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Everything that has to be in place before Frappe HR can run an Indian payroll — from installing the app and building salary structures to PF, ESI, Professional Tax and TDS.
36 checks · 7 sections
First, a point that trips up a lot of people: HR and Payroll are not part of core ERPNext. They live in a separate open-source app called Frappe HR (also known as HRMS, github.com/frappe/hrms), which you install on top of Frappe Framework and ERPNext. Once it is in place you get the Employee master, Salary Components, Salary Structures, Payroll Entry, Salary Slips, leave and attendance. For India-specific statutory deductions — Provident Fund, ESI, Professional Tax and TDS on salary — there is a further companion, the India Payroll app (github.com/frappe/india-payroll), which injects the regional logic and compliance-ready reports. This is a reference — a map of what a complete Indian payroll setup actually involves — not a tick-box tracker. Use it to sanity-check your own configuration, or as the agenda for a setup call with us. Note: the statutory rates, wage ceilings and tax slabs referenced below change with the law; always configure to the current government rules rather than any number quoted from memory.
Confirm HR/Payroll lives in a separate app, not core ERPNext + 4 more
Create an Employee record for each person on payroll + 3 more
Create earning components + 5 more
Build one or more Salary Structures + 4 more
Create the Payroll Period for the financial year + 3 more
Enable the statutory deductions in Payroll Settings / India Payroll + 5 more
Set up the Holiday List(s) + 5 more
All 36 checks across 7 sections as a clean branded Excel — each item with the guidance for why it matters, ready to share with your team. Free, no email required.
Payroll is not in core ERPNext. It comes from the separate open-source Frappe HR app (also called HRMS, github.com/frappe/hrms), installed on top of Frappe Framework and ERPNext. For Indian statutory deductions — PF, ESI, Professional Tax and salary TDS — there is a further companion, the India Payroll app (github.com/frappe/india-payroll), which adds the regional logic and compliance reports.
You define Income Tax Slab records that match the current government rules (India runs both an old and a new regime) and tie them to a Payroll Period. Each employee's Salary Structure Assignment picks the applicable slab. The income-tax deduction component is marked Variable Based on Taxable Salary, so Frappe HR projects annual taxable pay — factoring in employee tax-exemption declarations under the old regime — and spreads the TDS across the pay periods. Keep the slab records updated whenever the Finance Act changes.
Professional Tax is state-specific, so the India Payroll app drives it from the Employment State field on each Salary Structure Assignment, which becomes mandatory once PT is enabled. The app supports both monthly-slab states and half-yearly states such as Kerala and Tamil Nadu. Configure each state's slabs to the current rules; an employee who transfers states mid-year gets the correct PT via a fresh assignment.
Once the setup is done, monthly payroll is: confirm attendance and any Leave Without Pay for the period, create a Payroll Entry filtered to the employees you're paying, generate the Salary Slips, review them, then submit (which books the salary expense via accrual journal entries). Finally, create the Bank Entry for the actual payout and share slips with employees. Submitting slips records the expense but does not move money — the bank transfer is a separate step.
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Kochi (Kadavanthra & Infopark) · Thiruvananthapuram · across India & overseas · In business since 2011