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Did you know that one error in your EPF report can lead to penalties from ₹10,000 to ₹100,000 based on EPFO’s AI-powered audit? Add to this the new 2-day full and final settlement provisions, updates to minimum wages, mandatory digital reporting, and security requirements under the DPDP Act. So, having payroll software for small businesses becomes even more important.
Online payroll software for SMEs can automate most of the payroll components and store data securely in cloud systems. It can also help you track attendance and leave balances of employees in one system. Lastly, the software provides real-time updates related to regulatory changes. In this guide, we compare the top 10 payroll software for SMEs based on features such as compliance, integration, EPF, ESI, PT, and LWF automation, among others.
What are the Top 10 Payroll Software for Small Businesses in India?
factoHR, greytHR, Zoho Payroll, Keka, and RazorpayX Payroll are some of the most popular options for Indian SMEs, with manufacturing and startup businesses leaning toward factoHR and HROne, and others favoring RazorpayX Payroll and Keka.
| Sr No. | Product | Headquarter | Best For |
|---|---|---|---|
| 1 | factoHR | Rajkot, Gujarat | Compliance-heavy payroll for Indian SMEs with mobile ESS and field team support |
| 2 | greytHR | Bangalore, Karnataka | Compliance-first payroll for SMEs – free plan available for up to 25 employees |
| 3 | Zoho Payroll | Chennai, Tamil Nadu | SMEs already using Zoho Books, Zoho People, or Zoho One ecosystem |
| 4 | Keka | Hyderabad, Telangana | SMEs wanting modern payroll bundled with full HRMS in one platform |
| 5 | RazorpayX Payroll | Bengaluru, Karnataka | Startups and tech-first SMEs needing instant salary disbursals and contractor payouts |
| 6 | HROne | Noida, Uttar Pradesh | Multi-location SMEs needing AI-powered payroll with heavy compliance automation |
| 7 | Zimyo | Gurugram, Haryana | Affordable SMB payroll processed in 5 clicks with 50+ HR modules included |
| 8 | Pocket HRMS | Navi Mumbai, Maharashtra | AI-powered payroll with smHRty chatbot for blue-collar and mid-size SMBs |
| 9 | Qandle | Delhi NCR | Growing SMEs scaling payroll from 20 to 200 employees without added complexity |
| 10 | SumHR | Mumbai, Maharashtra | Cloud-first micro-SMEs and early startups wanting simple payroll with free base plan |
1. factoHR
One of the best payroll software for small businesses, factoHR automates EPF, ESI, PT, LWF, and minimum wages. HR teams like how it integrates with attendance, leave, expense management, timesheet, and travel. Employees appreciate the ESS portal because it gives them access to their leave balance and payroll information. Additionally, owners can make more informed decisions by analyzing 200 plus payroll reports.
Features
| Intuitive and AI-powered ESS portal | One-click payroll with multi-entity support |
| Wizard-driven payroll process and formula-based policy engine | Complete integration with PMS, LMS, timesheets, and ERP and accounting systems. |
| ISO 27001 and SOC 2 certified with 256-bit AES encryption | Updates on EPF, ESI, PT, and LWF. |
Pricing
- Free plan: For up to 20 employees.
- Core: ₹4,999/month (up to 50 employees), ₹69/additional employee/month, billed quarterly.
- Premium: ₹5,999/month (up to 50 employees), ₹89/additional employee/month, billed quarterly.
- Ultimate: ₹6,999/month (up to 50 employees), ₹119/additional employee/month, billed quarterly.
Best for
Ideal for IT startups, firms involved in manufacturing, small schools, and hospitals
2. greytHR
greytHR is one of the most trusted payroll solutions in India, with 30,000+ companies using it for more than 25 years. It also supports ECR generation for EPF and ESI. Their free plan makes it one of the affordable payroll solutions for SMEs. Lastly, features like MIS reports also make it a good fit.
Features
- ESS portal
- MIS reports
- Form 24Q and Form 16 support
- Single-click payroll processing
- ECR generation for EPF and ESI along with PT and LWF support
Pricing
- Essential: ₹2,495/month (up to 50 employees), ₹45/additional employee/month.
- Growth: ₹4,495/month (up to 50 employees), ₹85/additional employee/month.
- Custom pricing under the premium plan.
Best for
Startup IT firms and NGOs that need affordable software.
3. Zoho Payroll
Zoho Payroll is the right pick for teams already working on Zoho Books or Zoho People, as it connects with both natively. This integration enables it to collect data from payroll and add it to Zoho Books. Its multilevel approval workflow helps HR avoid any errors in calculating payroll or gathering data.
Features
- ESS portal
- TDS and Form 16 support
- Multi-level salary approval workflow
- Native sync with Zoho Books, Zoho People, and Zoho Expense
- Automated PF, ESI, TDS, PT, LWF, and gratuity calculations
Pricing
- Free: ₹0/month up to 10 employees.
- Standard: ₹1,250/month (25 employees), ₹50/additional employee/month; ₹1,000/month billed annually.
- Professional: ₹3,750/month (50 employees), ₹75/additional employee/month; ₹3,000/month billed annually.
- Premium: ₹5,000/month (50 employees), ₹100/additional employee/month; ₹4,000/month billed annually.
Best for
Businesses already on Zoho Books or Zoho One that want payroll built into their existing ecosystem without a separate platform.
4. Keka
Another popular online payroll software for small businesses, Keka is easy to use, and even non-finance professionals can manage payroll on it. It consolidates attendance, leave, expense, performance, and recruitment data into a single system. It is one of the best options for organizations that need an integrated HR and payroll software.
Features
- F&F support
- Digital payslip
- Automated PF, ESI, TDS, and Professional Tax deductions
- GPS and IoT-based attendance with biometric device integration
Pricing
Offers customized plans based on your needs.
Best for
Startups in the IT and SaaS niche.
5. RazorpayX Payroll
RazorpayX Payroll automates the full salary cycle from calculation to bank disbursement, filing TDS, PF, PT, and ESIC in the same workflow. It also handles contractor and freelancer payments with automatic TDS deduction. HR teams like its dashboard for managing a mixed workforce.
Features
- Retroactive payments
- Bulk payroll processing
- Reimbursements approvals via WhatsApp
- Entire payroll process in one workflow
- Contractor and freelancer payments with auto deductions for TDS
Pricing
- Prime: ₹2,499/month (up to 20 employees).
- Elite: ₹5,499/month (up to 50 employees), ₹150/additional employee/month.
- Enterprise: Custom pricing.
Best for
Businesses already using RazorpayX for processing payments
6. HROne
HROne streamlines 127 HR processes across recruitment, payroll, attendance, expenses, and engagement. One of the leading payroll software for SMEs, it provides a single inbox where HR professionals can access all workforce-related processes. It converts hours saved into rupees, giving CHROs a clear breakdown of ROI.
Features
- InboxForHR mobile task feed for managers and employees
- CLRA contract-labor tracking for manufacturing operations
- ROI Dashboard converting payroll savings into rupee figures
- Full PF, ESI, TDS, PT compliance with state-level configuration
- Multi-entity payroll with group payout validation
Pricing
- Basic: ₹₹4,950/month up to 50 users.
- Professional: ₹6,500/month up to 50 users.
- Enterprise: Custom quote.
Best for
Mid-market manufacturing, BFSI, and multi-location businesses that need deep compliance, plant-level attendance, and board-level payroll reporting.
7. Zimyo
Zimyo is one of the leading online payroll software solutions for SMEs. Its 50+ modular features cover payroll, LMS, performance, and engagement, and you only activate and pay for what you need. ISO/IEC 27001:2013 certified, hosted on AWS in PCI DSS-compliant environments, it meets the security requirements under GDPR and DPDP acts as well.
Features
- ESS portal
- ISO/IEC 27001:2013 certified
- Real-time attendance tracking
- Automated PF, ESI, TDS, PT compliance
- Configurable approval workflows and centralized leave calendar
- 50+ modular functions: payroll, LMS, performance, and engagement
Pricing
- Basic: ₹80 per user per month. *Minimum billing of ₹4,000.
- Standard: ₹120 per user per month. *Minimum billing of ₹6,000.
- Enterprise: ₹160 per user per month. *Minimum billing of ₹8,000.
Best for
Growing SMEs in media, hospitality, and consumer businesses that want modular HRMS and payroll.
8. Pocket HRMS
Pocket HRMS is India’s first AI-powered HRMS, with its ML-driven smHRt Payroll engine processing salaries in three clicks and flagging calculation errors. Its smHRty chatbot handles employee queries – payslip downloads, leave balances, policy questions – without HR team intervention. Trusted by 1,500+ companies, it suits mid-sized businesses that want accurate payroll and AI-assisted employee support on one platform.
Features
- smHRt Payroll
- Form 16 and salary register
- PF, ESI, TDS, LWF, PT compliance
- smHRty AI chatbot for employee queries
- GPS-tagged attendance and leave with biometric device integration
- ISO 27001 certified, 256-bit AES encryption, two-factor authentication
Pricing
- Standard: ₹2,995/month (up to 50 employees), ₹60/additional employee/month.
- Professional: ₹4,495/month (up to 50 employees), ₹90/additional employee/month.
- Premium: Custom pricing for larger organizations.
Best for
Mid-sized businesses that want AI-assisted HR and payroll in one platform, especially lean HR teams that handle high daily employee query volumes.
9. Qandle
One of the leading SME payroll solutions, Qandle helps configure leave policies and salary components. It is widely recognized for its configurability, as most of the payroll components can be configured without expertise in finance. Another popular feature is its Qanbot chatbot, which lets employees apply for leave and raise queries.
Features
- Easy to configure
- Qanbot (AI-powered chatbot)
- EPF, ESI, TDS, PT automation
- Team directories and organizational charts
- Shift planning, timesheet, and GPS as add-ons
Pricing
- Foundation: ₹2,950 per month up to 50 employees. ₹59 per month per additional employee.
- Regular: ₹4,950 per month up to 50 employees. ₹99 per additional employee.
- Plus: ₹6,200 per month for up to 50 employees. ₹124 per additional employee.
- Premium: ₹8,000 per month for up to 50 employees. ₹160 per additional employee.
- Enterprise: pricing available upon contact.
Best for
Firms that need an easy-to-use solution with a self-service portal.
10. sumHR
SumHR is a straightforward online payroll software for small business teams that want clean HR and payroll without enterprise complexity. Its 5-click payroll covers salary calculation, compliance deductions, draft saves, trial runs, bulk full and final settlements, and retroactive edits. The ESS portal lets employees manage their own payslips, IT declarations, leaves, and profiles without raising a ticket.
Features
- ESS portal
- Payroll outsourcing
- Bulk F&F settlement
- Automated deductions
- Five-click payroll process
- Biometric device integration
Pricing
- Startup: ₹49 per user per month. (Billed annually).
- Basic: ₹69 per user per month. (Billed annually).
- Advanced: ₹119 per user per month. (Billed annually).
- *All plans are available for free if you have a Jupiter Salary Account.
Best for
Growing businesses that need simple payroll service providers without complex integrations.
Evaluate and Choose the Best Payroll Software for SMEs & MSMEs
We have compared these SME payroll solutions based on integration, starting price, compliance support, and G2 and Capterra ratings.
| Software | India Compliance Fit | HRMS Integration | Support Confidence | Starting Price (₹) | Free Trial | G2 Rating | Capterra Rating |
|---|---|---|---|---|---|---|---|
| factoHR | Excellent | Full HRMS suite | Strong | ₹4,999/ month (50 emp.) | No | 4.6 | 5 |
| greytHR | Excellent | Modular | Strong | Free (up to 25 emp.) | Yes (7 days) | 4.4 | 4.5 |
| Zoho Payroll | Very Good | Zoho ecosystem | Good | ₹60/emp./month | Yes (14 days) | 4.4 | 4.4 |
| Keka | Very Good | Full HRMS suite | Good | ₹99/emp./month | Yes | 4.5 | 4.6 |
| RazorpayX Payroll | Very Good | Fintech + HRMS | Good | ₹2,499/ month (20 emp.) | Yes (free plan) | 4.3 | 4.4 |
| HROne | Excellent | Full HRMS suite | Strong | ₹4,950/ month (50 emp.) | Yes | 4.7 | 4.5 |
| Zimyo | Good | Modular | Good | ₹4,000/ month (80 emp.) | Yes (14 days) | 4.4 | 4.4 |
| Pocket HRMS | Very Good | Full HRMS suite | Good | ₹2,995/ month (50 emp.) | Yes | 4.5 | 4.5 |
| Qandle | Good | Modular | Good | ₹999/ month (25 emp.) | Yes (14 days) | 4.3 | 4.3 |
| SumHR | Good | Modular | Moderate | ₹49/emp./month | Yes | 4.2 | 4.3 |
SME Payroll Solutions in India: What are 8 Must-Have Features?
Look for these 8 must-have features when you are considering any payroll software for small business in India.
- Compliance with Indian statutory laws. EPF, ESI, gratuity, minimum wages, PT, TDS, DPDP, and the four new labor codes.
- ESS portal. Employee self-service portal that allows for leave application, payslip download, attendance marking, and submitting reimbursement claims.
- Flexible payroll engine. A policy engine that can configure policies for different states and even corporations in case of South Indian states like Tamil Nadu.
- Integrated HR and payroll. An online payroll software that connects with PMS, LMS, timesheet, HRMS, and travel modules.
- Payroll reports. Customizable reports and analytics.
- Face recognition and selfie punch. A must for startups with work-from-home arrangements.
- AI chatbot. For employees and HR so that they can ask queries and summarize reports.
- Secure, ISO and SOC 2-certified cloud storage. To protect payroll information and employee data and to comply with the Digital Personal Data Protection Act (DPDP).
What Should I Consider when Choosing Payroll Software for My Small Business?
Knowing why most small businesses fail at payroll shows exactly where software helps. Consider these 7 factors when you purchase any SME payroll solution.
- Identify your compliance needs. Know the laws and their complexities relative to your region. For example, UP has a different LWF structure than Gujarat.
- Your current and projected headcounts. Estimate how many employees you are likely to have at your firm for saving per employee cost.
- Check for integrations. Look for systems that easily integrate with your existing internal and external systems.
- Check the ESS portal. Check which features an ESS portal offers. If you are a firm with a WFH arrangement, you would need geofencing and other similar features.
- Evaluate support. Your preferred vendor should be able to provide you with support during peak times, like at the end of the financial year.
- Check compliance reports. Make sure that you check the compliance reports during the free trial.
- Ask about data sensitivity. Your payroll data, like PAN information and other relevant details, is sensitive. So, consider solutions with end-to-end encryption.
Common Payroll Mistakes Indian SMEs Make
These errors show up in EPFO audits and penalty notices. Each one is avoidable with the right system.
| Mistake | What Goes Wrong | Penalty Exposure |
|---|---|---|
| Wrong PF wage base | PF calculated on Basic only, not the updated Code on Social Security definition | Damages up to 100% of arrears under Section 14B, EPF Act |
| ESI threshold error | Employees earning wages above ₹21,000 gross still included in ESI contributions | 12% annual interest on miscalculated contributions |
| TDS under-deduction | Old slabs applied, or assumed old regime, or reported unclaimed taxes | ₹200/day under Section 234E; prosecution risk under Section 276B |
| Missing state PT filings | Professional Tax returns skipped in applicable states | State fines from ₹1,000 to ₹10,000 per default |
| No LWF deduction | Labour Welfare Fund contributions missed for applicable states | Retrospective demand plus interest |
| Incorrect ECR submission | Wrong UAN mapping or wage data in EPFO ECR file | ECR rejection, delayed employee PF credits, EPFO audit |
| Incorrect Form 24Q | TDS returns filed with wrong PAN, salary, or tax amounts | ₹10,000 to ₹1,00,000 penalty under Section 271H |
| Low basic salary structure | Basic below 50% of CTC once Labour Code wage rules are enforced | Higher PF and gratuity back-pay demands on audit |
Why factoHR is the Best Choice for Indian SMEs
factoHR is trusted by 4,000+ customers and 2.7 million employees, including Wipro, Tata Steel BSL, Mercedes-Benz, Denso Group, BSE, Bajaj Auto, Siemens, and Cycle Agarbatti. This client base spans manufacturing, automotive, BFSI, and consumer sectors.
The platform handles multi-entity payroll under a single login, geofenced mobile attendance for field workforces, Labour Code 2025-ready wage definition handling, and full retirement benefits management covering PF trusts, gratuity, and superannuation. For a manufacturing SME running two plants under a BSE-listed holding company, these are operational requirements, not optional features. Evaluate the current options and make an informed decision.
FAQ
What is the Best Payroll Software for Small Businesses?
There are a number of available options, including factoHR, Zoho, GreytHR, and RazorpayX, among others. factoHR is the overall best HR software for IT, while GreytHR is a good choice for startups. Zoho and RazorpayX work well with businesses that are already in their ecosystem.
What Features Should Indian SMEs Look for in Online Payroll Software?
Look for LWF, PT, TDS, EPF, ESI, and labor codes compliance support along with Form 16 and Form 24Q generation. Additionally, prefer software that integrates attendance with payroll and an ESS portal with ISO 27001 certification.
How Much does Payroll Software Typically Cost for SMEs in India?
The cost varies as per your needs. Some software like greytHR, Zoho Payroll, and RazorpayX offer free plans. Approximately, plans cost between ₹2,495 and ₹6,999 per month for 50 employees. factoHR: ₹4,999.
Is Cloud-Based Payroll Software Safe for Indian SMEs?
Yes. Cloud-based online SME solutions like factoHR, Pocket HRMS, Zimyo, and others are safe as they offer ISO 27001 certification, 256-bit AES encryption, two-factor authentication, and role-based access control.
Does Indian Payroll Software Integrate with Tally or Zoho Books?
Yes. Online HR and payroll software like factoHR, Zoho, GreytHR, and RazorpayX Payroll support integration with accounting apps. In particular, factoHR integrates with Tally and QuickBooks and supports API-based integrations.
Can I Switch Payroll Software Mid-Year?
Yes. However, you need to make sure that your payroll history is clearly exported to the new software. factoHR supports bulk import so that you can easily import data with easy-to-use templates. However, it’s best if you change the software at the beginning of a new financial year.
What’s the ROI of Payroll Software for a 50-Employee Company?
A cloud-based payroll software costs between ₹3,000 and ₹6,000. It saves approximately between ₹15,000 and ₹35,000 compared to manual payroll processing.
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