AI tools for payroll in India: salary, attendance and compliance for small teams

Published 2026-11-04, Updated 2026-11-04, 20 min read

For a small team in India, payroll is not just paying salaries on time. It is attendance, leave, loss of pay, salary revisions, payslips, and then the statutory chain that follows every month: provident fund (PF), employees’ state insurance (ESI), professional tax (PT) where your state levies it, and tax deducted at source (TDS) on salaries. Miss one monthly date and the penalty clock starts, even if the salary itself went out on time. That is why a good payroll tool matters more than a prettier spreadsheet, and why the cheapest option is not always the safest one.

The short answer is this: if you have up to 10 employees, start with Zoho Payroll Free, because it covers real statutory payroll at no cost. If you have 25 to 100 employees and compliance is your biggest worry, greytHR Essential is the steadier pick. If you want salaries and statutory payments to leave from the same place, RazorpayX Payroll is built for that, but it costs more and has no free plan. Keka suits a growing team that wants payroll inside a full HR suite, and Kredily suits a zero-budget team that is willing to pay later for payouts and challan filing. Every tool below works in India without a VPN, and every price quoted here must be re-checked on the official pricing page before you pay, because prices and limits change.

This article is general information only, not professional tax, legal or accounting advice. Payroll rules depend on your state, your headcount, your salary structure and the current law, so check the official government and vendor help pages, and talk to your chartered accountant before you promise a deadline, file a return or change anyone’s salary structure.

The short answer, in one table

What “AI” actually means in payroll software

Vendors use the word AI loosely, so it helps to separate the marketing from the machinery. In payroll, the useful automation is usually not a chatbot. It is anomaly detection, which means the software flags an outlier before you run payroll, such as an employee whose hours suddenly doubled, a deduction that went missing, or a salary component that changed without an approval. Keka, for example, describes AI checks that catch incorrect hours, missing deductions and outliers before a payroll run, rather than after salaries are paid. That kind of check saves a real headache, because fixing a wrong salary after payment means recovery, revised payslips and sometimes revised filings.

The second useful automation is attendance feeding payroll directly. When leave, overtime, shift data and loss of pay flow into the salary calculation without retyping, you remove the most common source of payroll errors: the manual copy from one sheet to another. The third is compliance calculation, where PF, ESI, PT and TDS are computed from the salary structure and the employee’s state, and the challans and reports are generated in the format the portal expects. None of this removes your responsibility. The software calculates, but you, or your accountant, still approve the run, check the statutory dates and file on time. Treat any tool that promises “fully automatic compliance with no checking” as a warning sign, not a feature.

1. Zoho Payroll: the best free start for teams up to 10

Zoho Payroll is the most generous free payroll option in India, and it is the right default for a team of up to 10 employees. The free plan, confirmed on Zoho’s official India pricing page, covers automatic payroll calculation, automatic payslip generation, salary revisions and arrears, loss of pay and its reversal, an employee self-service portal, reimbursement and investment-proof approvals, and more than 40 built-in payroll reports. On compliance it covers income tax, EPF, ESI, state-wise professional tax and labour welfare fund, along with an automatic TDS worksheet. That is real statutory payroll, not a time-limited trial. Salary payments on the free plan run through HSBC, while the paid Standard plan adds payments through ICICI Bank.

The paid plans stay affordable as you grow. Standard costs ₹1,000 a month and includes 25 employees, with extra employees at ₹50 a month on monthly billing or ₹40 a month on annual billing, according to Zoho’s own pricing page. That difference between monthly and annual billing is worth noting, because secondary roundups sometimes quote only one of the two figures, and the two sources disagree if you read them carelessly. Always read the billing-frequency toggle on the official page before comparing. Standard adds salary templates, loans and advances, custom salary components, statutory bonus, contractor payroll and TDS challan recording, among other features. Professional and Premium plans add off-cycle pay runs, bonus runs, approvals, and leave and attendance.

Zoho Payroll fits best if you are a startup, a small agency, a clinic, a coaching centre or a shop with a small salaried team, especially if you already use Zoho Books or Zoho People, since the integrations are built in. Its weakness is the 10-employee ceiling on the free plan: the moment you hire employee number 11, you move to a paid plan, so budget for that step in advance rather than discovering it in a hiring month. It also suits a team that is comfortable with self-service setup and email support on the free plan, rather than expecting a dedicated account manager.

2. greytHR: the steadier pick for compliance-heavy teams

greytHR is one of India’s most established HR and payroll platforms, and it is the tool most often recommended when compliance, rather than price alone, is the deciding factor. Every plan includes complete payroll, leave management and employee self-service, and the platform is built around statutory handling for PF, ESI, PT and TDS, with the reports and filings that a growing company needs as headcount and state coverage increase.

Pricing is straightforward but structured around a 50-employee block, which matters for small teams. Essential costs ₹2,495 a month and includes 50 employees, with each additional employee at ₹45 a month. Growth costs ₹4,495 a month, also for 50 employees, with additional employees at ₹85 a month. Premium is tailored, quote-based pricing with all modules included. For a team of 5 or 10, paying for a 50-employee block makes the cost per person high, which is why greytHR is a weaker value at very small sizes even though it is a strong product. For a team of 25 to 100, especially one spread across states or with a dedicated HR person, the per-person cost becomes reasonable and the compliance depth earns its price.

Choose greytHR if your team is approaching 25 people, if you operate in more than one state and professional tax dates keep tripping you up, or if your accountant already knows the platform and its reports. Choose something cheaper if you have under 10 employees and a simple, single-state salary structure, because you would be paying for capacity you do not yet use. Like every tool here, re-check the official pricing page before paying, since plan contents and per-employee rates change.

3. RazorpayX Payroll: salaries, payouts and filings from one place

RazorpayX Payroll’s advantage is not just calculation; it is the payout. Salaries and statutory payments can go out directly from your RazorpayX account, and compliance calculation, payments and filings are listed on every plan. For a founder who currently downloads challan files from one system and pays them separately through a bank portal, removing that step is a genuine time saving and removes a class of missed-payment mistakes.

The price reflects that convenience. Prime costs ₹3,499 a month for up to 20 employees, Elite costs ₹6,499 a month on annual billing for 50 employees (₹9,499 a month on semi-annual billing), and both charge ₹150 per additional employee per month, with 18% GST extra on top. Enterprise, for 100 or more employees, is quote-based. There is no free plan, although you can request a demo. Time and attendance and basic expense management are included, but fuller expense management and fuller support sit on higher plans, so check the plan comparison table carefully if those matter to you.

RazorpayX Payroll fits startups and tech companies that already bank with Razorpay, or that value fewer moving parts over the lowest price. It fits less well if you are a cost-sensitive team under 10 employees, because Zoho Payroll Free does the core calculation job at no cost, and the payout convenience alone rarely justifies ₹3,499 a month at that size. It also fits less well if you want a full HR suite with performance, recruitment and deep leave policy features, where Keka or greytHR may cover more ground.

4. Keka: payroll inside a full HR suite for growing teams

Keka is a full HR management platform with payroll as one module, and it suits a team that has outgrown a payroll-only tool. Its payroll side handles multi-state compliance, complex salary components, allowances, deductions, bonuses, different pay cycles, loans and salary advances, expense management and full-and-final settlement, with statutory reports for PF, ESI, labour welfare fund, TDS and other mandatory deductions. Its attendance side covers leave management integrated with payroll, overtime tracking, shift management, selfie-based clock-in, continuous location punching for field staff and geo-fencing around the office, which matters if your team works hybrid or in the field.

The AI angle Keka promotes is pre-run anomaly detection: catching incorrect hours, missing deductions and outliers before payroll runs, plus governance features such as maker-checker validation, approval workflows before processing and role-based access, so the person who prepares payroll is not the same person who approves it. For a team of 50 or more, that separation is good practice, not bureaucracy. Tax handling covers declarations, proof submissions, Form 16 and Form 24Q, and gratuity management is covered end to end.

Pricing is the honest limitation here: Keka’s pricing is quote-based, and no public starting price was found in the sources checked for this article. There is a free trial, and the company notes that a nominal setup fee applies for guided onboarding, including payroll configuration, employee data import, past salary validation and policy customisation. That onboarding help is genuinely useful, but it means you cannot budget Keka from a price page alone. Request a quote with your exact headcount, number of states and attendance needs, and compare the total first-year cost, including setup, against greytHR Essential or RazorpayX Elite before deciding.

5. Kredily: the zero-budget start, with paid steps for payouts and filings

Kredily is the tool to look at when the budget is genuinely zero and the team is just getting started. Its Free Forever plan costs ₹0 a month and covers payroll, HR, attendance and leave, PF, ESI, PT and TDS statutory calculation, an employee self-service portal and mobile app, and web clock-in attendance, for unlimited employees with no credit card and no per-seat minimum, subject to an active-usage policy stated on its pricing page. That is a broader free plan than most competitors, and it is why Kredily appears in many “free payroll” lists.

The honest catch is what the free plan does not include. Salary payouts through ICICI Bank and NEFT, PF and ESI challans, Form 12BB and Form 16 sit on the Payroll OS plan at ₹1,249 a month for up to 25 employees, with ₹50 per employee beyond 25. The Professional plan at ₹1,749 a month for up to 25 employees adds unlimited leave, attendance and salary rules, selfie and GPS attendance with penalty rules, expense workflows and unlimited storage, and Enterprise is custom pricing with exit settlements, multi-company support and dedicated support. Free-plan data storage is 250 MB, which is fine for a small team but worth knowing before you upload years of documents.

Kredily fits a new startup, a small agency or a proprietor with a handful of staff who needs correct calculations and attendance now and can move to a paid plan when payouts and challan filing become worth paying for. It fits less well if you need filing handled from day one, because then the paid plan is the real price, not the free one. Compare that paid price honestly against Zoho Payroll Standard before choosing on the word “free” alone.

Payroll in India: salary, attendance and compliance, month by month

A small team should understand the monthly rhythm before choosing a tool, because the tool’s job is to keep you on this calendar. In general, TDS deducted in a month is deposited by the 7th of the following month, with March as a known exception running to 30 April, while PF contributions and the ECR, and ESI contributions, are due by the 15th. Professional tax dates depend on the state: monthly in states such as Andhra Pradesh, Telangana and Madhya Pradesh by the 10th, Gujarat by the 15th, Karnataka by the 20th and West Bengal by the 21st, half-yearly in states such as Kerala, Odisha and Tamil Nadu, and annual in states such as Jharkhand and Bihar, while several states including Delhi, Haryana, Uttar Pradesh and Rajasthan do not levy professional tax at all. Quarterly TDS returns and the annual Form 16 cycle sit on top of the monthly dates. Sources agree on the broad monthly pattern but differ on state-by-state detail, so confirm your own state’s current dates on the official portal and with your accountant rather than trusting any single blog, including this one.

Attendance is where most small-team payroll errors start. The common failure is not a wrong tax slab; it is a leave record that never reached payroll, an overtime entry counted twice, or a new joiner’s first-month salary calculated on the wrong number of days. A tool earns its keep when leave approvals, attendance punches and loss-of-pay days flow into the salary run automatically, and when the payroll preview shows you the exception list before you approve. Before your first run on any new tool, test it with one real month in parallel with your old method, even if that old method is a spreadsheet. If the two totals do not match, find out why before you pay anyone from the new system.

Salary structure matters too. Basic pay, house rent allowance, special allowance, provident fund, professional tax, TDS, reimbursements, loans and advances, bonuses, arrears and full-and-final settlement all interact, and a change in one component can change PF or TDS. A tool with pre-defined Indian salary components and custom-component support, like Zoho Payroll Standard or Keka, reduces the chance of a hand-built error. If your team includes contractors as well as employees, check whether the tool handles contractor payroll separately, because contractor TDS rules differ from salary TDS rules, and mixing the two in one run is a common mistake.

What to avoid

First, do not choose a tool on its free plan alone without checking what filing costs. A free calculation that leaves you to file every challan manually is not the same as a free plan that files for you, and the difference shows up in missed dates. Second, do not pay for a 50-employee block when you have 6 employees, unless you are hiring fast and the compliance depth justifies it. Third, do not run your first live payroll from a new tool without a parallel test month, and never approve a run you have not previewed line by line for at least the first three months. Fourth, do not store salary data in a shared spreadsheet with no access control once you move to a tool; use the tool’s role-based access so only the people who need salary data can see it. Fifth, do not trust a single secondary price roundup: prices here were cross-checked against official pricing pages, but they still change, and GST treatment, billing frequency and per-employee charges all affect the final bill. Sixth, do not promise employees a salary date or a Form 16 date that your tool has not confirmed; confirm the payout and filing timeline in writing during your trial. Seventh, avoid tools that need a VPN to work in India, tools with no Indian statutory reports, and any tool that asks you to upload employee bank details or identity documents before you have checked its security and privacy pages. If a tool cannot explain where your data is stored and who can access it, do not put salary data in it.

How to choose in ten minutes

If you have up to 10 employees and a simple salary structure, start a Zoho Payroll Free trial today and run one parallel month. If you have 25 to 100 employees, or you operate in more than one state, compare greytHR Essential against a Keka quote on total first-year cost. If salary payouts and statutory payments from one account would save you several hours a month, price RazorpayX Prime or Elite against that time saved, not against the cheapest plan. If your budget is zero this quarter, start on Kredily Free, but write down the date you will move to a paid plan for challans and Form 16, because that step is not optional. In every case, ask the vendor three questions before paying: which filings are included in this exact plan, what happens to my data if I cancel, and who do I contact when a statutory portal rejects a file. The quality of those three answers tells you more than any feature list.

If you are also sorting out the wider small-business toolkit, the guides on AI tools for small business in India, AI tools for HR and recruiters in India and AI tools for freelancers in India cover the neighbouring decisions, such as billing, hiring and contractor work, that usually sit next to payroll.

FAQ

Which is the best free payroll software in India for a small team? For up to 10 employees, Zoho Payroll Free is the strongest free option found, because it covers salary calculation, payslips, PF, ESI, professional tax, labour welfare fund and TDS worksheets at no cost. Kredily Free is broader on headcount, covering unlimited employees, but payouts and challan filing sit on its paid plans, so the right free pick depends on whether you need filing included or just calculation.

Do these payroll tools work in India without a VPN? Yes, all five tools covered here are Indian payroll products built for Indian compliance, and they work on an ordinary Indian internet connection without a VPN. If a payroll tool you are considering needs a VPN, treats Indian statutory deductions as an afterthought, or has no PF, ESI, PT and TDS reports, it is the wrong tool for an Indian small team.

What is the cheapest payroll software in India for 5 employees? At 5 employees, Zoho Payroll Free costs nothing and Kredily Free costs nothing, so the cheapest honest answer is free, with the caveat that Kredily’s free plan does not include payouts or challan filing. The cheapest paid step up is Zoho Payroll Standard at ₹1,000 a month for 25 employees, while greytHR Essential at ₹2,495 a month for 50 employees is poor value at 5 employees because you pay for a 50-person block.

What happens if I miss a PF, ESI or TDS deadline? Late deposits attract interest and penalties, and the rates and consequences differ by statute, so the cost of a missed date is usually far higher than a month of payroll software. One widely cited compliance calendar puts TDS interest at 1.5 percent a month for late deposit and PF damages at 1 percent a month with no ceiling, but treat those figures as a warning to check the current law, not as a quote, and confirm the exact consequence with your accountant if a deadline has already passed.

Does professional tax apply in every Indian state? No. Professional tax is a state tax, capped at ₹2,500 per person per year, and several states do not levy it at all, including Delhi, Haryana, Uttar Pradesh, Rajasthan and Punjab, while others levy it monthly, half-yearly, quarterly or annually on different dates. Your payroll tool must apply the rules for the state where each employee works, not just the state where your company is registered, so check multi-state handling before you buy.

Is Keka free? No public free plan for Keka’s payroll was found in the sources checked for this article. Keka offers a free trial and quote-based pricing, with a nominal setup fee for guided onboarding. If a blog claims a specific Keka starting price without linking to an official pricing page, treat that figure as unverified until you request a quote yourself.

Should a small team use AI payroll tools or a chartered accountant? Use both. The tool handles calculation, attendance, payslips and report generation, and the accountant checks salary structure, statutory registrations, filing correctness and year-end returns. A tool does not replace professional advice, and an accountant working from a clean, tool-generated payroll register is faster and cheaper than one reconstructing a year of spreadsheets.

Can I switch payroll tools mid-year? Yes, but plan the switch at a month boundary, carry over year-to-date salary, TDS, PF and leave balances accurately, and run at least one parallel month before going live. The most common switching mistake is losing leave balances or investment declarations in the move, so export everything from the old tool before you cancel it, and keep the old records accessible for the financial year.

Final verdict

For most small Indian teams, Zoho Payroll Free (up to 10 staff) is the smartest start; greytHR suits compliance-heavy teams over 25.

Start free where free is real, pay for compliance depth when your headcount or state spread demands it, test one month in parallel before you trust any new tool with real salaries, and re-check the official pricing and help pages before you pay or promise a deadline. Payroll is one of the few places where a small monthly fee reliably costs less than a single missed filing, so choose the tool that keeps you on the calendar, not just the one with the lowest headline price. Remember that this article is general information only, not professional advice, and your accountant and the official portals are the final word on your team’s obligations.

Image credits:

• A person working through payroll paperwork with a calculator and laptop on a desk — Pexels, photo by Mikhail Nilov, Pexels License (resized for this page).
• Hands using a calculator over payroll charts and documents beside a laptop — Pexels, photo by Jakub Zerdzicki, Pexels License (resized for this page).
• An office team gathered around a laptop in a bright office — Pexels, photo by Andrea Piacquadio, Pexels License (resized for this page).