentage of CTC or on gross pay.
6. 6Taxes: PAN, TAN and TDS circle or AO code.
7. 7Pay schedule: work week, salary calculation method, first pay period and payday.
8. 8Users, roles, departments and designations, so approvals go to the right people.
9. 9Employees: import or sync from Zoho People, then assign templates.
10. 10Prior payroll, if needed, then your first pay run in parallel with your current process.

How does Zoho Payroll handle PF, ESI, professional tax and LWF?

Zoho Payroll has built-in statutory components for EPF, ESI, professional tax, Labour Welfare Fund and statutory bonus. You switch on the ones that apply and enter your registration numbers. Deductions then run inside each pay run.

Professional tax slabs come pre-configured for your state, and you can edit them. LWF is enabled or disabled state by state, and the deduction cycle (monthly, half-yearly or yearly) follows the state's rule. Employee-wise EPF contribution settings let you match company policy.

We are not listing contribution rates or wage ceilings here on purpose. They change, and some depend on how wages are defined for your company. Check the current rates on the EPFO and ESIC sites and with your CA, then confirm Zoho's settings match.

For consultants and freelancers, the India edition now includes contractor management with TDS under sections 194C and 194J, with profiles that can sync from Zoho People.

How are salary structures, payslips, TDS and Form 16 handled?

Salary templates hold your structure, and Zoho calculates TDS on salary from each employee's earnings and declarations. Employees submit IT declarations and proofs of investment in the employee self-service portal. Zoho's help explains how it supports the new tax regime, so ask your CA which regime default to set.

Payslips can carry your logo and custom headers, and Zoho can send them over WhatsApp as password-protected PDFs. Each quarter, Zoho generates the Form 24Q text file from employee, challan and salary data. You validate it with the Income Tax Department's File Validation Utility outside Zoho.

The Income-tax Act, 2025 came into force on 1 April 2026, according to the Income Tax Department. Its Form No. 130 is the certificate for tax deducted on salary under section 395. Zoho says it has already updated Zoho Payroll for the new forms.

Today, Zoho's Form 16 process works like this: you upload Part A from TRACES, Zoho merges it with a system-generated Part B, your tax deductor signs digitally, and you publish to the employee portal or by email. Check with Zoho and your CA how this changes for Form 130.

How do Zoho People and Zoho Books sync with payroll?

Zoho People sends data to Zoho Payroll in one direction: employee profiles, exited employees for final settlement, work locations and loss-of-pay details. Profiles sync daily at midnight, and you can sync instantly. After the attendance cut-off, push LOP from People (Leave, Reports, LOP Reports) or fetch it during the pay run, before approval.

Know the rules before you connect. You need Super Admin rights in People. Payroll's own Leave and Attendance module must be off and cannot be turned back on. Employees must be on a monthly pay period that matches People. Our Zoho People implementation service sets this up.

In Zoho Books, you map each component to an expense or liability account, and you can split EPF, ESI and PT liabilities into separate accounts. Choose accrual posting (last day of the pay period) or cash posting (payday). See our Zoho Books implementation page.

Where do the new labour codes fit in?

The Press Information Bureau announced that the Code on Wages, the Industrial Relations Code, the Code on Social Security and the Occupational Safety, Health and Working Conditions Code took effect on 21 November 2025. It said relevant provisions of existing labour Acts and rules continue during the transition.

Rules under the codes have been rolling out through 2026 at central and state level, and the details differ by state. Changes to how wages are defined can affect PF, gratuity and the shape of your salary templates. Zoho's public pages we reviewed do not describe a specific labour-code setting, so confirm the position with your CA before you change templates, then update Zoho to match. Keep a short written note of what your CA advised and when, so the next payroll admin knows why each template looks the way it does.

How can Flowpeak help with Zoho Payroll in India?

We are a registered Zoho partner with Zoho-certified consultants, based in Chennai. We set up Zoho Payroll with Zoho People and Zoho Books, build salary templates with your CA's input, and run parallel payrolls until the numbers match. India projects are quoted after a free call, with a fixed price, written scope and 30 days of free fixes after go-live. See our Zoho Payroll implementation service.

Frequently asked questions