Almost every HRMS vendor in India claims to 'automate' payroll. But there's a meaningful gap between software that calculates TDS and software that pays and files it. This guide is a buyer-side checklist to separate the two.
Step 1 — Start with your compliance footprint, not features
List the statutory obligations your business has today. If you're hiring across multiple Indian states, you need multi-state PT, state-specific LWF, and ESI registration per branch. If you have blue-collar or contract labour, PF/ESI coverage looks different from pure white-collar teams. An HRMS that nails only white-collar urban payroll is useless if half your workforce sits on site in Haldia.
Step 2 — Ask 'who makes the payment?'
This is the single most important vendor question. Many Indian HRMS tools stop at generating the challan — your team still logs into EPFO, ESIC, TRACES and the state PT portal to deposit. A truly automated platform deposits the challan, files the return, and downloads the acknowledgement. Get this in writing.
Step 3 — Verify statutory return depth
Ask to see actual filed returns, not demos: ECR file format (with the checksum), Form 24Q .fvu file, ESIC Return of Contributions, and a state PT return. If the vendor can't show a live filing or auto-retrieve acknowledgements from TRACES, they are not filing — they're just computing.
Step 4 — Look for workforce coverage
- Can it run rule-based salary structures for white-collar AND blue-collar in one system?
- Does it handle contract labour and vendor-payroll in the same flow?
- Does attendance connect — biometric, app, geo-fencing — to overtime and LOP in payroll?
- Can it pay commission agents and retainers without awkward workarounds?
Step 5 — Check what's actually included in the price
Many vendors show a low per-employee price, then add charges for: TDS filing, PF filing, ESI filing, Form 16 generation, PT registration per state, contractor management, expense management, onboarding, ATS, BGV, and earned-wage-access. A per-filing or per-module add-on model can triple the quoted price. Ask for the total annual cost inclusive of everything a payroll compliance team needs.
Step 6 — Integration and data portability
- Does it export clean journal entries into Tally, Zoho Books, Xero, NetSuite or QuickBooks?
- Can you pull raw data via API for finance reporting?
- Is there a defined offboarding path if you decide to switch vendors later?
Step 7 — Security and data residency
For India-focused deployments, prefer vendors with ISO 27001 and SOC 2 attestations, AWS/Azure/Google Cloud hosting, and data residency in India. Payroll carries PAN, Aadhaar references (masked), bank details and salary data — a breach is catastrophic.
Step 8 — Treat the demo like a 6-month audit
Bring a sample wage sheet with at least 20 employees — mix of white-collar, blue-collar, contractor, different states, an ESI cross-over employee, a maternity absentee, and a mid-year joiner. Ask the vendor to process one full pay cycle end-to-end in front of you. A polished dashboard that fails on a real payroll is a red flag.
Why we built Vergado
Vergado is India's only fully automated HRMS. It computes, pays and files TDS, EPF, ESI and PT every cycle — no manual portal logins, no per-filing charges. It handles mixed workforces, multi-state deployments, tax-saving benefits, expense management, onboarding and earned-wage-access on a single platform. If your checklist has 'close the compliance loop' on it, we'd like to show you what that looks like.
