Is your payroll compliant with the new Labour Codes?
Since 21 November 2025, basic pay plus dearness allowance must be at least half of total remuneration. Most Indian payrolls were built with basic at 30–40%, which means they are now under-contributing to provident fund without anyone noticing.
Paste your roster below. This tells you exactly which employees breach the rule and what it is costing you.
What the 50% wage rule actually says
The Code on Wages introduced a single definition of "wages" across provident fund, gratuity and other statutory contributions. Under it, basic + dearness allowance + retaining allowance must be at least 50% of total remuneration. Where the named components fall short, the shortfall is added back before contributions are computed.
The consequence is that your PF liability is no longer determined by the basic figure on the salary sheet. If basic is 35% of gross, contributions are still calculated on 50%. Payroll software configured before November 2025 generally does not do this, so the amount deducted and remitted is lower than the amount legally due — and the gap accrues silently, every month, for every affected employee.
Arrears of provident fund attract interest at 12% per annum under section 7Q and damages of up to 100% of the arrears under section 14B. The exposure grows the longer the structure stays unchanged, which is why finding out now matters more than getting it exactly right later.
What this audit checks
- The 50% wage floor — per employee, with the resulting PF shortfall
- Missing UANs — a single missing UAN blocks the whole ECR upload, not just that line
- Missing PANs — triggers TDS at 20% under section 206AA, recoverable from the employer
- ESI threshold errors — including employees wrongly marked exempt below ₹21,000
- ESI half-year continuation — coverage must run to the end of the contribution period
- Professional tax by state — including Maharashtra's February top-up and its exemption for women
- Minimum wage breaches, negative net pay, and unusually low take-home
Questions
Is my salary data uploaded anywhere?
No. The entire calculation runs in your browser using a script loaded with the page. Nothing you paste is transmitted to us or to anyone else — you can confirm this by opening your browser's network tab while running the audit. This is the main reason the tool works the way it does.
How accurate is it?
The engine behind it is the same one used for Klair's own payroll operations, with a suite of 49 tests covering the PF ceiling, the EPS cap, ESI rounding, loss-of-pay proration, the income-tax slabs and the pre- and post-November-2025 wage definitions. That said, it works from the figures you paste and cannot know your establishment's particulars — it is not a substitute for your accountant.
What does the ₹99 report add?
The free audit tells you how many employees breach each rule and what the total exposure is. The paid report adds the per-employee breakdown — who breaches, by how much, what their basic should be, and a remediation table you can print and hand to whoever fixes the payroll.
Does the rule apply to my company?
The wage definition applies broadly under the Code on Wages. The PF consequences bite where EPF applies, which generally means establishments with 20 or more employees, though voluntary coverage exists. If you are close to that threshold, check with your accountant.
We use payroll software. Isn't this handled?
Often not. The rule changed in November 2025 and many systems still compute PF on the stated basic rather than the statutory floor. Running the audit takes a minute and either confirms you are fine or shows you exactly where you are not.