Get your PF, TDS, and PT registrations right from day one, structure salaries so your team actually keeps more of what they earn, handle ESOP perquisite tax correctly when employees exercise their options, stay compliant across every state your remote team works from, and show up to your next fundraise with payroll records that hold up to scrutiny - without a dedicated finance team to manage any of it.
The compliance obligations that trip startups up are rarely the obvious ones. They are the registrations nobody told you to make, the ESOP perquisite tax nobody modelled, and the PT notices from states you entered the moment you hired a remote employee there.
PF registration, TAN for TDS, ESIC from when the number of employees exceeds 10, PT registration in each state where you have an office – most founders will realize this piece by piece, rather than getting their act together before they pay out the first salary.
The gain from exercising stock options will be taxed as a perquisite as per section 17(2) and deductible as TDS under Section 192. This is done using a spreadsheet or is ignored by most start-ups, and both are costly ways to do things when the employee is most excited about his/her equity.
If recruitment takes place in Bengaluru, Pune, Hyderabad, and Delhi in the same quarter, there will be PT liability in four different states. It is only after receiving the notification that companies usually realize the fact.
A startup competing against larger companies for talent cannot always win on gross salary. But a correctly structured package - HRA, LTA, food allowance, NPS - can make the net take-home significantly more competitive without increasing the CTC.
Most new enterprises start off with independent contractors through Section 194J. Making such employees into full-time employees involves PF, ESIC, and TDS considerations from the date of joining, which is done wrong by most new enterprises.
Series A and Series B investors go through payroll records. Startups running on spreadsheets, with missed PT filings and informal contractor arrangements, face a cleanup exercise at exactly the moment they can least afford the distraction.
Startups carry more workforce complexity per head than almost any other organisation type - founders, remote employees, contractors converting to FTEs, and ESOP holders all in the same 30-person team.
Director remuneration and founder salary with correct TDS treatment for working directors from the first payroll run.
Director RemunerationCore team on structured CTC with tax-efficient components, PF, TDS, and ESIC where applicable, from employee number one.
Tax-Efficient CTCTeam members working from different states, each triggering PT obligations in their work state, handled automatically.
Multi-State Remote PTAdministered under Section 194J till it got converted into employment; with an easy transition and consistency throughout the process.
194J to FTE ConversionPerquisite tax at exercise handled correctly, with revised TDS and Form 16 reflecting ESOP income in the same payroll cycle.
ESOP Perquisite TaxStipend processing with correct tax treatment, including NATS apprenticeship scheme management where applicable.
Stipend + NATSWe process the payroll for your first five-employee payroll team and also for your 150 employee payroll team in series B with ESOPs and multistate part-time compliance documents.
TankhaPay sets up your PF, ESIC, and PT registrations correctly across every state where you have employees. Salary structures are configured with tax-efficient components from the start, so your team's take-home is maximised without revisiting the structure every quarter.
Monthly salaries are computed with correct PF, ESIC, and TDS. When employees exercise ESOPs, the perquisite tax is computed and reflected in TDS in the same cycle. PT is applied automatically per each remote employee's work state with no manual lookup.
The founder or finance lead reviews and approves the payroll run via maker-checker. Every calculation and ESOP perquisite computation is recorded in an immutable audit log - exactly what a diligence process looks for.
Credited salary to employee accounts. PF ECR, ESIC Challan, PT remittances, and TDS returns filed. Payslips generated within the app. Annual form 16 generated with correct ESOP income mentioned.
The payroll software that works for 10 employees often fails at 100. TankhaPay is the same platform at both ends of the journey, with ESOP management and multi-state compliance that generic startup tools don't have.
Razorpay Payroll and Zoho Payroll don't handle ESOP perquisite tax at exercise. TankhaPay does, which matters the moment your team starts exercising options and your TDS liability changes overnight.
There are fewer than 1% of Indian tech firms that have CMMI level 5 accreditation. Having a payroll services provider that has CMMI Level 5 is one point of diligence for an early-stage company that is at the Series A or B stage.
The same system will manage your payroll from day one to employee number 500 in 15 states having ESOPs and multiple entities - not migration of data at the Series B funding stage.
Run it yourself as a lean startup. When you'd rather have a dedicated payroll team than hire one, switch to managed services on the same platform without starting over.
From ESOP perquisite tax to multi-state remote compliance - the problems startups encounter at every growth stage are handled by the platform rather than discovered in the form of a notice.
Once the employee exercises their ESOPs, the income generated in this regard is taxable as perquisite income under Section 17(2). This income will be subject to deduction as TDS under Section 192 during the month of exercise. TankhaPay does that for you automatically by updating the TDS projection for the employees and reflecting it in Form 16.
A correctly structured salary with HRA, LTA, food allowance, NPS employer contribution, and other tax-exempt components reduces the employee's tax liability without the company spending a rupee more. TankhaPay configures this from setup and keeps it current as tax rules change.
Every state where you have even one employee triggers a PT obligation. TankhaPay applies the correct PT slab for each employee based on their registered work state, files the returns, and alerts you when a new state is entered, so compliance follows hiring automatically.
PF registration, TAN, ESIC at 10 employees, PT in every state, and Shops & Establishments registration - TankhaPay guides first-time founders through every compliance registration before the first payroll run so the audit trail is clean from day one rather than reconstructed before a due diligence.
Most startup payroll tools break or become too expensive as the company scales. TankhaPay handles 10-person seed-stage teams and 500-person post-Series-B organisations on the same platform, with managed outsourcing available when you'd rather not run payroll in-house.
Four steps. Correct from the first run. Scales with you. No dedicated payroll hire required until you decide you want one.
Registrations, salary structure, ESOP scheme particulars, and employee state of work configured before the very first payroll run.
Correct from day oneSalary amount, ESOP perquisite tax, multi-state PT, PF, ESIC, and TDS calculated automatically. No manual search required.
Runs in minutesReviewed and approved by founder/finance head before payout. Anomalies detected before disbursal. Audit trail created automatically.
Investor-ready by defaultSalaries paid. PF, ESIC, PT, TDS – all files before deadline. Payslips and form 16 issued automatically.
Nothing left to chaseNot every feature on a 200-item enterprise checklist. The specific capabilities that matter at seed, Series A, and Series B - built into one platform that doesn't require a switch as you grow.
Correct perquisite computation at exercise, TDS updated in the same cycle, Form 16 with ESOP income correctly included.
HRA, LTA, food allowance, and NPS configured per employee to maximise take-home without increasing CTC.
PT applied per employee work state automatically, with alerts when a new state is triggered by a new hire.
PF, ESIC, TAN, and PT registration guidance so compliance is in place before the first salary is paid.
Conversion of 194J contractors to salaried employees through clean compliance from the day of joining.
Auditable payroll reports on PF, ESIC, PT & TDS, without the need for any reconstruction prior to due diligence.
Payslips, Form 16, PF balance, and investments through a mobile application without raising any HR ticket for routine queries.
The same platform handles 5 and 500 employees without a migration or re-implementation at any funding round.
Run payroll yourself when lean. Switch to a dedicated managed team on the same platform when you'd rather not.
Updated for Labour Code 2025, new ESIC wage definitions, and PT notifications - before the notice, not after it.
Highlighted pills are startup-specific payroll obligations that founders most commonly discover via a notice rather than proper setup.
One platform. Perquisite tax handled. PT compliant in every state your team works from.
From first payroll setup to ESOP tax treatment and multi-state compliance - what startup founders and finance leads actually need to know.
ESOP structure, vesting, taxation at exercise, and how perquisite tax is handled in Indian startup payroll.
How the new 50% wage rule under Labour Code 2025 is pulling more startup employees into ESIC coverage than founders expected.
How to choose HR software as a startup: compliance depth vs. per-employee cost, and what to look for at seed, Series A, and beyond.
The questions startup founders and finance leads ask when they realise payroll compliance is more complex than they expected.
Still have questions? Call 989-198-8811 →
Join 1,000+ businesses running accurate, compliant, investor-ready payroll on TankhaPay - with ESOP perquisite tax, multi-state remote team compliance, and tax-efficient salary structuring built in from the first run.
