Payroll affects employees, tax and books
Payroll must connect salary structure, attendance, reimbursements, TDS, statutory deductions and accounting entries accurately.
Situations this page is built for
- You have employees or regular contractors.
- Payslips and salary structure need setup.
- TDS on salary needs calculation.
- Payroll entries are not matching bank payments.
- PF/ESI or reimbursements need tracking.
Documents and details usually required
- Bank statements, credit card statements and payment gateway reports.
- Sales invoices, purchase bills, expense receipts and debit/credit notes.
- GST returns, TDS data and payroll information if applicable.
- Loan schedules, fixed asset details and opening balances.
- Previous accounting file from Tally, Zoho, QuickBooks or spreadsheets.
- Customer/vendor lists and receivable/payable ageing.
Practical process before hiring
Define monthly scope
Set transaction volume, software, reports, GST/TDS and payroll expectations.
Collect source data
Create a consistent monthly process for invoices, bills, bank data and approvals.
Reconcile and close
Match bank, GST, receivables, payables and ledgers regularly.
Review reports
Use P&L, balance sheet, cash-flow and MIS reports to make decisions.
What to expect in India
| Work type | Typical price range | Timeline |
|---|---|---|
| Basic bookkeeping | Rs. 2,000 - Rs. 6,000 per month | Monthly |
| Small business accounting retainer | Rs. 6,000 - Rs. 25,000 per month | Monthly close |
| High-volume accounting/MIS | Rs. 25,000+ | Ongoing |
Prices vary by document readiness, urgency, city, professional experience and whether previous periods need cleanup.
Common red flags and mistakes
- Updating books only at year-end.
- Mixing personal and business expenses without notes.
- Skipping bank reconciliation.
- Not matching GST returns with books.
- Not defining monthly reports and closing dates.
What to mention when you post
- Business type and monthly transaction count.
- Current accounting software and data status.
- Whether old months need cleanup.
- Need for GST, payroll, TDS, MIS or only bookkeeping.
- Preferred monthly reporting date.
How to choose the right professional
- Ask for exact monthly deliverables.
- Confirm software access and file ownership.
- Check whether GST/TDS/payroll are included.
- Set a monthly closing date.
- Review sample reports before finalising.
Extra checks before you finalise
- Decide whether the professional is responsible for only posting entries or also reviewing ledger classification and tax impact.
- For monthly retainers, ask for a fixed closing calendar covering bank reconciliation, GST matching, receivable ageing and owner review.
- If the books are used for loans, investors or audit, request supporting schedules instead of only a P&L and balance sheet export.
Questions people ask before hiring
Does payroll accounting include HR?
Not always. HR operations may be separate.
Is TDS included?
It should be clarified in scope.
Can payroll be monthly?
Yes, payroll is typically processed monthly.
What data is needed?
Employee details, salary structure, attendance, reimbursements and bank payment details.
Frequently Asked Questions
1. What are the audit and accounting requirements for businesses dealing with Payroll Accounting Services?
Businesses involving Payroll Accounting Services must maintain proper books of accounts under Section 44AA. A tax audit under Section 44AB is mandatory if turnover exceeds ₹1 crore (or ₹10 crore for digital operations).
2. Why is a UDIN mandatory for CA certifications related to Payroll Accounting Services?
All CA-certified financial statements, net worth certificates, or audit reports for Payroll Accounting Services must carry a Unique Document Identification Number (UDIN) generated on the ICAI portal to be legally valid.
3. What is the due date for submitting the Tax Audit report?
The due date to file the tax audit report on the income tax portal is September 30 of the Assessment Year (one month prior to the ITR filing due date of October 31 for audited cases).
4. What is the penalty for not getting books of accounts audited?
Under Section 271B, failure to get books audited u/s 44AB attracts a penalty of 0.5% of the total sales, turnover, or gross receipts, subject to a maximum cap of ₹1.5 lakh (₹150,000).
5. What is UDIN and why is it mandatory for CAs?
UDIN (Unique Document Identification Number) is a unique 18-digit number generated by Chartered Accountants on the ICAI portal for every certificate, audit report, and document they sign, to prevent forgery and verify CA credentials.
6. What happens if a CA fails to generate a UDIN?
Documents signed by a CA without a UDIN are treated as invalid. If not generated within the 60-day window, the CA can face disciplinary action from the ICAI for professional misconduct.
7. What is a Statutory Audit under the Companies Act, 2013?
A statutory audit is a mandatory review of a company's financial records to verify they present a true and fair view. It is compulsory for all companies (Private Limited, Public, OPC) regardless of turnover or capital.
8. What is a Secretarial Audit under Section 204?
A secretarial audit is an audit of compliance with corporate, securities, and labor laws, conducted by a practicing Company Secretary (CS) who submits Form MR-3. It is mandatory for listed and large public/borrowing unlisted companies.
9. What are the thresholds for a mandatory Secretarial Audit?
Secretarial audit is mandatory for: (1) Listed companies. (2) Public companies with paid-up capital >= ₹50 crore or turnover >= ₹250 crore. (3) Any company with outstanding bank/public financial institution loans >= ₹100 crore.
10. What is CARO (Companies Auditor's Report Order)?
CARO is a set of compliance items that statutory auditors of companies must report on, covering areas like fixed assets, inventory verification, loans to related parties, statutory dues, and internal control structures.
11. Are LLPs required to undergo audits?
Under the LLP Act, 2008, an LLP must get its accounts audited if its annual turnover exceeds ₹40 lakh or if its partner contributions exceed ₹25 lakh.
12. What is an Internal Audit? Who is required to appoint an internal auditor?
An internal audit evaluates a company's risk management and internal controls. Under Section 138 of the Companies Act, listed companies and unlisted public/private companies crossing specific turnover or debt thresholds must appoint an internal auditor.
13. What is the difference between Form 3CA and Form 3CB?
Form 3CA is the audit report used when the business is already required to get its accounts audited under another law (like the Companies Act). Form 3CB is used when the audit is required solely under the Income Tax Act.
14. What is Form 3CD?
Form 3CD is a detailed statement of particulars containing 44 clauses that the tax auditor must complete, detailing business income, expenses, depreciation, MSME dues, TDS compliance, and tax adjustments.
15. Can a tax audit report be revised after uploading?
Yes, a tax audit report can be revised if there are changes in the accounts (like corporate restructuring) or adjustments due to subsequent notifications, certified by the same CA with a fresh UDIN.