Looking for expert help with Payroll compliance for Hyderabad startups PF ESI professional tax? The team at Tax Garden, based in Kondapur, Hyderabad, helps Indian SMEs stay compliant. End-to-end filings, notices, and deadline tracking, all in one place.
What payroll compliance does a Hyderabad startup need? Telangana professional tax and TDS on salary apply from your first hire above Rs 15,000 a month. ESI applies once 10 or more persons are employed, and PF once 20 or more employees are employed. From 17 September 2026, PF is calculated on basic plus DA up to Rs 25,000 a month.
Key Takeaways
- Headcount decides the laws: PT and TDS from the first hire, ESI at 10 persons, PF at 20 employees (First Schedule, Code on Social Security, 2020).
- Telangana PT is Nil up to Rs 15,000 a month, Rs 150 up to Rs 20,000 and Rs 200 above that.
- ESI covers employees earning up to Rs 21,000 a month: 3.25% employer, 0.75% employee.
- PF is 12% from each side on wages up to Rs 25,000 a month from 17 September 2026 (S.O. 5109(E)).
- Due dates: TDS on salary by the 7th, PF and ESI by the 15th, Form 138 every quarter, Form 130 by 15 June.
Most Hyderabad startups run payroll on a spreadsheet for the first year. That works until a compliance trigger is crossed without anyone noticing: the 10th hire brings in ESI, the 20th brings in PF, and a salary revision pushes an intern into the professional tax bracket. Each missed month builds interest, and an employee's share deposited late is lost as a business deduction.
This checklist is organised by headcount, so you can see which law applies at each stage of growth in Kondapur, HITEC City or anywhere else in Telangana.
Which payroll law applies at what headcount?
Since 21 November 2025, PF and ESI coverage comes from the Code on Social Security, 2020. Its First Schedule sets the applicability thresholds. Professional tax is a Telangana State levy, and TDS on salary is under the Income-tax Act, 2025.
Comparison
Payroll Compliance by Headcount, Hyderabad, FY 2026-27
| Law | When it applies | Who pays | Monthly deadline |
|---|---|---|---|
| Telangana professional tax | Any employee paid above Rs 15,000 a month | Deducted from the employee, paid by the employer | Monthly return in Form V with proof of payment |
| TDS on salary (Section 392) | Any employee whose taxable salary crosses the exemption limit | Deducted from the employee | Deposit by the 7th; Form 138 every quarter |
| ESI (Code on Social Security, Chapter IV) | 10 or more persons employed (not seasonal factories) | Employer 3.25%, employee 0.75% of gross wages up to Rs 21,000 | 15th of the following month |
| EPF (Code on Social Security, Chapter III) | 20 or more employees employed | Employer 12%, employee 12% of basic plus DA up to Rs 25,000 | 15th of the following month (ECR) |
Source: Code on Social Security, 2020, First Schedule; S.O. 5109(E) dated 17 September 2026; Telangana professional tax Schedule, Entry 1; Income-tax Act, 2025, Section 392; Income-tax Rules, 2026, Rule 218(2)
Stage 1: Your first hire
Two registrations are needed before the first salary.
Telangana professional tax registration. The employer deducts professional tax from the salary of every employee paid above Rs 15,000 a month and pays it to the State. You register in Form I under Rule 3 of the Telangana professional tax rules. Registration is per assessing authority area, so an office in Kondapur and a second one in Secunderabad may need separate registrations. A late registration costs Rs 10 to Rs 20 a day for employers. Our Telangana PT registration walkthrough covers the forms.
The company itself is also enrolled separately under Rule 4 (Form II) and pays its own professional tax each year before 30 June.
Comparison
Telangana Professional Tax on Salary (Entry 1)
| Monthly salary | PT per month | PT per year |
|---|---|---|
| Up to Rs 15,000 | Nil | Nil |
| Rs 15,001 to Rs 20,000 | Rs 150 | Rs 1,800 |
| Above Rs 20,000 | Rs 200 | Rs 2,400 |
Source: Telangana professional tax law, Schedule, Entry 1 (tgct.gov.in)
The slab is fixed by the salary for that month. Late payment carries interest of 2% a month or part of a month, and a late monthly return carries a penalty of Rs 5 to Rs 100 a day. The full rate and penalty reference is in our professional tax Telangana guide.
TAN and TDS on salary. Section 392 of the Income-tax Act, 2025 (old Section 192) requires the employer to deduct tax at the average rate on each employee's estimated salary for the year. You need a TAN (Form 135 under Rule 216 of the Income-tax Rules, 2026) before the first deduction. TDS is deposited by the 7th of the next month, reported in Form 138 every quarter, and certified to the employee in Form 130 by 15 June. Our TDS return filing guide for Hyderabad businesses lists the due dates.
Stage 2: The 10th person brings in ESI
Once 10 or more persons are employed, the ESI chapter of the Code on Social Security, 2020 applies. A few points startups miss:
- The count is of persons employed, not only those earning under the wage ceiling. Your 10 senior developers count towards the threshold even though none of them is covered.
- Coverage is for employees whose gross wages are up to Rs 21,000 a month (Rs 25,000 for persons with disability). Gross wages include overtime.
- The employer pays 3.25% and the employee 0.75% of gross wages, by the 15th of the following month.
- An employee who crosses Rs 21,000 in the middle of a contribution period (April to September or October to March) stays covered until that period ends.
Example: a 12-person startup in Kondapur. Its office assistant earns Rs 18,000 a month gross. ESI applies: the employee pays 0.75% x Rs 18,000 = Rs 135, and the employer pays 3.25% x Rs 18,000 = Rs 585. Professional tax for Rs 18,000 is Rs 150. A developer on Rs 60,000 a month isn't covered by ESI, pays Rs 200 PT, and has TDS deducted on salary. PF isn't mandatory yet, because the startup has fewer than 20 employees.
For registration steps and benefits, see our ESI employer guide.
Stage 3: The 20th employee brings in PF
The EPF chapter applies to every establishment in which 20 or more employees are employed. Contributions are 12% from the employee and 12% from the employer, on basic pay plus DA.
The ceiling changed on 17 September 2026. Notification S.O. 5109(E) raised the mandatory wage ceiling from Rs 15,000 to Rs 25,000 a month. For an employee on basic plus DA of Rs 25,000 or more, the EPFO's FAQ on the change gives this monthly split:
Comparison
PF Contributions at the Rs 25,000 Ceiling (from 17 September 2026)
| Component | Rate | Amount per month |
|---|---|---|
| Employee share to EPF | 12% | Rs 3,000 |
| Employer share to EPS (pension) | 8.33% | Rs 2,083 |
| Employer share to EPF | 3.67% (balance of 12%) | Rs 917 |
| EDLI (employer) | 0.50% | Rs 125 |
| EPF administration charges (employer) | 0.50% | Rs 125 |
Source: S.O. 5109(E) dated 17 September 2026; EPFO FAQs on the wage ceiling (Q13)
The employer's total cost at the ceiling is Rs 3,250 a month per employee on top of the salary. Startups that set basic pay at a low share of CTC should check how the wage definition under the labour codes affects this; our PF and ESI contribution guide works through the numbers.
The monthly payroll calendar
Comparison
Payroll Compliance Calendar for a Hyderabad Startup
| When | What | Law |
|---|---|---|
| Every month, by the 7th | Deposit TDS on last month's salaries (30 April for March) | Income-tax Rules, 2026, Rule 218(2) |
| Every month, by the 15th | Pay ESI contributions and file the PF ECR | Code on Social Security, 2020 and schemes under it |
| Every month | Pay professional tax and file Form V with proof of payment | Telangana professional tax law |
| 31 Jul, 31 Oct, 31 Jan, 31 May | File Form 138 (salary TDS statement) | Income-tax Rules, 2026, Rule 219(4) |
| By 15 June | Issue Form 130 (old Form 16) to each employee | Income-tax Rules, 2026, Rule 215(1) |
| Before 30 June | Pay the company's own professional tax enrolment amount | Telangana professional tax law, Section 10 |
Source: As cited in each row
The Telangana Commercial Taxes portal shows the due date for each monthly PT payment and return when you file.
Why late PF and ESI deposits cost more than interest
The employee's share of PF and ESI is deducted from salary, so it's the employee's money held by you. It is allowed as a business expense only if it is deposited by the due date under the PF or ESI law. The Supreme Court confirmed this in Checkmate Services (2022). A startup that pays its PF a week late every month can lose the deduction for the whole year's employee share. Our guide to late PF and ESI deposits and the tax deduction explains how it is computed.
How Tax Garden runs payroll for Hyderabad startups
From Kondapur, we process salaries, deduct and deposit TDS, PT, ESI and PF every month, file Form 138 each quarter and issue Form 130 at year end. We also track your headcount so ESI and PF registrations happen before the 10th or 20th hire, not after. See our payroll management service, or our tax compliance services in Hyderabad if you want GST, TDS and ITR handled by the same team.
Frequently Asked Questions
When does a Hyderabad startup have to register for ESI?
When 10 or more persons are employed. The First Schedule to the Code on Social Security, 2020 applies the ESI chapter to every establishment in which ten or more persons are employed, other than a seasonal factory. Employees earning gross wages up to Rs 21,000 a month are covered, and the employer pays 3.25% while the employee pays 0.75%.
When is PF registration mandatory for a startup?
When 20 or more employees are employed. The First Schedule to the Code on Social Security, 2020 applies the Employees' Provident Fund chapter to every establishment in which twenty or more employees are employed. A startup below 20 can still opt in voluntarily.
What is the PF wage ceiling from September 2026?
Rs 25,000 a month of basic pay plus DA, from 17 September 2026 under notification S.O. 5109(E). It was Rs 15,000 before. At the full Rs 25,000, the employee pays Rs 3,000 and the employer pays Rs 2,083 to the pension scheme, Rs 917 to EPF, plus Rs 125 EDLI and Rs 125 administration charges, as per the EPFO's FAQ on the change.
How much professional tax is deducted from salary in Telangana?
Nil up to Rs 15,000 a month, Rs 150 a month for salary from Rs 15,001 to Rs 20,000, and Rs 200 a month above Rs 20,000, under Entry 1 of the Schedule to the Telangana professional tax law. The maximum for a salaried employee is Rs 2,400 a year.
Does a startup with 5 employees need any payroll registration in Hyderabad?
Yes, two. The employer must register under the Telangana professional tax law as soon as it pays anyone above Rs 15,000 a month, and must deduct TDS on salary under Section 392 of the Income-tax Act, 2025 for anyone whose taxable salary crosses the exemption limit, which needs a TAN. ESI and PF start at 10 and 20 persons respectively.
What is the due date for PF and ESI payments?
The 15th of the month following the wage month for both. TDS on salary is deposited by the 7th of the following month (30 April for March) under Rule 218(2) of the Income-tax Rules, 2026.
Work with the Trusted Payroll and PF/ESI compliance in Kondapur, Hyderabad - Tax Garden for pay your team and file PT, ESI and PF on time every month.
Frequently Asked Questions: Tax Services in Kondapur & Hyderabad
What makes Tax Garden a preferred GST consultant in Kondapur?
Tax Garden is ISO 9001:2015 certified and backs every engagement with Kavach, our ₹50,000 error-protection cover. Published monthly plans, with the fee shown before you sign up, make us a compliance partner for startups and SMEs in Kondapur's HITEC City corridor.
Why is Tax Garden a trusted tax compliance partner in Hyderabad?
Trust comes from three pillars at Tax Garden. First, transparency: you know the exact fee before you sign up, and it never changes mid-year. Second, certified expertise: our compliance team is qualified, and the firm holds ISO 9001:2015 certification. Third, accountability: Kavach, our unique error-protection plan, covers up to ₹50,000 in service charges for any clerical mistake made by our team.
Is there a reliable tax consultant near me in Kondapur?
Yes. Tax Garden's office is in Kondapur itself (CWS One Building, Hanuman Nagar). You can book an in-person consultation or get everything done fully online via WhatsApp and our client portal. We serve walk-in clients by appointment and remote clients across all of Hyderabad and Telangana.
I want a friendly tax expert who explains things clearly. Is that Tax Garden?
Yes. Every client can reach our team on WhatsApp and gets plain-language explanations of what is filed and why, plus reminders before every deadline. No jargon, just friendly compliance support from Kondapur.
Where is Tax Garden located in Hyderabad?
Tax Garden is located at 4th Floor, South Block, CWS One Building, Hanuman Nagar, Kondapur, Hyderabad, Telangana 500084. We serve clients across Kondapur, HITEC City, Gachibowli, Madhapur, Jubilee Hills, Banjara Hills, and all of Hyderabad.
Can I get GST filing and registration services in Kondapur?
Yes. Tax Garden offers end-to-end GST services from our Kondapur office: GST registration, GSTR-1, GSTR-3B, GSTR-9 annual returns, ITC reconciliation, e-invoicing setup, and GST notice handling for businesses of all sizes in Kondapur and Hyderabad.
Do you file ITR for salaried employees and businesses in Hyderabad?
Yes. Our Kondapur team files ITR for salaried employees, freelancers, consultants, business owners, LLPs, and companies across Hyderabad. We cover ITR-1 through ITR-6 with complete Chapter VI-A deduction reconciliation, AIS reconciliation, and proactive deadline management.
Which areas in Hyderabad does Tax Garden serve?
Tax Garden's Kondapur office serves clients across Hyderabad including HITEC City, Gachibowli, Madhapur, Jubilee Hills, Banjara Hills, Begumpet, Secunderabad, Ameerpet, Kukatpally, Uppal, LB Nagar, and all of Telangana. Most services are available fully online.
What compliance services does Tax Garden offer for startups in Kondapur?
Tax Garden is a compliance partner for startups in Kondapur and Hyderabad's HITEC City corridor. We handle company incorporation, GST registration, TDS filings, payroll, ROC annual filings, director KYC, and annual ITR filing, all under one flat-fee plan.
How does Tax Garden's compliance model compare to traditional hourly accounting services in Hyderabad?
Tax Garden works on flat-fee monthly plans with a dedicated account manager, monthly compliance updates, and WhatsApp communication. Every entry flagged by our AI-assisted workflow is reviewed by our compliance team before filing, and Kavach covers up to ₹50,000 in service charges for clerical or data errors made by our team.
