Quick summary
A practical guide for Indian business owners on the difference between payroll services and HR consulting. What each covers, when you need both, and how to structure the engagement.
What each service covers
Payroll services handle the mechanical process of calculating and disbursing employee salaries: gross-to-net computation, TDS deduction (Form 16 issuance), PF/ESI contribution calculation and deposit, professional tax deductions, salary slip generation, and payroll reconciliation with books. This is largely a compliance and computation function.
HR consulting covers the strategic and policy dimensions of managing people: employment contracts, HR policies (leave, code of conduct, POSH compliance), performance management processes, compensation benchmarking, hiring process design, and labour law advisory. HR consulting addresses how you build and manage your workforce; payroll handles how you pay them.
- Payroll services: Salary calculation, TDS, PF/ESI, professional tax, Form 16, salary slips, payroll reports
- HR consulting: Employment contracts, HR policies, POSH compliance, compensation benchmarking, hiring process, labour law advisory
- Overlap area: Both touch on leave management, compliance with the Shops and Establishments Act, and labour law reporting
- Who provides each: Payroll is typically handled by accounting firms or specialised payroll software companies. HR consulting is provided by HR consultants, HR technology platforms, or employment law advocates.
When you need both
- Below 10 employees: Basic payroll software (Razorpay Payroll, Keka, greytHR) + standard employment contract template reviewed by a lawyer. No dedicated HR consulting needed.
- 10–50 employees: Payroll service (outsourced, ₹3,000–₹8,000/month) + HR policy documents + legal review of contracts. Part-time HR consulting engagement when hiring significantly.
- 50+ employees: Dedicated payroll system + HR consulting for policy compliance, compensation review, and POSH compliance. Consider an internal HR hire.
- Startup receiving investment: HR consulting required for ESOP scheme design, employment agreement standardisation, and HR policy documentation for due diligence readiness.
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