Question 1

What does payroll compliance include?

Accepted Answer

Statutory compliance in payroll includes things like income tax deduction and insurance allocation in payroll, along with the deduction of professional tax and the award of gratuity to eligible employees. It also involves ensuring that everyone is paid a fair wage, irrespective of gender.

Question 2

How to do a payroll compliance audit?

Accepted Answer

To do a payroll compliance audit, you need to have a payroll compliance consultant and trusted members from your payroll team to share the data with them. A payroll compliance audit can take a few days as a detailed analysis of the company’s payroll will be done. It must follow an established process and there must be well-established KPIs too.

Question 3

Who does a payroll compliance audit?

Accepted Answer

A payroll compliance audit is done by a payroll compliance professional, and the data is shared by members of the payroll team. This is then shared with the government. A payroll compliance audit could be conducted by the government too to ensure that everything is in order.

Question 4

Are payroll compliance laws the same everywhere?

Accepted Answer

Payroll compliance laws are different in different parts of the world, with each country having its tax laws and even terms for gratuity or maternity leaves. This is why a payroll compliance consultant who is familiar with the nation’s laws must handle the payroll compliance process.

Question 5

How often should audits be done?

Accepted Answer

Payroll compliance audits must be conducted at least once a year, with quarterly internal reviews to ensure accuracy, legal adherence, and timely corrective actions.

Question 6

Are payroll compliance laws the same across all Indian states?

Accepted Answer

No, payroll laws vary by state, especially Professional Tax, Minimum Wages, LWF, & Shops & Establishments provisions, necessitating region-specific compliance updates.

Question 7

What happens during a compliance inspection?

Accepted Answer

Inspectors review payroll records, statutory filings, employee registers, wage practices, & documentation to verify legal compliance, identify gaps, & enforce corrective actions.

Question 8

What is the difference between payroll compliance and HR compliance?

Accepted Answer

Statutory compliance in payroll focuses on salaries, taxation, and statutory deductions, whereas HR compliance covers broader labour laws, workplace policies, employee rights, & regulatory governance.

Question 9

Can payroll compliance be automated using HR software in 2026?

Accepted Answer

Yes, modern HR software automates calculations, filings, updates, & documentation, ensuring real-time compliance accuracy and reducing manual errors & administrative workload.

Statutory Compliance in Payroll

What Is Statutory Compliance in Payroll?

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