Payroll outsourcing means handing your monthly salary processing and statutory compliance — PF, ESI, Professional Tax and TDS — to a specialist instead of doing it in-house. For most Indian small businesses it costs a fixed monthly fee (far less than a full-time accountant), and it removes the risk of late filings and payslip errors. This guide explains what it includes, what it costs, and how to decide if it's right for you.
What is payroll outsourcing?
Instead of an in-house employee calculating salaries, cutting payslips, and filing returns, you give that entire job to an external provider. Each month you share employee details and any changes (new joiners, leave, bonuses); the provider runs the numbers, generates payslips, and deposits and files every statutory contribution on time. You stay in control — you approve the payroll before anyone is paid.
What's included in a payroll service
A complete payroll outsourcing service typically covers:
- Salary processing — gross-to-net calculation for every employee, including allowances and reimbursements
- Payslips — a clear monthly payslip for each employee, ready for loans, rent and tax filing
- Statutory deductions & filings — PF, ESI, Professional Tax and TDS calculated, deposited and filed by their due dates
- Compliance calendar — nothing missed: TDS by the 7th, PF and ESI by the 15th, plus periodic returns
- Records & registers — maintained so you're audit-ready
For the underlying rules behind these deductions, see our payroll basics guide.
How much does payroll outsourcing cost in India?
There's no single market rate — and you should be cautious of anyone who quotes one without asking about your business. The real cost depends on three things:
- Number of employees — more people means more calculations and payslips
- Number of states — Professional Tax and labour rules vary by state, so multi-state payroll is more involved
- Filings required — whether you need PF, ESI, PT and TDS, or only some of them
Providers usually charge a fixed monthly fee (sometimes with a small per-employee add-on). The key thing to compare is value: a full-time payroll/accounts hire costs tens of thousands of rupees a month, whereas an outsourced service is a fraction of that. She Assist includes monthly payroll within its plans, starting at ₹1,999/month — see packages & pricing for what each plan covers.
DIY vs. outsourcing: which is right for you?
With one or two employees, running payroll yourself is manageable. The tipping point comes as you grow and the filings multiply. Consider outsourcing when:
- You've crossed (or are about to cross) the PF (20 employees) or ESI (10 employees) thresholds
- You operate in more than one state
- You don't have an in-house accountant — or yours is stretched thin
- You've already missed a due date or had a payslip dispute
- Payroll is taking time you'd rather spend running the business
How to choose a payroll provider
Look for a provider that: gives you a transparent fixed price, handles all the statutory filings (not just salary transfers), keeps your data confidential, lets you approve every run, and gives you a real person to talk to — not just a portal. Bonus points if they also handle your wider compliance (GST, Udyam, labour law) so everything sits with one trusted partner.
Frequently asked questions
How much does payroll outsourcing cost in India?
There's no single fixed rate — it depends on your number of employees, how many states you operate in, and which filings (PF, ESI, PT, TDS) you need. Providers usually charge a fixed monthly fee, sometimes with a small per-employee add-on. She Assist includes monthly payroll within its plans starting at ₹1,999/month — a fraction of hiring a full-time accountant.
What does payroll outsourcing include?
The whole monthly cycle: gross-to-net salary calculation, payslips, and computing and filing PF, ESI, Professional Tax and TDS, plus maintaining registers and meeting every statutory due date. You approve the payroll; the provider executes and keeps you compliant.
Is it safe to outsource payroll?
Yes, with a reputable provider. Salary data stays confidential, you keep final approval over every payout, and you get a clear monthly record. For most small businesses it actually reduces risk, because specialists are less likely to miss a deduction or a deadline.
When should a small business outsource payroll?
When the filings start to multiply — typically once you cross the PF/ESI employee thresholds, operate in multiple states, or don't have an in-house accountant. If payroll is eating your time or you've missed a due date, it's time to hand it over.
Can payroll be outsourced for a fully online or remote business?
Yes. Payroll outsourcing is delivered entirely online, so it works for remote teams and businesses anywhere in India. You share employee details and attendance, approve the run, and the provider handles processing, payslips and filings digitally.