Best HR software for startups in India, staged by headcount
The best HR software for a startup in India is whatever covers the obligations you have already crossed, and nothing beyond that. Those obligations arrive at specific headcounts: appointment letters from your first hire, a POSH committee at 10, EPF registration at 20. This guide maps the thresholds, then the tool that fits each stage.
Last updated 24 August 2026.
Buy for the headcount you have, not the one on the pitch deck
Most HR software advice for Indian startups is written backwards. It starts with a feature list, works through fourteen vendors and leaves you comparing modules you have no use for. The founder reading it does not have a features problem. They have a Monday problem: someone accepted an offer, the letter has to go out, and nobody is certain what it needs to say.
Indian statutory obligation does not scale gently. It steps. Cross a threshold and a new requirement lands whole, with a registration, a filing rhythm and a penalty attached. Software that matches your current step is cheap and useful. Software bought for a step you have not reached is an expensive way to store spreadsheets.
So the sensible order is: know your thresholds, then buy the smallest thing that clears them properly. Below is that map, with the software decision attached to each stage rather than floated above all of them.
What lands at each headcount?
The thresholds below are the ones that catch growing Indian companies most often. State rules vary on a few, so confirm against your own state where the table says so.
| Headcount | What becomes obligatory | What that means in paperwork |
|---|---|---|
| First hire | Written appointment letter, compulsory under the Labour Codes effective 21 November 2025. Payslips. | A properly drafted letter with compensation detail, and a payslip every month that reconciles to what you paid |
| 10 employees | POSH Internal Committee. Payment of Gratuity Act. ESI in most states, 20 in some. | A written POSH policy and a constituted committee, gratuity accrual tracked from basic pay, ESI at 3.25 percent employer plus 0.75 percent employee up to a ₹21,000 wage ceiling |
| 20 employees | EPF registration. Payment of Bonus Act. | UAN for every employee, EPF at 12 percent each side against the ₹15,000 wage ceiling, monthly returns filed by you or your CA |
| 50 employees | Nothing new statutorily, but this is where most HRMS vendors start selling | Several price in blocks of 50 users, so this is the first headcount at which their rate card stops punishing you |
Rates and ceilings from the Employees' Provident Fund Organisation and ESIC. Labour Code commencement per the Ministry of Labour and Employment. Gratuity is calculated as wages multiplied by 15, multiplied by years of service, divided by 26, with a statutory ceiling of ₹20 lakh. Fixed term employees become eligible after one year under the new codes. Professional tax slabs are set by each state, so check yours.
Under 10 people: buy documents, not a platform
At this size a subscription is money you do not need to spend. You hire occasionally, payroll is short, and the only genuine obligations are the appointment letter and the payslip. Both have to be right, and neither justifies a monthly fee in a quarter where nobody joins.
This is what pay per document is for. On Offrd an offer letter is 10 credits, an onboarding is 15, a payslip is 2 per employee, and a probation or increment letter is 5. Credit packs start at ₹99 for 10 and fall to about ₹8 a credit on the ₹1,999 pack. Fifty free credits arrive on signup with no card, which is one offer letter, one onboarding and a dozen payslips before you have paid anything.
What to avoid at this stage is a vendor with a monthly floor. Several charge ₹2,500 to ₹5,000 a month regardless of how many people you employ, and in a quiet quarter that is a few lakh over five years for paperwork you produce eight times a year.
10 to 19 people: the compliance step nobody warns you about
This is the sharpest transition a growing Indian company makes, and it is the one founders most often discover late. At 10 employees the POSH Act requires an Internal Committee, and a written policy is the practical starting point for constituting one. The Payment of Gratuity Act applies. ESI applies in most states, though a few notify the threshold at 20, so check yours rather than assuming.
None of that is difficult. It is simply a set of documents and registrations that did not exist last quarter, and there is no notification when you cross the line. You cross it by hiring one more person.
Software earns its keep here for the first time. A questionnaire driven policy generator produces a POSH policy built to your organisation rather than a template someone downloaded, and does the same for leave, maternity, conduct and intellectual property. Gratuity accrual has to compute from basic pay. ESI has to apply against the correct wage ceiling. Read the ESI and PF compliance guide before your first filing month, not after.
At this stage the ₹50 per active employee subscription usually beats credits, because you are now producing payslips every month for a growing group rather than a letter now and then. A 15 person team is ₹750 a month with attendance, leave, geofencing and every document type included.
20 to 50 people: EPF, and the first real vendor decision
EPF registration becomes mandatory at 20 employees. Every employee needs a UAN, contributions run at 12 percent from each side against the ₹15,000 wage ceiling under Para 26A, and returns go out monthly. Most companies at this size hand the filing to a CA, which is the sensible arrangement, and what the CA needs from you is clean data in the right format rather than a login to your HR system.
This is also where the sales calls start. Full HRMS vendors will tell you that 25 people is when you need a platform. Sometimes that is true. It is true if you run formal appraisal cycles that feed compensation decisions, or if a recruiter is working a live pipeline every week. Neither is common at 25 people in India.
What is common is one HR person sharing the role with admin or finance, hiring one to five people a quarter, and needing the paperwork and the statutory maths to be right without a configuration project. For that, a document first tool with payroll calculation and bundled attendance covers the ground at a fraction of the cost. Our page on whether a full HRMS is warranted under 200 employees works the numbers through module by module.
What to look for, whichever vendor you pick
Five questions separate tools that work in India from tools that were localised afterwards. Ask all five in the demo.
Does the statutory logic sit in the documents?
A payslip and a settlement letter that draw from different salary structures will disagree, and the employee will notice at exit. Ask whether the professional tax slab follows automatically from the work location, and whether the salary structure balances to total CTC on its own.
Which tier holds the feature you came for?
The most common quote surprise is finding attendance one tier above the price you were shown, or payroll sold as a separate product entirely. Get the tier ladder in writing and mark the row your requirement sits in.
Is there a seat block or a monthly floor?
Several Indian vendors sell in blocks of 50 users. At 20 people you pay for 30 seats nobody occupies. Per employee billing with no block is the difference between a fair rate and an expensive one.
What exactly does the vendor file for you?
Calculating a contribution and filing a return are different acts. Very few tools at SME prices file ECR to EPFO or 24Q to TRACES. If a vendor implies otherwise, ask them to write it down.
How long until the first letter goes out?
Implementation cycles of two to four weeks are normal at the HRMS end, often with a setup fee. If you need to send an offer this afternoon, that is the whole comparison and nothing else on the list matters.
What does leaving cost?
Annual billing, notice periods and implementation fees all raise the cost of being wrong. Ask what happens in month three if the tool does not fit, and prefer the answer that does not involve a lawyer.
Where Offrd fits, and where it does not
Offrd is the recommendation on this page for companies under 250 employees. It generates offer letters with confidentiality and compensation annexures, onboarding with Aadhaar, PAN and bank capture, payslips, probation confirmations, increment letters, bond and experience letters, relieving letters and a full and final settlement with 19 standard deduction heads and 13 exit specific payouts. EPF, ESI, professional tax and gratuity are computed inside each one. Attendance comes bundled through the Atndnz app with QR check in, GPS at a 500 metre radius, geofencing, biometric sync, shifts and a roster. Form 16 is assembled by generating Part B and combining it with the Part A you download from TRACES.
More than 4,000 Indian companies across 350 plus cities use it, and Offrd Inc was named Top HR and Payroll Company to Watch 2025 at the Insights Success Asia Excellence Awards.
What it does not do is a short and deliberate list: no performance reviews, no OKRs, no 360 feedback, no engagement surveys, no applicant tracking beyond pre interview resume screening, no expense claims, no help desk, no asset register, no multi level approval chains, no API access and no statutory return filing. If two or more of those are on your requirement list, buy a full HRMS and do not let anyone talk you out of it.
Questions founders ask before buying
- What is the best HR software for a startup in India?
- For most Indian companies under 250 employees the answer is a document first tool rather than a full HRMS. Offrd covers offer letters, onboarding, payslips, attendance, leave and exit paperwork at ₹99 a document or ₹50 per active employee a month, with EPF, ESI, professional tax and gratuity calculated inside every document. Larger companies running appraisal cycles and a live hiring pipeline should look at Keka or greytHR instead.
- At what headcount does EPF registration become mandatory in India?
- EPF registration is mandatory once an establishment employs 20 or more people, under the Employees' Provident Funds and Miscellaneous Provisions Act 1952. Contributions run at 12 percent from the employer and 12 percent from the employee, both applied against the 15,000 rupee wage ceiling under Para 26A. Smaller companies can register voluntarily.
- When does an Indian company need a POSH policy and an Internal Committee?
- At 10 or more employees. The Sexual Harassment of Women at Workplace Act requires an Internal Committee at that threshold, and a written policy is the practical starting point. This is one of the earliest statutory obligations a growing company hits and one of the most commonly missed.
- Are appointment letters compulsory for startups in India?
- Yes. Written appointment letters became compulsory under the Labour Codes that took effect on 21 November 2025. It applies regardless of headcount, so a five person company is covered by the same rule as a five hundred person one. Payslips were never optional either.
- How much should a 20 person startup spend on HR software?
- Around ₹1,000 a month is enough for documents, payroll calculation, attendance and leave if you buy a document first tool. Several full HRMS vendors bill in 50 user blocks starting near ₹5,000 a month, so a 20 person team pays for 30 empty seats. Read the seat structure before the per user rate.
- Do I need a full HRMS at 50 employees?
- Usually not. At 50 people the modules that justify an HRMS price, performance management, OKRs, expense claims, a help desk and an asset register, are the ones most companies never configure. What you do need is correct statutory calculation, reliable documents and attendance that works for field staff. Those are cheaper bought on their own.
- Does Offrd file EPF or income tax returns?
- No. Offrd calculates EPF, ESI, professional tax and gratuity, assembles Form 16 by generating Part B and combining it with the Part A you download from TRACES, and exports payroll in EPF return format. It does not file ECR to EPFO or 24Q to TRACES. If automated filing is your main requirement, RazorpayX Payroll or greytHR is the better fit.
- Can I test HR software without a card or a demo call?
- On Offrd, yes. Signup gives you 50 free credits with no card and no trial clock, which covers one offer letter, one onboarding and about a dozen payslips. That is a real hire end to end rather than a guided tour, and setup takes about two minutes.
Run one real hire before you decide anything
Fifty free credits on signup, no card and no trial clock. That is one offer letter, one onboarding and about a dozen payslips, which is enough to see whether the statutory maths and the paperwork hold up. Setup takes about two minutes.
Disclosure: this page is published by Offrd and recommends Offrd. Competitor prices cited were read from each vendor's own pricing page in July and August 2026 and exclude GST. Rates move, so verify before deciding. Statutory thresholds and rates summarise published rules from EPFO, ESIC and the Ministry of Labour and Employment, and several vary by state. This is general information, not legal or tax advice. Confirm your own position with your CA or legal advisor. Questions to service@offrd.co.