HRMS and Payroll Software in India: Buy or Build for a 20 to 200 Person Company
Most Indian companies with 20 to 200 people should buy an HRMS and payroll product, because statutory payroll rules change and a vendor keeps up with them. Build only the parts no product fits, such as site attendance, rotating shifts or incentive formulas, and connect them to the product you buy.
Get the Statutory Side of Payroll Right
Payroll here is not just salary minus leave. It covers PF, ESI, professional tax in the states that levy it, and TDS on salary, along with the returns and challans that go with them.
These rules change, and a mistake shows up as a notice or a penalty. The four labour codes, in force since 21 November 2025, are the latest example, so ask your CA how they affect your salary structure. A vendor that updates statutory rules for many customers carries that load for you.
For most companies of this size, that is reason enough to buy payroll rather than build it.
The HR Features a 20 to 200 Person Company Needs
Performance reviews, training and hiring are useful, but many companies this size run them in simpler tools for years.
- Employee records with documents, bank details and reporting managers
- Attendance from biometric devices, a mobile app, or both
- Leave rules that match your policy, with approvals on the phone
- Payroll with statutory deductions and payslips
- A self-service view for payslips, leave balances and tax declarations
When Buying an HRMS Works
Office teams with fixed shifts, standard leave and ordinary salary structures fit most products with little setup. You pay a subscription and get updates without asking.
Test the attendance side before you sign. Ask the vendor to show your own biometric device model working and your exact leave policy set up, in a trial.
Check exports as well. You should be able to take your employee and payroll data out in a usable form if you ever leave.
Where a Custom HR Module Makes Sense
Companies with field staff, construction sites, rotating shifts, or piece-rate and incentive pay often find that products bend badly. The workaround becomes an Excel sheet that feeds payroll every month.
In these cases, build only the unusual part, such as geo-tagged site attendance or an incentive calculator. Feed its output into a payroll product rather than rebuilding statutory payroll.
A fully custom HRMS with payroll is rarely worth it at this size. It makes sense only when HR is tied closely to a larger custom system you already run.
Connect HR to Billing, Accounts and Access
Attendance often decides billing, as in a staffing or facility management company that charges clients by the shift. Salary costs also have to reach Tally for the books.
Plan these links early: attendance to client invoices, the payroll journal to Tally, and new joiners to email and system access. The links are often where the real time saving sits.
GullySystem implements HRMS products and builds the custom pieces around them. The free technology audit reviews your current attendance and payroll process and tells you which parts to buy and which, if any, to build.
HRMS buy-or-build scorecard
A scorecard listing each HR need, from records and attendance to payroll, incentives and integrations. Columns record how well a shortlisted product fits, the workaround you would need, and whether that part is worth building.
Frequently asked questions
Is it cheaper to build our own payroll software?
Rarely, once upkeep is counted. Rules for PF, ESI, professional tax and TDS change, and someone has to update and test the software each time. Buy payroll and build only what no product handles.
Will an HRMS work with our biometric attendance machine?
Usually, but confirm it with your exact device model before you sign. Some devices push data to the cloud, while others need a small connector on an office PC. Ask for a trial with your own device.
Can the HRMS send salary entries to Tally?
Many products export a payroll journal that Tally can import, and some connect directly. If yours does not, a small integration can post the monthly salary journal into Tally. Agree the ledger mapping with your accountant first.
Sources
- PIB, Ministry of Labour and Employment: Four Labour Codes made effective from 21 November 2025 — verified 20 Sept 2026
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