Running Payroll Across States: Registrations, Professional Tax and Minimum Wages
The Labour Codes are central law. Most of what makes them operable is state law, and the states are not moving at the same speed. Add professional tax, which was never centralised and was not touched by the Codes, and a single national payroll process still breaks at the state line in 2026, arguably more than it did in 2024.
- Where state rules under the Codes have and have not been notified
- Professional tax by state, with the traps
- Minimum wage computation under the 2026 central rules
- What a multi-state employer should actually standardise
Codes in force, rules not everywhere
All four Codes commenced on 21 November 2025 across India. Rules under them are made partly by the Central Government and partly by each state, and it is the rules that carry the operational detail: registers, returns, forms, timelines, inspection procedure and much of the computation.
State rule-making is uneven and still moving. A number of states and union territories have notified final rules under one or more Codes, many still have draft rules only, and comparatively few have completed final rule-making across all four. We do not publish a national count here, because the count goes out of date faster than the page can be revised and it is not the number that decides anything for a particular employer. The position has to be checked Code by Code and jurisdiction by jurisdiction.
Where a state has not notified, the working position for an employer is central rules read with whatever legacy state law survives by saving under each Code's repeal section. That is a defensible position but it is not a comfortable one, and it is specific to the establishment rather than to the company. We have deliberately not published a state-by-state table of rule status. A state can notify at any time, so a static table would be wrong about somebody between one review and the next, and a table that is wrong about one state is worse than no table at all. What we will do instead is put together a current, source-linked jurisdictional matrix as part of a compliance review, covering the states you actually employ in.
A state levy the Codes did not touch
Professional tax is levied by states under Article 276 of the Constitution and is capped at ₹2,500 per person per year. It has nothing to do with the Labour Codes and was not changed by them. What makes it hard is not the amount but the variety: slab counts, the basis of the slab, whether the period is monthly or half-yearly, gender treatment, and due dates all differ.
| State | Position for FY 2026-27 |
|---|---|
| Maharashtra | Men: nil up to ₹7,500; ₹175 for ₹7,501 to ₹10,000; ₹200 above ₹10,000, with ₹300 in February. Women: nil up to ₹25,000, ₹200 above, ₹300 in February. The February top-up, which Karnataka has as well, and the women's threshold are the two most commonly missed items in the country. |
| Karnataka | No liability below ₹25,000 a month. At ₹25,000 and above, ₹200 a month, with ₹300 deducted in February. There is no intermediate ₹150 band, whatever some published slab tables show, and the threshold is inclusive: an employee on exactly ₹25,000 is liable. |
| West Bengal | Nil up to ₹10,000; ₹110 to ₹15,000; ₹130 to ₹25,000; ₹150 to ₹40,000; ₹200 above ₹40,000. |
| Tamil Nadu | Half-yearly rather than monthly, ranging from ₹135 to ₹1,250. |
| Delhi, Uttar Pradesh, Rajasthan, Haryana, Punjab, Uttarakhand and several others | No professional tax. Punjab levies a separate charge, the Punjab State Development Tax, under the Punjab State Development Tax Act 2018: ₹200 a month, or ₹2,400 for a full year, for persons within the income-tax-linked liability test, with a lump sum option of ₹2,200 for the year subject to conditions. |
Filing frequency is its own trap. In Maharashtra the registration certificate return is monthly where the prior year's liability reached ₹1 lakh and annual otherwise, under rule 11(3) of the state's profession tax rules. The threshold is inclusive: a liability of exactly ₹1 lakh in FY 2025-26 puts you on monthly filing for FY 2026-27. For FY 2026-27 the annual registration certificate return is due by 15 March 2027, and enrolment certificate tax on an existing enrolment was due by 15 June 2026. The amendment of 28 February 2026 moved filing dates, not this threshold.
Two first-year rules sit underneath all of that, and they are the part most often missed. A newly registered employer files monthly until the end of the year in which the registration certificate is granted, whatever the threshold would otherwise say, under rule 11A. And a first year of enrolment has its own timing, so a newly enrolled employer should not read the dates above across. The two certificates are different things and the first-year rules are different rules.
Computation under the 2026 central rules
Under rule 3(2) of the Code on Wages (Central) Rules 2026, a fixed daily minimum wage rate is divided by eight to give the hourly rate and multiplied by twenty-six to give the monthly rate. A fraction of one half or more is rounded up and a smaller fraction is disregarded. Twenty-six is the number that decides monthly minimum wage compliance, so it is worth checking what your payroll system actually uses.
The Code on Wages extends minimum wage protection to all employees rather than to scheduled employments only, which is a genuine widening. Rates themselves remain a state function, notified by each appropriate government by skill category and geographical zone, and minimum wage notifications issued before November 2025 continue by saving until superseded.
Section 9 of the Code on Wages empowers the Central Government to fix a floor wage, and rule 4 of the 2026 central rules sets out the basis on which it is to be determined, but no floor wage amount has been notified, as at 7 September 2026. The old national floor level minimum wage is not it. That was an advisory benchmark with no statutory force, and quoting it as the Code's floor wage is a common and material error.
What to standardise nationally and what to keep local
Standardise the wage structure
The definition of wages is central and identical across the four Codes. Build one compliant salary structure that satisfies the fifty per cent rule and use it everywhere. There is no state variation to accommodate here and every reason to avoid inventing one.
Standardise the tax side
Salary withholding, the regime election, the deposit date and the quarterly statements are central. One process, one calendar, no state variation.
Keep registrations, professional tax and registers local
These are state functions and they will stay state functions. The right design is a single national process with a state-specific layer, not a set of parallel payrolls, and certainly not a national process that quietly applies one state's rules everywhere.
Keep a state watch list
For each state where you have an establishment, track whether final rules are notified. The moment a state moves from draft to final, its registers, returns and timelines change, usually with a short lead time.
Where to go next
Payroll Services
Back to the main payroll page: who we work with, how an engagement is put together, and how to reach us.
What the Labour Codes Did to Your Payroll
The commencement notifications read properly, the new statutory definition of wages and the fifty per cent rule, which Acts were actually repealed, and why the provident fund repeal is dated earlier than the rest.
Provident Fund, ESI and Gratuity: Rates, Ceilings and the Transition
Contribution rates and wage ceilings, the provident fund ceiling's rise to ₹25,000 on 17 September 2026, what changed for gratuity on fixed-term contracts, and how the new wage base feeds each of the three.
Salary TDS Under the Income-tax Act 2025
Two Acts running at once, the new section numbers, the slab and rebate position for FY 2025-26 and tax year 2026-27, the renumbered forms, and the quarterly calendar a payroll team has to work to.
Cross-border Payroll: International Workers and Social Security Agreements
Provident fund for international workers and the litigation hanging over it, the twenty operational social security agreements, certificates of coverage, and the India and United Kingdom agreement, in force since 15 July 2026.
Send an enquiry
Tell us which states you have people in. That single list determines most of the answer, and it is usually a short conversation from there.
This page is general information, not professional advice. Indian payroll law changed more between November 2025 and June 2026 than in the twenty years before it. The four Labour Codes commenced on 21 November 2025, central rules under them followed in May 2026, and the Income-tax Act 2025 replaced the 1961 Act on 1 April 2026. State rules under the Codes are still being notified and differ by state, so the correct answer for one employer is not automatically the correct answer for another. Take professional advice before acting on anything on this page. We are happy to be that adviser, but we do not act on a web page, ours or anyone else's, without one.