HR Compliance and Paperwork Checklist for Small Teams in India (2026)

A small team usually finds out about HR compliance the hard way: an employee asks for a Form 16, a notice arrives about a late PF payment, or a resignation turns into an argument because there was never a proper offer letter. Nobody hired you to be an HR department, but the obligations arrive at the first employee and grow at ten, twenty and fifty.

This checklist is for founders, office managers and accountants running a team of 5 to 50 in India. It covers what applies when, what paperwork you should have in place, and what software can and can't do for you. It also says plainly which parts PeopleVio covers, so you don't buy a tool expecting more.

Thresholds and rates below are as of 21 September 2026. Rules change by notification and vary by state and industry, so confirm your own position with an accountant or labour-law consultant.

Which obligations start at which size

Obligation	Roughly when it applies
Shops and Establishments registration	From your first employee, in most states, with state-specific rules
TDS on salary	When any employee's salary is taxable, at any headcount
Professional Tax and Labour Welfare Fund	State by state; only in states that levy them
ESI	Generally establishments with 10 or more employees, for staff within the ₹21,000 gross wage ceiling
Gratuity	Generally establishments with 10 or more employees, after five years of service (one year for fixed-term staff under the labour codes)
PF	Under the labour codes now in force, establishments with 20 or more employees; the EPF wage ceiling was raised to ₹25,000 on 17 September 2026

A ten-person team is often outside PF but inside ESI and gratuity. A twenty-person team picks up PF. That is why "we're too small for compliance" stops being true sooner than most founders expect.

The monthly compliance calendar

• By the 7th: deposit TDS deducted from salaries in the previous month.
• By the 15th: PF and ESI contributions for the previous month, where applicable.
• State-dependent dates: Professional Tax and LWF, which differ by state.
• Quarterly: TDS returns for salary.
• Annually: Form 16 to each employee, and investment declarations collected early in the financial year.

Set these as calendar reminders on day one. Missing a date usually costs more in interest and damages than the contribution itself.

The employee paperwork checklist

Every employee, from the first one, should have:

1. An offer letter with designation, CTC breakup, joining date, place of work, probation period and notice period.
2. An appointment or employment agreement with terms, confidentiality and notice.
3. Identity and address proof, education and experience documents, stored somewhere you can find them.
4. PAN, and bank details for salary and TDS.
5. PF UAN and ESI numbers, where applicable.
6. A signed acknowledgement of your leave, attendance and code-of-conduct policies.
7. Payslips every month, kept for your records too.
8. A tax declaration early in the year, if TDS applies.
9. A resignation letter and an exit checklist when someone leaves: asset return, access removal, final dues.

Offer letters are worth doing properly. A vague one is the root of most early-stage disputes about salary structure and notice.

What an offer letter should contain

• Name, designation, department and reporting manager
• Date of joining and place of work
• Salary structure: Basic, HRA, allowances and total CTC, with any variable pay explained
• Probation period and confirmation process
• Notice period and any bond or clawback terms
• Leave entitlements or a reference to the policy
• A clear deadline to accept, and what happens if they don't

A candidate-facing accept or decline step, with a record of when it happened, makes the offer easier to defend later.

The small-team HR stack

You don't need eight tools. You need to cover six jobs:

Job	What to look for
Attendance and leave	Verified check-in, running leave balances, approval queue, holiday calendar
Payroll	Salary structure, attendance proration, payslips, TDS
Statutory filings	PF, ESI and Professional Tax calculation and returns
Offer letters and onboarding	Templates, candidate accept step, document storage
Expenses	Claims with receipts, paid through payroll
Assets and exit	Laptop and equipment tracking, resignation flow

Where PeopleVio fits a small team

• Attendance and leave: geofenced check-in validated on the server against your office locations, a month calendar, running Casual, Sick and Paid leave balances, comp off for working a holiday, and a holiday calendar. See our geofenced attendance guide for how the check works.
• Payroll: configurable salary structures (Basic, HRA, allowances, deductions), custom pay components for incentives or deductions, one-click monthly payroll prorated for attendance, and PDF payslips.
• TDS: when an admin turns TDS on in company settings, payroll calculates TDS with old and new regime rules, and employees submit tax declarations in the portal.
• Offer letters: draft, release and track offer letters, with a candidate-facing accept or decline page and PDF generation.
• Employee documents: categorised uploads (Education, Identity, Certifications and more) against each record.
• Expenses: claims with receipts, swept into the next payroll run once approved.
• Assets and exit: track laptops and equipment from issue to return, and run an employee-initiated, admin-approved resignation, after which the employee is marked inactive automatically.
• Org chart and self-service: a reporting hierarchy from each employee's manager, and employees see their own profile and payslips.

An honest note on what PeopleVio does not cover

• PF and ESI: with the EPFO and ESIC modules switched on, PeopleVio calculates contributions in payroll, generates the ECR and ESIC monthly return files, reminds you before the 15th and tracks the challans. You upload the files and pay on the portals.
• Professional Tax and LWF: no state-wise calculation or returns.
• Gratuity and final settlement: no calculation, accrual tracking or settlement flow.
• Form 16 generation and TDS returns: PeopleVio calculates monthly TDS when enabled, but you should confirm how you would produce Form 16 and file returns.
• Performance reviews, recruitment and shift scheduling: none.
• An installable mobile app: it is a responsive web app.

The split works well for a small team that already has an accountant filing statutory returns and wants everything else in one place. It is the wrong choice if you want a single tool to run PF, ESI and Professional Tax filings for you.

A worked example: a 15-person team

Suppose a services company has 15 employees, one office, no PF yet and an accountant who files TDS.

• Now: ESI may apply for staff under the wage ceiling, and TDS applies to anyone taxable. Gratuity applies once anyone reaches five years.
• At 20 employees: PF comes into scope. The team needs UAN and KYC for everyone, and a monthly 15th-of-month routine.
• Software: attendance, leave, payroll, TDS, offer letters, documents, expenses and assets sit in PeopleVio. PF, ESI and Professional Tax stay with the accountant.
• Cost: at 15 employees the first band applies, ₹59 per employee per month on monthly billing (₹49 on yearly). That is ₹885 a month, or ₹735 a month billed yearly, with all modules included. The band rate applies to your total active employee count, so check the pricing page for current numbers.

Common small-team mistakes

• Waiting for an audit. Set the compliance calendar on day one, not after a notice.
• No written offer letter. Verbal salary promises are the most common cause of early disputes.
• Skipping tax declarations. Collect them early in the year, or year-end TDS becomes a shock.
• Letting documents live in WhatsApp. Store identity, education and experience proofs against each employee.
• Forgetting assets. Untracked laptops are a cost that arrives at the first resignation.
• Not planning for 20 employees. PF arrives at that threshold, so prepare before you cross it.

Frequently asked questions

Does a 10-person company need PF? Under the labour codes now in force, PF generally applies to establishments with 20 or more employees, though smaller ones can opt in. Confirm your own position with a consultant.

When does ESI apply? Generally to establishments with 10 or more employees, for staff within the ₹21,000 gross wage ceiling. The employee pays 0.75% and the employer 3.25%.

What is the current EPF wage ceiling? ₹25,000 a month, notified on 17 September 2026 (S.O. 5109(E)), up from ₹15,000. See our PF and ESI guide for details.

Do I need an offer letter for every employee? Yes. A written offer with the salary structure, probation and notice terms prevents most early disputes. PeopleVio lets you draft, release and track offer letters with a candidate accept or decline step.

Can PeopleVio file PF and ESI returns? It prepares them: with the EPFO and ESIC modules on, PeopleVio calculates PF and ESI and generates the ECR and ESIC return files. The upload and the challan payment happen on the EPFO and ESIC portals.

Does PeopleVio calculate TDS? Yes, when an admin turns TDS on in company settings. It supports old and new regime rules and collects employee tax declarations, without surcharge handling or previous-employer income aggregation.

How much does HR software cost for a 20-person team? On PeopleVio, 20 employees falls in the first band at ₹59 per employee per month (₹49 yearly), so ₹1,180 a month on monthly billing. Compare total cost, including any separately sold payroll module, for every vendor.

Is gratuity applicable to small companies? Generally to establishments with 10 or more employees, after five years of service, or one year for fixed-term staff under the labour codes. See our gratuity guide.

The bottom line

For a small team, compliance is a calendar and a paper trail: know which obligations apply at your size, put the dates in reminders, and keep an offer letter, documents and payslips for every employee. PeopleVio covers the operational side (attendance, leave, payroll, TDS, offer letters, expenses and assets) in one flat-priced portal, and leaves PF, ESI and Professional Tax to your accountant. If that split suits you, it will save real time each month.

Want to see it with your own team? Request a demo or check the pricing.