Key takeaways
- Free HR tools in India stop at headcount caps, single-location limits, or trial expiry, so verify vendor pricing pages.
- Manual HR reconciles muster rolls, contractor challans, WhatsApp leave and spreadsheets, breaking when shifts and contractors multiply.
- Paid HR software connects attendance to leave balances, overtime and payroll inputs, turning month-end reconstruction into simple review.
- Free tiers usually stop at attendance because vendors charge for payroll processing, statutory returns and multi-branch reporting.
Free HR software for small business in India exists at three genuinely zero price points, and each one stops somewhere. Zoho People runs a free-forever tier capped at a very small headcount. greytHR's free plan covers a small single-location team and pushes statutory payroll to paid editions. Keka's entry point is a time-limited trial rather than a permanent free plan. Confirm the current caps on each vendor's pricing page before you commit, because they change.
On the 28th of every month, an admin at a 40-worker garment unit in Tiruppur opens a register, a phone full of WhatsApp messages and a two-year-old spreadsheet, and rebuilds the month from scratch. Attendance comes from a biometric device whose data nobody has cleaned. Leave comes from messages that were deleted. Overtime comes from a supervisor's memory. Salary day is the 1st, and a delay costs goodwill with people who cannot afford to wait. Month-end reconciliation has quietly become a second job, and the search that follows is where most owners land.
Which Indian HR tools are actually free, and where does each one stop?
Short answer: Three Indian HR tools offer no-cost entry: one free-forever tier for a tiny team, one free plan for a single small site, and one time-limited trial. Each stops at a different point—headcount cap, statutory payroll, or trial expiry. Confirm current limits on the vendor's pricing page.
Three names come up most often when an Indian small business searches for free HR tools: Zoho People, greytHR and Keka. Zoho People's free tier is free forever but capped at a handful of employees. greytHR's free plan suits one small site. Keka offers a free trial measured in days, not a permanent free plan.
- Zoho People: the free-forever tier covers core employee records, attendance and leave for a very small team, and the headcount cap is the whole story. Once you cross it, paid plans take over. A shop with three or four staff never feels the cap; a 40-worker unit crosses it on day one.
- greytHR: the free plan handles attendance and basic employee data for a small single-location team. PF and ESI returns, professional tax and multi-branch reporting sit in the paid editions, so the free plan is a real product and a real ceiling at the same time.
- Keka: what you get is an evaluation window of fixed length. You can run a payroll cycle or two inside it, learn the interface, and then the window closes. Treat it as a test drive with an end date.
Excel and a paper muster roll remain the only permanent no-cost option, and you already own both. That makes the honest comparison three-way: free tiers, paid tiers, and the manual process, which charges no licence fee and a great deal of admin time.
What a manual HR process actually does, week by week
Short answer: Week by week, a manual HR process works for a small office but breaks when multiple shifts, contractors and WhatsApp leave must be reconciled by hand. In a 40-worker garment unit in Tiruppur, the admin reconciles a paper muster, a contractor challan, forwarded messages and a two-year-old spreadsheet before payroll.
A manual process holds up in a ten-person office and breaks somewhere between the third branch and the first salary day that lands on a Sunday. Four separate records exist in that Tiruppur unit, and the month-end job is reconciling all four by hand before payroll can begin.
Nothing fails loudly. The work simply moves onto the desk of the one admin who already handles billing, GST paperwork and the owner's phone calls. Here are the four sources she is reconciling.
- Muster roll: the supervisor keeps one on paper for the tailoring floor and a second for finishing, because a single register cannot hold two shift patterns.
- Contractor challan: two workers supplied by a labour contractor appear on neither roll, so their days get marked on the back of a delivery challan and priced from memory.
- WhatsApp leave: "sir, half day today" goes to the supervisor rather than the admin, gets forwarded a week later if someone remembers, and vanishes entirely when a phone is replaced.
- Spreadsheet: a two-year-old workbook holding prior months, rates and overtime rules, edited by one admin who is the only person who understands its formulas.
On the 28th, all four sources get reconciled by hand. A single mis-keyed attendance entry on day 12 throws off that worker's overtime for the rest of the month, and the correction surfaces only when he questions his payslip. The hours spent reconciling matter. The heavier cost is that nobody can answer how many people were on the floor last Tuesday without three phone calls.
What paid HR software changes — and why free tiers usually stop at attendance
Short answer: Paid HR software connects attendance to leave balances, overtime and payroll inputs, turning month-end into review instead of manual reconstruction. Free tiers stop at attendance because statutory returns, payroll processing and multi-branch reporting are the features vendors charge for. A field salesperson's GPS punch and a machine operator's biometric swipe then feed one daily view.
Paid HR software moves the month-end job from reconstruction to review: attendance is captured once and the same record feeds leave balances, overtime and payroll inputs without retyping. Free tiers stop short of that chain because payroll, statutory returns and multi-branch reporting are the parts vendors charge for.
- Attendance: a field salesperson's GPS punch and a machine operator's biometric swipe land in the same daily view, instead of two registers and a challan.
- Leave: the WhatsApp message becomes a request with a balance attached, so the admin sees who is already away before approving the next one — the most common cause of a short-staffed shift.
- Payroll inputs: days worked, paid leave, unpaid leave and overtime flow into the salary sheet, and your accountant receives figures rather than a puzzle.
- Employee KYC: joining documents, ID proofs and bank details sit against the employee record instead of in a folder that migrates between branches.
- Payslips and language: workers get a payslip they can read. In a unit where the finishing section reads one language and the owner another, that removes most of the "my salary is short" conversations that eat a supervisor's morning.
That chain is also where the free tiers end. Attendance and leave travel free. The moment days worked have to become a salary sheet with PF, ESI and professional tax attached, you are inside a paid plan. A business sitting below the free cap should stay there. A business past it is buying payroll, and should compare paid tools on payroll output.
Where software does not help — and where a register is still fine
Short answer: Software does not help when the real problem is a supervisor's verbal leave approval or a contractor's unrecorded worker. A paper register remains fine for a ten-person tailoring shop with one shift, no contractors, and payroll handled by a local accountant. The tool cannot fix a process nobody follows.
An eight-person shop with one room and one shift does not need an HR platform. Software earns its keep when you have multiple sites, two or three shift patterns, contract labour, or a payroll that takes more than a day to prepare. Below that line, a register costs nothing and stays just as accurate.
No platform fixes a supervisor who marks attendance from memory on Friday evening, or a branch manager who keeps a private diary of "adjustments" because he distrusts the system. If the person entering the data does not enter it daily, the tool produces wrong numbers faster and with more confidence than the register did. Repair the habit first, then buy the software.
An HR tool also does not replace your accountant. Statutory filing, and the choice between income tax regimes for a salaried employee, remain professional judgements that live outside your HR dashboard. What the platform owes your accountant is clean, dated, source-linked numbers instead of a reconstructed guess.
What Indian compliance asks of an HR tool — DPDP, ESI and professional tax
Short answer: Indian compliance asks an HR tool to protect employee personal data under DPDP, generate ESI contribution records, and calculate professional tax for each state. The tool should capture consent, support challan generation, and keep state-wise tax slabs updated. A Bengaluru startup with staff in two states needs all three in one payroll run.
Section 8 of the Digital Personal Data Protection Act, 2023 makes your business a data fiduciary for employee KYC — Aadhaar copies, bank proofs, address documents — with duties to collect for a stated purpose, keep records accurate, secure them with reasonable safeguards, erase them when the purpose ends, and intimate a personal data breach to the Data Protection Board.
Section 6 of the same Act requires consent tied to the purpose it was taken for. A cupboard of photocopied documents across two branches satisfies neither section, and uploading the same documents to a cloud tool without asking where they are stored and how they are deleted at exit creates the same problem in a newer format.
ESI coverage applies to employees below a monthly wage ceiling that the EPFO revises from time to time. The ceiling currently in force decides whether a new joiner sits on the ESI roll, and the EPFO circular is the source to check rather than a blog post or last year's spreadsheet. A payroll tool should read that ceiling from a maintained table your vendor updates, not from a rate someone typed in two years ago.
Professional tax is levied by each state under its own slabs and exemption limits, and states deduct on different cycles — Tamil Nadu collects it half-yearly while several other states deduct monthly. The same salary produces a different PT figure in Tiruppur and in Nagpur, so a platform carrying one hard-coded PT table will need manual correction in at least one of your branches.
Six checks before you sign up, written for Indian payroll
Generic HRMS checklists survive a city swap, which is how you spot them. These six are specific to Indian operations: contractor labour outside your rolls, multi-state professional tax, PF and ESI output your accountant can actually file, your existing biometric reader, payslip language, and a clean data exit.
- Contractor labour: can it hold contractor-supplied workers on a separate register with their own rates, or does it force them into the main payroll? In Tiruppur, two of forty workers arrive that way each month.
- Multi-state professional tax: can it store a different PT slab and deduction cycle per state, or does one table apply to every branch? Ask before your Nagpur branch opens, not after.
- PF and ESI returns: does it generate the return file your accountant uploads, or only a deduction figure? Request a sample output file during the demo.
- Your existing biometric device: can it pull punch data out of the reader already on your wall, or does the quote include new hardware? Ask for the supported device list in writing.
- Payslip language: a finishing section that reads Tamil needs a Tamil payslip. Check which languages the free tier includes and which the paid plan charges for.
- Data location and export: which region holds your employee records, and what does an export look like on the day you leave? Under the DPDP Act, that answer belongs to your business as much as to the vendor.
What to put in place in your first month
Short answer: In the first month, set up employee master data, one attendance source, clear leave rules, and a payroll calendar. Run one parallel payroll cycle against the manual process to catch gaps before salary day. A 25-person clinic in Kochi should start with clean joining dates and salary structures.
Start with attendance and leave for one site, on a free tier if your headcount fits inside the cap. Load the branch with the worst month-end, run the tool alongside the register for one full salary cycle, and compare both outputs on the 1st. Extend only if the comparison holds.
Switch payroll on after attendance and leave are stable, because payroll run on unreliable attendance is worse than payroll run on a register. Once it settles, the admin who spent four days reconstructing the month reviews a sheet instead of building one, and the owner gets an answer about Tuesday's headcount in ten seconds.
AnudaHRM offers a free 5-employee setup at anudahrm.com if you want to test GPS attendance on one real week, and if your headcount fits inside the Zoho People or greytHR free tiers, that comparison is where a small Indian business should start anyway.
Sources
Short answer: Sources for Indian HR software and compliance information include vendor pricing pages, EPFO and ESIC official portals, state professional tax department websites, and DPDP Act guidance from MeitY. Verify current limits and rules directly because they change. A local chartered accountant can confirm state-specific payroll treatment.
Official references, checked on 18 September 2026. Statutory rates and thresholds change — confirm against the source before acting on them.
Frequently Asked Questions
Is free HR software in India usable for a 50-person factory?
It can be, provided the free plan does not cap you at a headcount you will outgrow in a year and provided the attendance method matches your floor. Many free plans limit seats or hold back payroll and compliance outputs, so check what you lose as you grow. AnudaHRM, for example, starts with a free 5-employee setup and then charges a flat per-employee rate.
Can the software handle contract labour and multiple branches?
Only if the platform treats a contractor worker as a distinct category with their own attendance source and payment cycle, rather than forcing them into the payroll roll. Multi-branch support matters too — one login should show every site without asking each branch to maintain a separate sheet.
Will this replace our accountant?
No. Software prepares attendance, leave, overtime and salary inputs, and generates challan-ready reports, but your accountant still files returns and decides which income tax return and regime applies to a salaried individual. Treat the platform as the source of clean inputs, not as a replacement for professional filing.
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