Hiring your first employee shifts a business from solo operation into full employer compliance territory — a checklist to make sure nothing gets missed.
1. Confirm Your Business Structure Supports Employment
Make sure your company registration and PAN are active and correctly reflect an operating business, not a dormant shell — necessary before payroll obligations can be properly established.
2. Draft a Proper Employment Contract
Specify role, compensation, working hours, leave entitlements, and termination terms in writing, aligned with Labour Act, 2074 minimums.
3. Register for SSF (Where Applicable)
Determine whether your business falls under mandatory SSF enrollment and register accordingly — this needs to happen before your first payroll run, not retroactively.
4. Set Up TDS Withholding
Calculate and withhold TDS on salary from the very first paycheck — this is a monthly filing obligation from day one, regardless of how small the initial payroll is.
5. Maintain Proper Payroll Records
Payslips, attendance records, and leave tracking should be documented from the start — reconstructing this later for a labor dispute or audit is far harder than maintaining it as you go.
6. Understand Termination Requirements Before You Need Them
Know the notice and severance rules under the Labour Act before any termination scenario arises — this is not the moment to be learning the rules for the first time.
Hiring your first team member? Company Sathi can set up compliant contracts and payroll from day one.
