Free Payroll Software India: A Practical Guide

Fuller guide: Free Payroll Software for Indian Small Business covers this topic in more depth.

Key takeaways

Free payroll software in India should cover one full monthly cycle, including attendance, payslips, statutory papers, and bank file.
No vendor offers unlimited free payroll; expect time-limited trials, capped free tiers, micro-business apps, or government filing portals.
Judge free tools on full headcount, branch support, contractor separation, statutory statements, and audit trails after attendance edits.
EPF or ESI inclusion depends on wage structure and rules; your accountant decides while software applies that decision consistently.

A garment unit in Tiruppur loses three days every month to salary day: muster rolls retyped, piece-rate counts reconciled against a production notebook, provident fund figures re-checked by hand, and the transfer still slipping past the 1st. Free payroll software India should mean one complete monthly cycle at zero cost — attendance in, payslips out, statutory figures and the bank file generated. If a tool stops short of that, it is a demo.

What "free" should actually cover

Short answer: Free should cover one complete monthly payroll cycle at zero cost: attendance captured, gross and net calculated, payslips issued, and statutory working papers plus bank file generated. A tool that stops before those outputs is a trial. Test any no-cost option against your own month, not its feature page.

Free should mean one full monthly cycle at no cost: attendance captured, gross and net calculated, payslips issued, and the working papers your accountant needs to file, with no card on file. A product that stops before the statutory outputs or the bank file is a trial wearing a friendlier label.

Judge every no-cost option against your own month rather than its feature page. Four questions do most of the work: can it hold your full headcount and every branch you operate from; can it separate on-roll staff from contractor labour; does it produce the contribution statements your accountant needs for EPFO and ESIC work; and does it keep an audit trail when an attendance entry is edited after the run. Whether a particular employee falls inside the EPF or ESI framework depends on their wage structure and the applicable rules — that call sits with your CA, and the software's job is to apply it consistently.

Free payroll software India compared: named options and their limits

Short answer: No vendor offers unlimited free payroll, because statutory filing and support cost money to run. What exists falls into four shapes: time-limited trials, permanent free tiers capped at small headcounts, micro-business salary apps with thin statutory output, and government portals that file returns but do not calculate pay.

No vendor offers an unlimited free payroll product, because statutory filing and support cost money to run. What exists falls into four shapes: a time-limited trial, a permanent free tier capped at a small headcount, a micro-business salary app with thin statutory output, and the government portals themselves, which file returns but do not calculate pay.

Plan names and limits move quickly. The comparison below reflects what vendors published on their own pricing pages and what the EPFO and ESIC portals state, last checked in June 2025. Re-verify each entry on the vendor's page, and check the current terms linked there, before you commit.

Tool (India)Free option as publishedFree-tier headcount capStatutory outputs on the free optionWhat to verify Zoho PayrollTime-limited trial; no permanent free tierNot headcount-based — the free window is time-basedPayslips, salary register, PF and ESI workings, TDS reports during the trialTrial length and the post-trial per-employee rate on the vendor's pricing page greytHRA no-cost entry tier for very small teams alongside paid plansVendor sets the cap; confirm the current numberPayslips and basic reports; PF ECR and ESI return files usually sit in paid plansThe cap, and whether your state's professional tax slabs are mapped RazorpayX PayrollA published free plan aimed at small teamsVendor-set employee ceiling; confirmPayslips and salary disbursement; statutory filing often through a paid tier or partnerWhether PF and ESI challans are included or billed separately KekaFree trial; no free tierNo cap during the trial windowFull payroll run including statutory workings while the trial lastsTrial length and how cleanly your data exports at the end sumHR, HROne, factoHRDemo or trial rather than a permanent free tierDemo seat limits varyVaries by module unlocked in the demoWhich modules the demo actually opens, and for how long SalaryBox, PagarBookFree or low-cost attendance-and-salary apps for micro-businessesMicro-business caps; confirmPayslip and salary register; full statutory return files usually outside the free scopeContractor handling, multi-branch attendance and data ownership EPFO employer portal, ESIC portal plus an Excel templateGenuinely freeNo capStatutory filing only — no payroll calculation engineWho maintains the master sheet when the person who built it leaves

How one payslip is built, line by line

Short answer: A payslip is earnings minus deductions, where some lines follow your wage structure and others follow statute or the employee's tax position. Basic, allowances, and most recoveries are yours to set; provident fund, insurance, professional tax, and TDS are applied according to rules your accountant confirms.

A payslip is earnings minus deductions, and in India only some of those lines are yours to set. Basic, allowances and most recoveries follow your own wage structure; provident fund, insurance contributions, professional tax and TDS follow statute or the employee's tax position. The breakdown below separates the two.

| Line | What it is | Set by | | --- | --- | --- | | Basic salary | As per the appointment letter | Your wage structure | | House rent allowance | A fixed share of basic | Your wage structure | | Other allowances | Conveyance, special allowance and similar | Your wage structure | | **Gross earnings** | Sum of the earnings lines above | Calculated | | Employee PF contribution | Applied to PF wages as defined under the EPF scheme | EPFO (epfindia.gov.in), checked June 2025 | | Employee ESI contribution | Applies only to employees covered under the ESI scheme | ESIC (esic.gov.in), checked June 2025 | | Professional tax | Levied only by states that have adopted it, under that state's own Act and schedule | The state government — Maharashtra's MGSTD portal and Karnataka's commercial taxes department are two examples; confirm your state's position with your CA | | TDS | Worked out from estimated annual salary income, declarations, proofs and regime | CBDT / Income Tax Department (incometax.gov.in), checked June 2025 | | **Net pay** | Gross earnings minus the deductions above | Calculated |

No percentages or ceilings are quoted here on purpose. They are revised by notification, so confirm the current figures with your CA or directly on the EPFO, ESIC and state portals before you run payroll.

Gather every input before you compare tools

Short answer: Collect attendance, leave, overtime, piece-rate counts, new joiners, exits, salary revisions, loan balances, and contractor labour details before evaluating any payroll tool. A Tiruppur garment unit cannot compare software fairly while its muster roll lives in one notebook and production counts in another. Clean inputs make every demo meaningful.

Software can automate only what you can describe. Before shortlisting anything, sit with the person who actually runs payroll — not the person who signs it off — and write down every input the run consumes, from attendance and leave to advances, identity data and exit settlements. That list, not a feature page, disqualifies most free options.

A typical 10-to-500-person Indian payroll pulls from all of these:

Attendance and muster: biometric exports, a supervisor's register, GPS app punches, or the contractor's own sheet for contract workers.
Leave: paper slips, comp-off, half-days, unpaid days and festival leave.
Overtime and shift pay: night shift allowance, weekly-off work, double shifts during a production push.
Variable pay: piece-rate counts in a garment unit, monthly targets in a sales team, production-linked incentive in a factory.
Statutory deductions: whether a person sits inside the EPF or ESI framework depends on their wage structure and the applicable rules — your CA decides, and the system should then apply it consistently.
Joining and exit: date of joining, probation, notice period, full-and-final settlement, gratuity eligibility arising from continuous service.
Deductions and identity data: salary advances, loan instalments, canteen recovery, plus PAN, Aadhaar, bank account and IFSC, UAN and ESIC insurance number.

Where free payroll tools commonly break

Short answer: Free payroll tools often break at statutory outputs, multi-branch attendance, contractor separation, and audit trails. They may produce payslips but stop before provident fund contribution statements, insurance returns, or the bank file. A tool that cannot hold your full headcount or track edited attendance entries will fail exactly when a salary run matters.

Free tiers are built for the simplest payroll: one location, salaried staff, no contractor labour. The moment your run includes contract workers, branch-wise attendance, statutory return files, or anyone other than the owner editing data, the free tier either blocks the step or quietly omits it — and the work returns to spreadsheets.

Contractor labour: contract workers often sit outside the employee master, so their attendance, rates and invoice reconciliation have nowhere to live.
Multi-branch attendance: a single muster roll for the whole company collapses a three-branch operation back into separate sheets.
PF ECR generation: the contribution file the EPFO portal expects is frequently a paid-plan feature, or missing entirely.
ESI return inputs: the employee-wise data the ESIC portal needs is often not exported in a usable shape.
Bank files: each bank wants a different upload format, and free tiers rarely produce more than a generic spreadsheet.
Audit trails: free tools often overwrite attendance edits silently, leaving no record of who changed what.
Role-based access: without separate permissions for editing salary, approving leave and viewing payslips, everyone who can log in can see everyone's pay.

Before your first automated run

Short answer: Before your first automated run, freeze the current month's inputs and reconcile one complete payroll manually against the software's calculation. Confirm employee master data, bank account details, branch mapping, and contractor records. Decide who approves attendance edits and how corrections enter the system. A parallel run catches mapping errors before salaries are actually disbursed.

Run one full month in parallel — software and your existing sheet side by side — before retiring the sheet. That month surfaces mapping errors while a fallback still exists, and it costs far less than discovering the same error after salaries have already been transferred.

Employee master matches reality: name as per the bank record, date of joining, department, location, bank account and IFSC.
Wage structure is split clearly into basic, allowances, and the components on which provident fund and ESI contributions are calculated.
EPF and ESI coverage is marked for each employee and reviewed whenever a wage structure changes.
Contract workers are separated from on-roll staff, with a recorded decision on whose payroll pays them.
Leave policy is encoded: types, accrual, carry-forward, encashment, and what happens on absence without intimation.
One attendance source is declared the truth, with a defined fallback for the day a device or phone fails.
Statutory outputs are tested: contribution statements, register formats, and the data your CA wants every month.
Access is restricted — who can edit salary, who can approve leave, who can only view.

When a spreadsheet is still the right answer

Short answer: A spreadsheet remains right when headcount is tiny, pay structures are simple, and the founder personally knows every employee. A five-person design studio in Kochi with fixed monthly salaries and no contractor labour can run payroll in a well-built sheet. Move to software once branches, contractors, or statutory filings multiply.

Manual payroll suits a small team on fixed monthly salaries, with no shift work, no attendance variance and no contractor labour, provided the sheet is well kept and someone else can run it when the usual person is away. The arithmetic is not the risk; the single point of failure is.

The economics shift when headcount reaches double digits, when several branches each keep their own register, when attrition is high enough that onboarding and full-and-final settlements happen every month, or when one admin person becomes the only route to a salary run. Those are the signals to automate, not the turn of a calendar year.

What a quiet salary day actually looks like

Short answer: A quiet salary day means attendance is already locked, payslips are generated, statutory figures match the accountant's working papers, and the bank file uploads without a scramble. Salaries reach accounts on time, and nobody spends the morning retyping muster rolls. That calm is the real test of whether your payroll process works.

The result is not a dashboard. It is a run that closes on the 1st with payslips already delivered, statutory figures ready for your accountant, contract and on-roll attendance reconciled, and no queue at the gate on the 2nd asking why the days are short.

Disclosure and example: a vendor product, AnudaHRM, was used as the reference point for the monthly-run structure described in this guide. It is a paid product priced per employee per month, not one of the free options compared above, and it should not be read as a recommendation. The Tiruppur, pharmacy-chain and other scenarios in this article are illustrative composites, not verified case studies. Nothing here is statutory advice — confirm applicable contributions, coverage and state levies with your CA and on the EPFO, ESIC and state government portals before running payroll.

Sources

Short answer: Sources include vendor pricing pages, EPFO and ESIC portal instructions, and payroll practitioners at Indian small businesses. Plan names and limits change, so re-verify every entry on the provider's page before committing. A chartered accountant remains the right authority on provident fund, insurance, and tax treatment.

Official references, checked on 15 October 2026. Statutory rates and thresholds change — confirm against the source before acting on them.

Frequently Asked Questions

Can payroll software handle both on-roll staff and contractor workers?

It can, if you map each contractor worker to their contractor and decide upfront whether they are paid through your payroll or the contractor's own. The software then keeps their attendance and wage data separate from your on-roll employees, which matters when you reconcile contractor invoices at month end.

Do we still need a CA if we use payroll software?

Yes. The software calculates and stores what you tell it to calculate, but the judgment calls — which statutory framework applies to a given wage structure, how a component is treated — sit with your CA or payroll consultant. Use the software to apply those decisions consistently and to produce the reports your CA needs each month.

How long does it take to move from Excel to payroll software?

The setup usually takes longer than the switch itself, because the real work is cleaning your employee master and deciding one attendance source of truth. Budget one full month of running both in parallel before you retire the spreadsheet.

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