Attendance and Payroll Software India: 2026 Labour Code Guide

Attendance and Payroll Software India: 2026 Labour Code Guide

There is a 42-worker auto-components unit in Ludhiana whose owner is doing everything the way it has always been done. Basic pay is 35% of CTC, the rest sits in HRA, conveyance and a large "special allowance" — deliberately, to hold down PF and gratuity. Attendance is a paper register at the gate, re-keyed into Excel around the 3rd. Roughly a third of the shop floor joined on a verbal understanding, with no appointment letter. Salary credits land between the 8th and the 12th. A full-and-final settlement takes about a month.

Under the Labour Codes, four of those things are now non-compliant at once. That is why owners are searching for attendance and payroll software India can actually trust — not for features, but for an answer to a simpler question: what applies to me?

This guide answers that question properly. You will get the headcount thresholds that decide whether a Code touches you at all, the state-by-state reality of which rules are actually notified, the wage definition stated the way the statute states it (most pages state it backwards), the exact registers and forms, the payment deadlines, the real penalty bands — and an honest comparison of buying HR SaaS versus building a system you own.

Every claim below is tied to a section, a gazette number or a named source. Where the answer is "it depends on your state", we say so instead of flattening it.

Quick answer: what applies to your establishment, by headcount

Before anything else, count your workers. Almost every argument on the internet about the Labour Codes is really an argument between people describing establishments of different sizes.

Your headcount	What is triggered
Any size (mines, docks, ports; hazardous occupations extendable to a single employee)	OSH Code can apply regardless of headcount
Under 10	OSH Code s.1(4) does not pull you in. Code on Wages obligations on wages, timelines and records still apply. Your state Shops & Establishments Act may independently require appointment particulars. ESI is available on a voluntary opt-in basis
10 or more workers	OSH Code applies — including s.6(1)(f) appointment letters and the statutory registers. ESI threshold met
20 or more employees	EPF applies — now on headcount alone, no longer restricted to scheduled industries
20 or more workers	Grievance redressal committee required
50 or more workers	Contractor licence requirement engages

Two more questions decide the rest:

• Which state are you in? Labour is on the Concurrent List. For an ordinary MSME the "appropriate Government" is your state, not the Centre.
• Which sphere are you in? The Central Rules bind where the Central Government is the appropriate Government — PSUs, railways, mines, ports, banking, insurance. A private auto-components unit in Ludhiana is not in that list.

Get those three answers — headcount, state, sphere — and you can stop reading generic advice and start acting on what actually binds you.

Are the new Labour Codes actually in force, and from what date?

Yes, and the date is verifiable. S.O. 5322(E), published in the Gazette of India, brought the Codes into force on 21 November 2025 (see the gazette PDF on egazette.gov.in and PIB release PRID 2192463).

One nuance almost nobody prints: S.O. 5322(E) did not switch on every section of every Code. For the Code on Wages it brought into force sections 1–41, sub-sections (4)–(9) of section 42, sections 43–66, parts of section 67 and sections 68–69. So the accurate sentence is "the Codes commenced on 21 November 2025" — not "every provision of all four Codes is live".

Then came the rules. On 8 May 2026 the Centre notified the Code on Wages (Central) Rules 2026, the Industrial Relations (Central) Rules 2026 (G.S.R. 342(E)) and the Social Security (Central) Rules 2026, with the OSH (Central) Rules 2026 at 8–9 May. Drafts had been pre-published on 30–31 December 2025.

The date that is not law: 1 April 2026

You will find page after page stating that the Codes reached "full enforcement from 1 April 2026". No S.O. or G.S.R. ever set that date. It circulated as an expected date for completing rule notification, and it passed with most state machinery unfinished — the Central Rules themselves only landed on 8 May 2026. Any article presenting 1 April 2026 as a legal deadline is repeating a press briefing as if it were statute.

The framework is still moving, month by month

If your instinct is "let it settle first", look at the last eight weeks:

• 29 June 2026 — the Centre notified the new EPF, Pension and EDLI Schemes 2026 (G.S.R. 525(E), 526(E) and 527(E)), superseding the 1952, 1995 and 1976 schemes, effective 1 July 2026.
• 4 August 2026 — corrigenda issued, fixing ten drafting errors in the Pension Scheme.
• 6 August 2026 — Andhra Pradesh notified its final OSH Rules.
• 10 August 2026 — draft ESI (General) Regulations, 2026 opened for public comment.

The EPF scheme sitting behind every Indian payslip since 1952 was replaced eight weeks ago and corrected two weeks ago. "Waiting for it to settle" is not a strategy; it is a description of the next several years.

My state hasn't notified its rules — what do I follow meanwhile?

This is the single most useful paragraph in this guide, and it is missing from every vendor and law-firm page we checked.

As of 11 July 2026, only four states — Arunachal Pradesh, Gujarat, Bihar and Meghalaya — had notified final rules under all four Labour Codes, according to a Labour Ministry official quoted by The Tribune. We checked that against primary sources rather than taking it on trust:

State	Status as verified
Arunachal Pradesh, Gujarat, Bihar, Meghalaya	Final rules notified under all four Codes (as of 11 Jul 2026, The Tribune)
Maharashtra	DRAFT rules on the state's own portal, labour.maharashtra.gov.in — gazetted 28.04.2026, comments open to 12.06.2026
Karnataka	DRAFT — Code on Wages, IR and OSH (Karnataka) Rules 2026, notifications dated 23 Jan 2026
Andhra Pradesh	Final OSH Rules notified 6 Aug 2026

A widely-syndicated 2026 guide lists Maharashtra, Karnataka, Madhya Pradesh and Delhi as having complete state rules. Maharashtra's own labour department portal said otherwise. That is the difference between reading a summary and opening the source.

So what do you do in the meantime? The Ministry of Labour & Employment's own FAQs state the position: until the state notifies its rules, the old rules continue to apply under section 6 of the General Clauses Act, 1897. Repeal does not wipe out the subordinate machinery instantly; the earlier rules keep operating in the gap.

Read that carefully, because it cuts both ways:

• The obligations bind. The Codes commenced. Wage definitions, payment timelines and the duty to issue appointment letters are live statutory duties.
• The local paperwork format often doesn't exist yet. If your state has not prescribed its forms, you follow the existing rules' formats meanwhile — and you build your records so they can be re-shaped into whatever your state finally prescribes.

That is a design instruction, not a legal loophole. Keep your attendance and wage data in a structured database that can print any prescribed form, and a state notification becomes a one-day template change instead of a six-month re-implementation.

Does the labour code really require basic pay to be 50% of CTC?

No. That sentence is backwards, and it is the most repeated error in this entire search result.

The mechanic runs the other way, and it lives in the first proviso to section 2(y) of the Code on Wages, 2019. Here is the plain-English version:

If the payments falling under clauses (a) to (i) — the excluded components such as HRA, conveyance, bonus and the like — exceed one-half of all remuneration (or such other percentage as may be notified), the excess is deemed to be remuneration and is added back into wages.

Or, the way you would say it to a factory owner: if more than half your CTC sits in allowances, the excess gets counted as wages anyway — and PF and gratuity are computed on the bigger number.

Nobody is forcing you to redraw your salary structure. The law simply refuses to be fooled by the structure you chose. There is no penalty for having 35% basic; there is a recomputation.

Why "50% of CTC" gives the wrong answer

Because clauses (j) gratuity and (k) retrenchment compensation sit outside that test. They are not part of the bucket being measured against one-half. Any employer whose CTC sheet carries a material gratuity provision — which is most of them — will get a different number from the shorthand than from the statute. That is not a rounding difference; it is the whole reason the shorthand is dangerous.

A worked illustration

Take a worker on ₹40,000 total remuneration a month, structured with ₹14,000 basic (35%) and ₹26,000 across HRA, conveyance and special allowance.

• Excluded components: ₹26,000
• One-half of all remuneration: ₹20,000
• Excess over one-half: ₹6,000
• That ₹6,000 is deemed remuneration and added to wages → wages become ₹20,000, not ₹14,000

PF, gratuity and leave encashment are then computed on ₹20,000. Nothing about the payslip's labels changed. The statutory base did.

What counts, and what doesn't

Component	In the section 2(y) computation?
Overtime allowance	Inside the 50% test
Employer PF and pension contribution	Counts in the computation
Statutory bonus	Counts in the computation
Remuneration in kind	Counts, but only up to 15%
Annual performance incentive	Not wages
Gratuity	Excluded from the computation
ESI	Excluded from the computation

(Source: Ministry of Labour & Employment, Additional FAQs as on 16.03.2026.)

Will take-home pay actually fall?

For some employees, yes — a larger statutory base means a larger employee PF deduction, so net credit can dip even while total cost and retirement corpus rise. This is not theoretical. Indian private banks and insurers reported higher operating expenses in Q3 FY26 for exactly this reason (Business Standard, January 2026). If large, well-advised institutions felt it in their P&L, a 42-worker unit running payroll in Excel will feel it too — it will simply feel it later, as arrears.

Is an appointment letter mandatory under the new labour code 2026?

Yes — and this is statutory, not something an HR vendor invented to sell you a template.

OSH Code, 2020, section 6(1)(f) provides that every employer shall issue a letter of appointment in the prescribed form, and where no such letter was issued before commencement, within three months of commencement. It is operationalised by Rule 6 and Form 6 of the OSH (Central) Rules, 2026.

Form 6 prescribes what the letter must contain:

• Type of employment (permanent, fixed-term, contract, apprentice)
• UAN and/or ESIC number
• The establishment's Labour Identification Number (LIN)
• Skill category
• Broad nature of duties
• Maternity benefits, for women employees

Note carefully: there is no wage threshold. Inside a covered establishment, every employee gets a letter — permanent, fixed-term and contract staff, and managerial and supervisory staff too, not only "workers".

But is it mandatory if I only have 5 or 6 employees?

Here is the correction that matters, and it is the second most repeated error in this search result. Many pages assert "there is no minimum establishment size". That is only half true.

There is no wage threshold. But there is a headcount threshold, because the duty lives in the OSH Code, and OSH Code section 1(4) covers establishments with ten or more workers (plus mines, docks and ports at any size, and hazardous occupations extendable down to a single employee). A five-person kirana shop is not pulled into the OSH Code by section 6(1)(f).

However — and skip this at your peril — many state Shops & Establishments Acts independently require appointment particulars for smaller establishments. So a sub-10 shop can still owe a letter. Under state law, not the OSH Code. Different statute, same practical outcome, and a different form.

Why this rule exists

PLFS 2023-24 (MoSPI) found that 58% of India's regular wage/salaried employees have no written job contract; 47% get no paid leave and 53% no social security. That is an improvement from 71.1% without a written contract in PLFS 2017-18 — but it is still the majority, and that majority is overwhelmingly employed by small firms.

That is precisely the population section 6(1)(f) targets. If a third of your shop floor joined on a verbal understanding, you are not an outlier; you are the reason the clause was written.

Practically, the fix is to make issuing the letter part of joining rather than a separate compliance project. Cybiqon builds this into the joining flow itself, the same way we approach onboarding new staff with AI-assisted document generation — the letter is generated from the same record that creates the attendance profile, so a new joiner cannot exist in your system without one.

Which statutory registers must I maintain, and can they be electronic?

Under the Code on Wages (Central) Rules, 2026, four documents carry the load:

Form	What it is	When
Form I	Employee register	Maintained continuously
Form IV	Register of wages, overtime, advances, fines and deductions	Each wage period
Form IX	Attendance-cum-muster roll	Daily
Form V	Wage slip	Issued on or before payment of wages

Two facts that resolve most of the confusion:

• Electronic OR physical is permitted. You do not need a paper register at the gate. A digital record satisfies the requirement provided it carries the prescribed particulars.
• Five-year retention applies.

The precision caveat: these are the Central forms. A state-sphere establishment follows its state's prescribed forms once notified — and as we established above, most states haven't finished. So build for the data, not the layout. The fields are stable; the form numbers are not.

That paper gate register in Ludhiana is the actual failure point. It cannot produce Form IX on demand, it cannot reconcile to Form IV, and it cannot generate Form V before payment because the numbers only exist after somebody re-keys them into Excel on the 3rd. The register is not "almost compliant" — it is structurally incapable of the output.

If your workforce isn't standing at one gate — technicians, delivery staff, site supervisors — attendance capture has to travel with them, which is exactly the problem a field force management app solves: geo-stamped check-in that lands in the same register a factory turnstile would.

Form IV also swallows advances, fines and deductions, which is where a lot of MSMEs improvise with a diary. Folding staff advances and reimbursements into the wage register itself, rather than keeping them in a separate book, saves you reconciling two sets of numbers at audit time.

And since you are now legally holding five years of identified employee records — UAN, ESIC number, wages, deductions — treat the security of that store as a first-class design question, not an afterthought. India's data protection obligations for MSMEs are arriving on their own timeline, and a payroll database is exactly the kind of asset that will be in scope when they do.

When must salary and full-and-final settlement be paid?

Code on Wages, section 17 sets two deadlines. The second one is, for most MSMEs, the hardest clause in the entire reform.

• Monthly wages: before the expiry of the 7th day of the succeeding month.
• On removal, dismissal, retrenchment, resignation or closure: wages within TWO WORKING DAYS.

Read that again. Two working days. The industry-standard 30–45 day full-and-final settlement is now non-compliant.

Why this breaks spreadsheet payroll

Think about how a two-working-day F&F actually has to work. An employee resigns on Tuesday and is relieved on Thursday. By Monday, you must have:

• Attendance reconciled to the last worked day, including any overtime at not less than twice the ordinary rate for hours beyond 8 per day or 48 per week
• Leave balance encashed on the correct wage base — the recomputed one, per section 2(y)
• Advances and deductions from Form IV netted off
• Statutory contributions computed
• Form V wage slip issued on or before payment

If your attendance data physically lives on paper at the gate and only becomes numbers when someone types it up after month-end, you cannot do this. Not "you will struggle" — the input doesn't exist yet on the day the deadline falls.

This is the clearest case in the whole guide for continuous, structured attendance capture. Not because software is virtuous, but because the deadline is shorter than your current data latency. Fixing the salary-credit date (the 8th to the 12th becomes the 7th at the latest) is a discipline change. Fixing the F&F is a systems change.

What is the penalty for not maintaining records — and what happens first

Let us be straight about this, because the fear-selling on this topic is relentless and the fair version is more useful.

Code on Wages, section 54:

Contravention	Maximum penalty
Paying less than the amount due	Up to ₹50,000
Repeat within five years	Up to ₹1,00,000 and/or 3 months' imprisonment
Other contraventions	Up to ₹20,000
Non-maintenance or improper maintenance of records	Up to ₹10,000

OSH Code, section 96 covers non-maintenance of registers and non-filing of returns; that Code's general contravention band runs ₹2,00,000–₹3,00,000, plus up to ₹2,000 per day of continuing contravention.

The part competitors leave out

Before prosecution, the Inspector-cum-Facilitator must first issue a written direction with a time period to comply (section 54). And first offences are compoundable under section 56 — at 50% of the maximum for fine-only offences, and 75% for fine-or-imprisonment offences.

In other words, the system is designed to give you a chance to fix it before it punishes you. The "Inspector-cum-Facilitator" title is not decoration; the facilitation step is statutory.

So no, an inspector is not going to walk in tomorrow and levy ₹3 lakh on a Ludhiana workshop for a paper register. What will happen is quieter and more expensive: liability accruing silently in the gap between the salary structure you have and the one section 2(y) implies, compounding every month, surfacing when somebody resigns and disputes their gratuity.

Is single registration and a single return available to my small factory yet?

Partly. Be careful with this one.

PIB PRID 2199330 (5 December 2025) sets out the promise: electronic single registration, a single return, a single all-India licence valid five years, and deemed approvals. In the central sphere, this is real.

For a state-sphere MSME, it is currently aspirational. Reporting by Policy Circle on Shram Suvidha integration found the picture uneven: Karnataka with around 15 integrated labour approvals; Gujarat and Kerala 2 each; West Bengal and Meghalaya none. Meghalaya is one of the four states with complete rules — and it had zero integrated approvals. Notifying rules and building the plumbing are different projects.

So plan on this timeline: the obligations arrive first, the portal arrives later. Do not defer compliance waiting for a single-window that has not reached your state's counter.

For context on the burden this reform is trying to replace: TeamLease RegTech (2025) measured a single-state manufacturing MSME's pre-Codes load at 1,450+ obligations, 48 registers, 59 inspecting authorities and ₹13–17 lakh a year, with 486 imprisonment clauses; roughly 44% of all compliances are labour law and 32% carry imprisonment risk. Consolidation is genuinely worth having. It is just not finished.

Have the EPF and ESI thresholds or the ESI ceiling changed?

Here is a cheap, checkable differentiator, and we will say it plainly: the ESI wage ceiling of ₹21,000 is not 2026 news. It has stood since 1 January 2017.

Several currently-ranking pages present it as "raised to ₹21,000 from ₹15,000" as though it were part of this reform. It is a nine-year-old change being resold as news. If a guide gets that wrong, ask what else in it was copied rather than checked.

What is genuinely new:

• ESI applicability is now nationwide, rather than limited to notified areas
• Voluntary opt-in below 10 employees is available
• Coverage extends to a single employee in hazardous occupations
• EPF coverage no longer depends on being in a scheduled industry — it is now purely headcount at 20 or more employees

That last one deserves a note. Removing the scheduled-industry test removes a long-standing source of litigation, which is good. It also removes a place to hide. If you have 20 employees, you are covered — there is no longer an industry classification argument to have.

Thresholds, cleanly: EPF at 20+ employees. ESI at 10+.

Do fixed-term employees get gratuity, and after how long?

After one year, on a pro rata basis. Not from day one.

This comes from the proviso to section 53 of the Code on Social Security, 2020, confirmed in the Ministry's Additional FAQs as on 16.03.2026. Multiple guides state "gratuity from day one for fixed-term employees", which is wrong and would materially over-state your provisioning.

The genuinely significant part is that fixed-term employees get gratuity without the five-year qualifying period that applies otherwise, and that fixed-term staff are entitled to the same wages, hours and benefits as a permanent employee doing the same work. For a seasonal manufacturer running fixed-term contracts, that is a real change to the cost model — but it starts at twelve months, not at joining.

Should you buy payroll SaaS or build a system you own?

This is the decision most readers are actually here to make, and it deserves a fair answer rather than a pitch.

Per-employee SaaS — greytHR, Keka, SalaryBox, Zoho and others — is quick to start and genuinely good software. If you need attendance and payroll running next week, buying is the right call and we will tell you so. Two structural catches are worth understanding before you commit:

• Cost scales with headcount, permanently. You pay per employee, per month, forever. The fee grows exactly as your business does. (Vendor pricing changes often — compare current plans directly rather than trusting any blog's numbers, including ours.)
• Your employee records live inside someone else's subscription. Stop paying and access gets complicated, right when you are legally required to retain five years of history.

A third catch is specific to this moment: a national SaaS product has a commercial reason to ship one compliance configuration. But what binds you depends on your headcount, your state and your sphere — and most states haven't notified their forms. A national default is, by construction, a guess about your jurisdiction.

	Per-employee SaaS	System you own
Time to live	Days	Weeks
Cost shape	Recurring, scales with every hire	One-time build, then yours
Data custody	Vendor's subscription	Your database
Form changes when your state notifies	Whenever the vendor ships it	When you decide
Odd shift patterns, piece-rate overtime	Depends on the plan	Built to your reality
Best for	Small or fast-changing teams, immediate need	Stable, growing teams on a 2–3 year view

The honest rule of thumb: if your headcount is small or volatile and you need something on Monday, buy. If you are stable and growing past 25–30 people, ownership tends to win on a two-to-three year view — and it wins harder in a year when the rules are moving monthly, because you control the release schedule.

What we would push back on, whichever you choose, is running attendance in one place, payroll in a second, appointment letters in a third and registers in a fourth. That is four disconnected artefacts of one payroll event, and it guarantees they will disagree on the day you need to produce Form IX and Form IV together. The argument for one owned system that all your operations run through is not aesthetic — it is that a two-working-day full-and-final can only be computed from a single source of truth.

A Labour Code compliance checklist for MSME India

Work through these in order. Most of it is a weekend's thinking, not a quarter's project.

1. Count your workers. Under 10, 10+, 20+, 50+ — this determines which Codes touch you at all.
2. Check your state's status on your own state labour department portal, not a summary article. Note whether the rules are draft or final, and the comment deadline.
3. Confirm your sphere. Almost certainly state, unless you are in a PSU, railways, mines, ports, banking or insurance.
4. Run the section 2(y) test on your actual salary structure. Excluded components versus one-half of all remuneration — and remember gratuity and retrenchment compensation sit outside the test.
5. Reprice the consequences: PF, gratuity and leave encashment on the recomputed base. Budget it before it becomes arrears.
6. Issue appointment letters to every employee if you are at 10+ workers — Form 6 particulars, including UAN/ESIC and LIN. If you are under 10, check your state Shops & Establishments Act.
7. Move the salary credit date to on or before the 7th.
8. Rebuild your full-and-final process for two working days. This is the one that needs a system.
9. Set up the registers — Form I, Form IV, Form IX, Form V — electronic is fine, five-year retention, structured so the layout can change when your state notifies.
10. Diarise the moving parts: EPF Schemes 2026 took effect 1 July 2026; draft ESI (General) Regulations opened 10 August 2026; your state's final rules are pending.

FAQs

Are the labour codes actually in force, and from what date?

Yes. S.O. 5322(E) in the Gazette of India brought the Codes into force on 21 November 2025 (PIB PRID 2192463). It did not switch on every section of every Code — for the Code on Wages it commenced sections 1–41, sub-sections (4)–(9) of section 42, sections 43–66, parts of 67 and sections 68–69. The Central Rules followed on 8 May 2026, including G.S.R. 342(E). The date "1 April 2026" that circulates widely as a full-enforcement deadline was never set by any S.O. or G.S.R.

Is an appointment letter mandatory if I have only 5 or 6 employees?

Not under the OSH Code. OSH Code section 1(4) covers establishments with ten or more workers, so the section 6(1)(f) duty does not reach a five-person shop. But many state Shops & Establishments Acts independently require appointment particulars for smaller establishments, so you may still owe a letter under state law. Check your state's Act — the answer genuinely differs by state.

Does the code really require basic pay to be 50% of CTC?

No — that is the rule stated backwards. Under the first proviso to section 2(y), Code on Wages, if payments under clauses (a)–(i) exceed one-half of all remuneration, the excess is deemed remuneration and added back into wages. Plainly: if more than half your CTC sits in allowances, the excess gets counted as wages anyway, and PF and gratuity are computed on the bigger number. Clauses (j) gratuity and (k) retrenchment compensation sit outside the test, which is exactly why the "50% of CTC" shorthand gives the wrong answer for any structure with a material gratuity provision.

Will my employees' take-home pay fall?

For some, yes. A larger statutory wage base means a larger employee PF deduction, so net credit can dip even as total cost and retirement savings rise. Indian private banks and insurers reported higher operating expenses in Q3 FY26 for precisely this reason (Business Standard, January 2026).

My state hasn't notified its rules — what do I follow meanwhile?

The old rules continue to apply under section 6 of the General Clauses Act, 1897 — this is the Ministry of Labour & Employment's own stated position in its FAQs. The statutory obligations under the Codes still bind you; it is the prescribed local paperwork format that may not exist yet. As of 11 July 2026, only Arunachal Pradesh, Gujarat, Bihar and Meghalaya had final rules under all four Codes (The Tribune).

Which registers must I maintain, and can they be electronic?

Under the Code on Wages (Central) Rules 2026: Form I (employee register), Form IV (wages, overtime, advances, fines and deductions), Form IX (attendance-cum-muster roll) and Form V (wage slip, issued on or before payment). Electronic or physical is permitted, with five-year retention. These are the Central forms — a state-sphere establishment follows its state's prescribed forms once notified.

What is the penalty for not maintaining records?

Up to ₹10,000 under Code on Wages section 54 for non-maintenance or improper maintenance of records; up to ₹20,000 for other contraventions; up to ₹50,000 for paying less than due, rising to ₹1,00,000 and/or three months' imprisonment on a repeat within five years. Under OSH Code section 96 the general contravention band is ₹2,00,000–₹3,00,000 plus up to ₹2,000 per day of continuing contravention. Note that the Inspector-cum-Facilitator must first issue a written direction with time to comply, and first offences are compoundable under section 56 at 50% or 75% of the maximum.

Have the EPF or ESI thresholds changed, and was the ESI ceiling raised in 2026?

Thresholds are EPF at 20+ employees and ESI at 10+. The ESI wage ceiling of ₹21,000 has stood since 1 January 2017 — it is not a 2026 change, despite several ranking pages presenting it as one. What is new: ESI applicability is now nationwide rather than notified-area, voluntary opt-in below 10 employees is available, coverage extends to a single employee in hazardous occupations, and EPF coverage no longer depends on being in a scheduled industry.

When must salary and full-and-final settlement be paid?

Under Code on Wages section 17: monthly wages before the expiry of the 7th day of the succeeding month, and on removal, dismissal, retrenchment, resignation or closure, wages within two working days. The common 30–45 day full-and-final timeline is non-compliant.

Does a fixed-term worker get gratuity, and after how long?

Yes, after one year, on a pro rata basis — under the proviso to section 53 of the Code on Social Security, 2020, confirmed in the Ministry's Additional FAQs as on 16.03.2026. The widely-repeated claim of "gratuity from day one" is incorrect. The real change is that the usual five-year qualifying period does not apply to fixed-term employees.

Is single registration available to my small factory yet?

In the central sphere, yes — PIB PRID 2199330 describes electronic single registration, a single return, an all-India licence valid five years and deemed approvals. For a state-sphere MSME it is still arriving. Reporting on Shram Suvidha integration found Karnataka with around 15 integrated labour approvals, Gujarat and Kerala 2 each, and West Bengal and Meghalaya none. Plan for the obligations to land before the portal does.

Build the attendance and payroll system your establishment actually needs

Cybiqon AI Solutions builds Indian MSMEs one owned system — attendance, payroll, appointment letters and the statutory registers in a single database that outputs the prescribed forms electronically and keeps five years of history. Sized to what actually binds your establishment, in your state, at your headcount. No per-employee-per-month rent, no jargon, and no pretending a Ludhiana auto-components unit and a Kochi PSU contractor have the same compliance surface.

We are a small Indian LLP that builds web, app and AI automation for MSMEs, and we would rather tell you to buy an off-the-shelf tool than sell you a build you do not need. If you want a straight conversation about which of those two is right for you, visit cybiqon.in, call +91 9250711473, or email [email protected]. Bring your headcount and your state — that is all we need to give you a useful answer.

Conclusion

The Codes commenced on 21 November 2025, the Central Rules landed on 8 May 2026, and the EPF Schemes were replaced on 1 July 2026 — but for most MSMEs the binding question is still headcount, state and sphere, and only four states had finished their rules by 11 July 2026. Get the section 2(y) test right, issue the appointment letters, move the salary date to the 7th, and rebuild full-and-final for two working days. The right attendance and payroll software India MSMEs need is simply the one that can produce your state's forms on demand — whether you buy it or build it.