The fast population growth rate in India has made the country one of the most beautiful flowers attracting birds and bees in the name of multinational investment companies to it.

Having more than one billion residents, the Indian economy both in the private and government sectors is becoming globalized at a very fast pace. However, the greatest hindrance for many businesses in India is the many restrictions and hefty regulations in the economic environment.

The encouraging bilateral trade with the US has made India a great destination for many investors thus giving rise to numerous small businesses which have headaches in developing payrolls.

Small Businesses Vs Payrolls

As long as you have a small business in India, the first challenge which you will have to overcome is running an effective payroll program. Irrespective of the number of employees you have, having a well-running payroll system is a major key to staying on top of your various competitors in the same field.

In an environment where competition is the order of the day due to the large population, you must come up with strategies that will ensure you are somewhere on the market ladder.

Coming up with a payroll running system still remains a nightmare to many Indian small businesses which has left them confused and tired; nevertheless, there is payroll software like Hivepayroll which is one of the best payrolls for India that has helped many businesses.


Why Do Some Businesses Outsource Their Payroll?

One thing which is constant when it comes to payroll processing in India and in every other country is the headache that comes with running an effective payroll system. Even the most experienced professional will tell you developing the system is not easy, especially in larger businesses.

The main reasons why many outsource payroll services in India are:

• Fast turnaround – many don’t want to spend weeks coming up with a monthly payroll
• It streamlines all payroll processes
• In the long run it saves your money – when penalties are eliminated, then some money is saved
• You don’t have to invest so much in the IT infrastructure
• There is a high level of accountability
• Your business strictly adheres to compliance and other Indian statutory requirements
• There are very few risks of encountering penalties as a result of non-compliance
• The employer will have a speedy and very efficient resolution of all employee issues
• You will always have error-free documentation and other reports

However, most small businesses in India that have few employees choose to have in-house payroll mostly because of the following:

• They want to be protective of their wage information
• Most want to do some last-minute changes and hence want to be in control of the system
• Some tend to believe that it is cheaper and cost-effective compared to outsourcing

Payroll Running Tips for Small Businesses in India

While many businesses are outsourcing these payroll services because they think it is a tough thing, you can achieve the same results they are getting by following these tips and by using the new age and the most modern payroll software like Hivepayroll which is the most reliable and best payroll for India.

Tip 1: Accurately do worker’s classification

This is where you place every worker in their category; either permanent employees or contractors. Ensure that no contractor is on your payroll. With employees, follow all the Indian minimum wages laws.

Tip 2: Digitalize your payroll system

This will enable you to avoid some common mistakes. Choose accurate software like Hivepayroll to calculate the payments and taxes.

Tip 3: Have all the details about your employees

These details will help your software come up with accurate payment and other detailed information.

Tip 4: Have an accurate track of your employees’ reporting

This can be done perfectly by Hivepayroll especially if you have hourly waged employees.

Tip 5: Always be updated

The Indian government comes up with new laws and wage rates now and then thus updated. The beauty of using software like Hivepayroll is that you will always be updated.

Tip 6: Have regular payroll audits

This helps you ensure you have the right employee information and that your records are well set and accurate.


It is advisable to have an in-house payroll if you have less than 50 employees in your small business. Nevertheless, ensure you involve correct employees’ wages, Indian government taxes, and laws else you might have unnecessary penalties and interests. This can make the system more expensive than outsourcing.

Leave a Reply

Your email address will not be published. Required fields are marked *