Updated 16 October 2026. HR compliance in Kerala depends on the employer’s activity, location, workforce and the period being reviewed. Start with an applicability assessment, then keep records that connect each employment decision and payroll calculation to the rule and source that apply.
India’s four Labour Codes took effect on 21 November 2025. Central rules and implementing directions have been published during 2026; Kerala-specific matters must also be checked against current State notifications and the rules of the appropriate government. From 1 April 2026, salary-TDS events fall under the Income-tax Act, 2025 and Income-tax Rules, 2026. Do not carry a pre-2026 form or deadline into a later period without checking the official portal.
1. Decide which requirements apply
Build an establishment profile for every worksite: business activity, industry, location, headcount, worker categories, contractor use, wage levels and existing registrations. Map each applicable Central, Kerala, local-body and sector-specific requirement to an owner, due date, portal and evidence file. Review that map when the business opens a site, changes its activity or crosses a coverage threshold.
Do not decide coverage from headcount alone. The relevant threshold, employee definition, wage base and exceptions can differ by statute. Keep a written coverage decision and the source used, especially when a new employee or contractor changes the facts.
2. Prepare employment terms and onboarding records
- Give the employee a written statement of role, pay components, work location, reporting line, working hours, leave, notice and applicable policies.
- Collect only the personal information needed for employment and statutory processing; explain the purpose and restrict access to sensitive data.
- Record joining date, role, worksite, employee category, salary structure and approved changes in a controlled HR system.
- Ask whether a new employee already has a UAN or ESIC insurance number. Link the existing record where appropriate; do not create duplicates to resolve a mismatch.
- Complete required nominations and benefit records using the current form and statutory timeline applicable to the employee.
- For Kerala shops and commercial establishments, check the current registration and employee-record instructions with the Labour Commissionerate and applicable State rules.
3. Run payroll using separate legal bases
Keep contractual gross pay, statutory contribution wages and taxable salary as separate calculations. They may use different definitions. Validate attendance, leave, overtime, variable pay, new joiners, exits and approved salary changes before the payroll run.
| Obligation | Payroll control |
|---|---|
| EPF / EPS | Confirm establishment and member coverage, eligible contribution wages, applicable ceiling, EPS status and the current ECR instructions. Reconcile employee-level calculations to the filed ECR and payment. |
| ESIC | Check establishment and employee coverage, insured-person record, ESI contribution wages and current contribution rates. Reconcile the monthly contribution record and payment to payroll. |
| Kerala Professional Tax | Assess the half-yearly income slab under the revised schedule and identify the correct local body. Payment channels, return requirements and due dates are local-body specific. |
| Kerala welfare funds | Identify the applicable board and scheme. The Shops and Commercial Establishments Workers’ Welfare Fund Board is separate from the Kerala Labour Welfare Fund Board; coverage, amounts and payment periods are not interchangeable. |
| Salary TDS | Calculate tax for the applicable tax year and employee’s tax profile. For salary events from 1 April 2026, use the Income-tax Act, 2025 forms and instructions; the Income Tax Department calls the salary-TDS quarterly statement Form 138 (earlier Form 24Q). |
The revised Kerala Professional Tax schedule effective 1 October 2024 is nil up to ₹11,999 per half-year; ₹320 for ₹12,000–₹17,999; ₹450 for ₹18,000–₹29,999; ₹600 for ₹30,000–₹44,999; ₹750 for ₹45,000–₹99,999; ₹1,000 for ₹1,00,000–₹1,24,999; and ₹1,250 at ₹1,25,000 and above. The constitutional annual ceiling is ₹2,500. Confirm the assessment and payment process with the responsible local body.
4. Track payments and filings
For a typical covered establishment, EPF ECR and payment are generally due by the 15th of the following month. ESIC Regulation 31 provides 15 days after the end of the contribution month for payment. Salary TDS is generally deposited by the 7th of the following month, with a separate 30 April deadline for March deductions by non-government deductors. Confirm the current rules, applicable exceptions and tax period before filing.
For TDS events governed by the Income-tax Act, 2025, the salary statement is Form 138 (earlier Form 24Q). The published quarterly due dates are 31 July, 31 October, 31 January and 31 May. Earlier periods governed by the Income-tax Act, 1961 use the forms and procedures applicable to those periods. PT, welfare-fund, POSH, shop and safety obligations can have separate schedules, so do not put them on one assumed monthly or annual cycle.
Save the accepted return, payment confirmation, acknowledgement or challan, and the employee-level calculation. Reconcile the totals to the payroll ledger and bank payment. Where a submission is rejected, keep the error and ticket reference and track the correction to acceptance.
5. Maintain records and employee protections
Maintain attendance, wage, leave, overtime, contribution, tax, safety and employment records in the form required by the applicable law and rule. A record should be retrievable by employee, worksite and pay period. Do not assume that a legacy register form or blanket six-year retention rule applies to every record after a change in law; check the relevant rule and retain older evidence for open audits, claims or proceedings where necessary.
For POSH compliance, maintain the required Internal Committee and complaint process when the Act applies. Limit access to case files, preserve confidentiality and follow current training and reporting requirements. For factories and other safety-regulated worksites, maintain the risk assessment, training, incident and inspection evidence required for that activity.
6. Manage exits and changes
For resignation, retirement or termination, reconcile salary through the last working day, leave and other contractual balances, applicable statutory benefits, notice arrangements, tax records and final settlement. Update EPFO and ESIC records using the current portal process. Give the employee required statements and certificates under the rules that govern the relevant period. Gratuity eligibility and timing depend on the applicable law and facts; the familiar five-year rule has statutory exceptions and should not be applied mechanically.
Monthly HR review checklist
- Reconcile attendance, leave, overtime and payroll approvals.
- Check employee and establishment coverage when facts change.
- Review EPF, ESIC and tax calculations against employee-level records.
- Pay contributions and tax by the current official deadline; record proof.
- Check local-body PT and welfare-board calendars separately.
- Close filing rejections, employee data corrections and open inspection requests.
Primary sources: Ministry of Labour: Labour Codes, Kerala Labour Commissionerate updates, EPFO, ESIC, Income Tax Department: Form 138, Kerala LSGD Profession Tax FAQ and Kerala welfare boards.
Use our payroll guide, compliance calendar and recordkeeping guide for more detail. For calculators, see EPF, ESIC and Kerala Professional Tax. For employer-specific support, contact GHR Consultancy.