What does payroll support for startups in India include?

Key takeaways

Payroll support for startups should be CA led, dashboard driven, and in place from day one, so TDS, Form 24Q, and Form 16 never slip.
Clean salary structuring, for example HRA, LTA, and reimbursements, can lift take home without raising CTC, when backed by proofs and rules.
Deadlines matter, TDS by the seventh, Form 24Q quarterly, Form 16 by June fifteen, delays add interest, late fees, and trust loss.
A clear scope avoids confusion, the CA team owns TDS, 24Q, and Form 16, HR or labour vendors usually own PF, ESIC, and PT.
Dashboards reduce chaos, you see calendars, challans, filings, reconciliations, and alerts, all in one place.
As headcount grows, controls, reconciliations, and audit trails become essential for diligence and investor confidence.
AI enabled virtual accounting, like AI Accountant, blends execution with visibility, saving founder time and reducing error risk.

Introduction, why payroll support for startups matters from day one

If you are running payroll in spreadsheets, it is easy to miss TDS on salary, confuse Form 24Q and Form 16, and submit late. Missed TDS can trigger interest at about one to one point five percent per month, late returns can add daily late fees that stack up fast. Poor salary structuring can also raise employee tax, which hurts trust.

This is where CA led payroll support helps. In India, it covers salary calculation, TDS deduction and challans, quarterly Form 24Q filings, and annual Form 16 issuance. It also includes smart salary structuring like HRA to make take home better. With a virtual accounting model, you get this without hiring a full finance team. See a practical explainer at AI Accountant.

Bottom line, get a repeatable month end cycle, correct tax, on time filings, and an audit trail, then sleep better.

Sources: Rainbow HR Consulting, Finsmart Accounting, My Startup Solution

What payroll support for startups includes

Payroll calculation and checks

Build a clean CTC template with fixed pay, variable pay, reimbursements, and perquisites.
Bring in attendance and leave data from HRMS to get payable days right.
Reconcile reimbursements and perquisites, tax or exempt as per rules and proofs.
Map cost centers or teams for MIS reporting.

TDS on salary and monthly deposits

Compute TDS per employee based on chosen regime and slabs, see a walkthrough at AI Accountant.
Adjust for investment declarations and proofs as the year goes on.
Pay TDS by the seventh of the next month, for March payroll, deposit by April thirty for non government deductors.

Quarterly and annual compliance

Prepare and file Form 24Q every quarter with correct employee level details, process notes here, AI Accountant.
Issue Form 16 to employees by June fifteen, so they can file returns on time.

Salary structuring and advisory

Advise on tax friendly structures like HRA, LTA, telephone expense, and reimbursements where allowed.
Guide on perquisite valuation like company car or accommodation.
Plan for ESOP tax and bonuses as teams grow.

Data and coordination

Pull and match data from HRMS, banks, and ledgers to validate TDS numbers.
Keep a simple audit trail of approvals and changes.

Scope clarity matters

CA led scope includes TDS calculation, challan payments, Form 24Q filing, Form 16, and salary tax structuring.
PF, ESIC, Professional Tax, Labour Welfare Fund, Shops and Establishments, and other labour filings usually sit with HR or labour vendors, the CA team can coordinate inputs but does not file those in a pure payroll tax scope.

Sources: Rainbow HR Consulting, Deel, Payroll Guide India, My Startup Solution, Finsmart Accounting

Compliance calendar for TDS on salary and Form 24Q

TDS deposit due date
Deposit by the seventh of the next month, for March payroll, deposit by April thirty for non government entities.
Form 24Q due dates
Quarter one, July thirty one, Quarter two, October thirty one, Quarter three, January thirty one, Quarter four, May thirty one.
Form 16 issuance
Issue by June fifteen.
Investment proofs cycle
Ask for fresh year declarations at the start of the financial year, collect proofs Jan to Mar, adjust TDS before year end.

Why this matters

Interest for delayed TDS can run at about one to one point five percent per month.
Late filing fees can be about two hundred rupees per day for TDS returns.
Repeated misses can invite penalties and notices.
Errors and delays also hurt team trust and investor confidence.

Tip for founders, use a payroll calendar inside your accounting system with colored badges for status, green for filed, amber for due, red for missed. That tiny visual cue drives action.

Sources: Rainbow HR Consulting, Finsmart Accounting

Startup lifecycle and payroll support for startups

Stage one, zero to ten employees

Set up PAN and TAN if not done.
Use a simple CTC template with basic, HRA, special allowance, PF if applicable, and tax regime choice.
Run payroll on a spreadsheet or a light HRMS if you prefer.
Compute TDS monthly and deposit on time.
File Form 24Q quarterly and issue Form 16 by June.

Stage two, ten to fifty employees

Move to a reliable HRMS that exports TDS ready reports.
Add variables like bonuses, incentives, and reimbursements.
Start MIS on payroll costs by team or project.
Tighten your cut offs and approval flow.
Add a schedule for investment proofs and perquisite tracking.

Stage three, fifty plus employees

Bring in checks for perquisites and ESOP tax.
Consider multi entity payroll for group structures.
Keep audit ready logs and reconciliations.
Use dashboards for burn, runway, and cash planning with payroll impact.

Your payroll support should flex across these stages, the goal stays the same, clean data, correct tax, on time filings, and an audit trail.

Sources: Rainbow HR Consulting, Deel, Payroll Guide India, Finsmart Accounting

Build vs outsource decisions for payroll support for startups

In house

Pros
Full control and quick tweaks, data stays with your team.
Cons
Needs TDS know how, return filing skills, and constant rule tracking, errors with PAN, TAN, challans, or returns can be costly, you will still need a CA review for tricky cases like ESOP and perquisites.

Outsourced CA led

Pros
Expert TDS computation and compliance with low error risk, advisory on salary structure and tax savings, checklists, calendars, and reconciliations built in.
Cons
Needs clear inputs and steady data sharing, some vendors do not cover HR labour laws, you still need an HR partner.

Hybrid model

Pros
Use HRMS for attendance, leave, and payslips, let a CA team handle TDS, 24Q, and Form 16, you keep employee experience, the CA team keeps compliance clean.
Cons
Needs tidy handoffs and mapped files each month.

A simple decision guide

Low headcount with very simple pay and no ESOPs, in house with a CA review is fine if you are disciplined.
Variables, reimbursements, perquisites, or ESOPs, bring in a CA led service.
Preparing for a VC round or due diligence, outsource the TDS and filings to reduce audit risk.

Sources: Rainbow HR Consulting, Finsmart Accounting, My Startup Solution, Yoma Business Solutions, Deel, Payroll Guide India

How AI Accountant delivers payroll support for startups inside Virtual Accounting

AI Accountant pairs a CA led team with a live dashboard. You get execution, advisory, and a single place to see status.

Less email, fewer spreadsheets, more certainty.

What the CA team does every month

Compute monthly TDS on salary for each employee.
Prepare and post TDS challans on time.
File Form 24Q quarterly and fix any errors that show up in TRACES.
Advise on tax efficient salary structure and perquisites.
Prepare and issue Form 16 by the due date.
Support with audit queries without certification, a non attest service.

What the dashboard shows you

A clear calendar for TDS deposit, Form 24Q, and Form 16, with due dates and status tags like due, in progress, and filed.
A document space for salary structures, investment declarations, proofs, and past returns.
Bank reconciliations that tie TDS challans to ledger entries and to payroll runs.
Alerts for anomalies like a sudden jump in net pay or a missing PAN.
A message thread with the CA team for quick query resolution.
MIS, cash flow, and payroll burn impact so you can plan runway.

Scope note

AI Accountant focuses on TDS and income tax parts of payroll, it can coordinate with your HR or labour vendor on PF, ESIC, and PT inputs, but does not file labour law returns.

Explore more at AI Accountant and practical payroll notes at this guide.

Sources: My Startup Solution, Yoma Business Solutions

Implementation playbook in ten steps for payroll support for startups

Use this simple plan to set up or to clean up, start today, iterate monthly.

Step one, TAN and policy baseline

Confirm that your PAN and TAN are active.
Finalize a clean CTC template with basic, HRA, special allowance, bonus, reimbursements, and deductions.

Step two, employee onboarding and declarations

Collect PAN, regime choice, and address.
Ask for investment declarations at the start of the year.

Step three, HRMS or spreadsheet mapping

Define a monthly cut off date.
Map pay elements to accounting ledgers and cost centers.
Ensure HRMS exports TDS ready reports.

Step four, dashboard calendar and approvers

Set up a due date calendar with owners for TDS, 24Q, and 16.
Put alerts three days before every due date.

Step five, month end cycle

Lock attendance.
Compute gross to net and TDS.
Review exceptions and approve payroll.

Step six, pay TDS and archive

Pay TDS by the seventh.
Save challans, working files, and payment proofs in the dashboard.

Step seven, file Form 24Q

Prepare the quarterly return.
Fix TRACES errors early to avoid last day rush.
File by the due date.

Step eight, year end tasks

Collect proofs Jan to Mar.
Recompute TDS and true up.
Prepare Form 16 and Form 12BA, issue by June fifteen.

Step nine, MIS and cash planning

Review payroll costs by team.
Lock budgets and compare burn to plan.
Update runway view.

Step ten, quarter reviews and tweaks

Revisit salary structure for tax efficiency.
Fix recurring data gaps with HR.
Update any policy change in the templates.

Sources: Rainbow HR Consulting, Deel, Payroll Guide India

Common pitfalls in payroll support for startups and how to avoid them

Wrong PAN or TAN
Validate PAN and TAN at setup and during onboarding, use a checklist in your dashboard.
Late TDS payments
Set auto reminders three days and one day before the seventh, keep a backup approver so payments do not wait when someone is out.
Ignoring variables, perquisites, and ESOP tax
Create a month end checklist for bonuses, reimbursements, and option exercises, ask your CA team to review perquisite valuation and ESOP withholding.
HRMS and ledger mismatch
Reconcile HRMS net pay to actual bank credits and to payroll expense booked, tie TDS challans to ledger entries every month.
Inefficient CTC structures
Review salary structure yearly, add or remove allowances as rules and team needs change.
No audit trail
Keep approvals, queries, challans, and returns in one place, use dashboard logs to show who did what and when.

Sources: Deel, Payroll Guide India, Rainbow HR Consulting, Finsmart Accounting, Yoma Business Solutions

Examples and mini case studies for payroll support for startups

Pre seed SaaS with eight employees

Problem
Payroll in a spreadsheet, last minute TDS, and unclear structure.
Fix
Moved to a dashboard with a calendar and simple CTC templates, CA team set up TDS working files and checked PAN data.
Result
No late fees in the next year, clean Form 24Q filings and Form 16 by June fifteen, teams saw lower tax due to better structure.

D2C brand with thirty two employees

Problem
HRMS exports did not tie to accounting, monthly close took eight days.
Fix
Integrated HRMS exports with accounting and TDS working files, automated TDS challan prep and bank reconciliation.
Result
Monthly close time dropped from eight days to three days, clear MIS on cost per team and accurate TDS every month.

Sources: My Startup Solution, Rainbow HR Consulting

Tools and templates that support payroll support for startups

Templates you can use

Salary Structure Template with basic, HRA, special allowance, and deductions.
Payroll Cut Off Checklist for data collection and approvals.
TDS Calendar with owners and due dates.

What to look for in an HRMS

Clean exports that include TDS fields and EPF fields if you need those.
Audit logs so you can see changes to salary and bank details.
Simple integrations or CSV formats that accounting can digest.
Role based access and maker checker for approvals.

Accounting and payroll tools to consider

Pick tools that fit your size today and can grow with you, focus on exports, logs, and approvals over flashy extras.

Sources: Rainbow HR Consulting, Yoma Business Solutions

Practical extras you can add right now

Annual payroll compliance timeline idea

Draw a simple timeline from April to June of the next year.
Place icons for monthly TDS deposits, quarterly Form 24Q filings, and June Form 16.
Color code due, filed, and pending.

Dashboard mock idea

Show a month view with tiles for TDS deposit, payroll run approval, Form 24Q status, and Form 16 prep.
Add badges like Filed for Q1 24Q and Due in three days for TDS.

These visuals shorten meetings and speed up action.

Sources: Rainbow HR Consulting, Yoma Business Solutions

Closing thoughts and next steps on payroll support for startups

Payroll support for startups is not about fancy lingo, it is about a steady rhythm of data, checks, TDS, and filings. When a CA led team runs this through a dashboard, you reduce penalties, save hours, and keep your team happy.

If you want to see how this looks in action, book a short demo of AI Accountant, you will see the calendar, the documents, and the reconciliations in one place. You can also grab the free templates and get a quick CA consult on TDS and salary setup.

Call to action
Book a dashboard demo for payroll support for startups, get a free CA consult on TDS and salary structuring, download the Salary Structure Template, Payroll Cut Off Checklist, and TDS Calendar.

Explore, AI Accountant. Sources, Rainbow HR Consulting

FAQ

How should a founder decide between in house payroll and a CA managed, virtual accounting model?

Match complexity to capability, if you have under ten employees, simple pay, and tight discipline, in house can work with a CA review. If you have variables, reimbursements, perquisites, or ESOPs, a CA managed model such as AI Accountant reduces error risk and gives you a dashboard to track TDS deposits, Form 24Q, and Form 16.

What does a CA led payroll scope usually include versus HR labour compliance?

The CA scope covers TDS on salary computation, challan payments, quarterly Form 24Q filing, annual Form 16, and advisory on tax efficient structures. HR labour compliance like PF, ESIC, PT, and Shops and Establishments typically sits with HR or a labour vendor, the CA can coordinate inputs but does not file those returns in a pure payroll tax scope.

What controls should a finance head put in place to avoid interest and late fees on TDS?

Use a due date calendar with owners, set reminders three days and one day before the seventh, maintain a backup approver, reconcile bank challans to TDS ledgers monthly, and review TRACES mismatches weekly. AI Accountant automates these reminders and ties challans to ledger entries.

How does salary structuring affect employee tax, and what are quick wins?

Components like HRA, LTA, and validated reimbursements can reduce taxable income when documented correctly. Quick wins include right sizing basic and HRA, enabling telephone or internet reimbursements with proofs, and using Section 10 exemptions where available. A CA led review, for example via AI Accountant, can increase take home without raising CTC.

We use spreadsheets today, can we still stay compliant without an HRMS?

Yes, if you lock a monthly cut off, compute TDS correctly, pay by the seventh, file Form 24Q on time, and archive proofs. The risk rises with headcount and variables, which is why founders move to a hybrid setup, HRMS for inputs and AI Accountant for TDS and filings.

What are the exact statutory deadlines I must track for Section 192 payroll TDS?

Deposit TDS by the seventh of the next month, for March, deposit by April thirty for non government deductors, file Form 24Q by July thirty one, October thirty one, January thirty one, and May thirty one for Q1 to Q4, issue Form 16 by June fifteen. Missing these can lead to interest of roughly one to one point five percent per month and late fees.

How do we handle old versus new tax regime declarations in monthly TDS?

Capture regime choice during onboarding, allow a mid year switch only as per current CBDT rules, compute TDS accordingly each month, then true up at year end after collecting proofs. AI Accountant tracks declarations and flags conflicts before payroll is approved.

What is the right way to manage perquisites and ESOP tax in payroll?

Maintain a perquisite register for cars, accommodation, and other benefits, value per rules, withhold TDS accordingly. For ESOP exercises, coordinate with your cap table and HRMS to compute taxable perquisite value in the month of exercise, then deduct TDS. A CA review prevents under withholding and TRACES mismatches.

How does a CA managed service handle TRACES errors and Form 24Q Annexure II issues?

It runs pre filing validations, fixes PAN anomalies, and aligns gross to net with Annexure II. Post filing, it monitors TRACES for defaults and resolves them through correction statements. AI Accountant builds these checks into its quarter close flow.

What documentation should be audit ready for payroll TDS?

Maintain CTC templates, attendance locks, investment declarations and proofs, perquisite workings, TDS computation files, challans, bank proofs, Form 24Q acknowledgments, and issued Form 16. AI Accountant keeps these documents in a single dashboard for quick retrieval during diligence.

We are preparing for a VC round, what payroll red flags will investors look for?

Repeated TDS delays, TRACES defaults, mismatched HRMS and ledger numbers, missing Form 16, and poor salary structuring. Mitigate by outsourcing TDS and filings to a CA led service such as AI Accountant, and show a clean audit trail with reconciliations.

Can AI Accountant integrate with our existing HRMS and accounting toolchain?

Yes, the service consumes standard HRMS exports or CSVs, aligns them to your chart of accounts, and reconciles TDS challans to ledger entries. It works alongside tools like QuickBooks, Xero, Zoho Books, TallyPrime, and FreshBooks, avoiding disruption while raising compliance quality.

What SLAs should I ask for when outsourcing payroll TDS and filings?

Month end TDS computation by T minus three, challan posting by the seventh, 24Q draft by T plus five from quarter close, correction statement turnaround within five working days, Form 16 drafts by May end, final by June fifteen. AI Accountant operates to these practical SLAs with dashboard visibility.

How do we price a CA led payroll support engagement, and what drives cost?

Fees are usually driven by employee count tiers, number of entities, variables like reimbursements and perquisites, ESOP complexity, and add ons like MIS and reconciliations. Bundling with virtual accounting, as with AI Accountant, often lowers overall cost due to shared workflows and fewer handoffs.

Written By

Harshit Jain

A Chartered Accountant with 5+ years of experience across indirect taxation and project finance. Harshit has led GST and income tax compliance for clients in hospitality, fast fashion, FMCG, cement, and related sectors, including managing analyst teams and end to end filings.