India has 63 million small businesses. They employ hundreds of millions of people. And almost none of them have payroll that actually works.
Not because they don't care. Because the system is stacked against them.
A business with 20 employees in India has to deal with PF deductions, ESI contributions, Professional Tax (which changes by state — all 28 of them), TDS slabs, gratuity calculations, salary advance adjustments, and then file ECR reports, challans, and returns — every single month. The rules change without notice. The portals go down on deadlines. And if you get it wrong, the penalties are real.
Most small businesses handle this with a spreadsheet and a prayer. The ones who can afford it outsource to a CA or a payroll bureau. The ones who can't just wing it and hope the compliance inspector doesn't show up.
Why this problem exists
Payroll software exists in India. Kredily, Keka, Zoho Payroll, GreytHR — there are at least a dozen products. But they're all built for companies that have an HR department. They assume you have someone whose job is to learn the software, configure it, and maintain it.
A business with 15 employees doesn't have an HR department. The founder does payroll. Or the admin does it. Or the accountant handles it as one of seventeen things they're already doing.
These people don't want software. They want payroll to be done.
What we're building
cohort26 is building the payroll layer for Indian SMBs — starting with a free tool that does the hard part automatically.
Upload your employee list. Get back the full payroll run: gross pay, PF, ESI, Professional Tax (all 28 states), TDS, net pay. Download the ECR file for PF filing. Everything calculated in your browser — no login, no data stored, no monthly subscription.
That's the wedge. The reason we built it free is not because we're a charity. It's because trust is the product in payroll. Nobody switches payroll systems because of features. They switch because someone they trust told them to. We're building trust first.
The goal is to become the tool that the person who does payroll at every 10–200 employee company in India already has open on their browser.
Once they trust the tool, we layer in the things they'll pay for: compliance alerts when rules change, direct filing, automated payslips, leave and attendance tracking. But we earn that business by being useful first.
Why we're the right people to build this
We don't come from payroll. We're not ex-HRMS founders who decided to start over. We're building this because we've seen the problem from the inside — at companies where payroll was a mess, where compliance was a monthly panic, where the person responsible had no tools that actually fit their situation.
We also know how to build fast and in public. We shipped a working payroll engine in a week. We pivoted our go-to-market strategy when customer discovery told us we were wrong. We're not trying to build the perfect product — we're trying to find the thing that actually gets used.
Why now
Three things are true right now that weren't true five years ago.
The compliance burden just got heavier. DPDP, new PF rules, the shift to TRACES for TDS — there are more things to get right, and more consequences for getting them wrong. SMBs need help more than ever.
AI makes per-employee economics work differently. A payroll bureau that charges ₹500/employee/month needs humans to process the work. We don't. We can serve a 10-person company at the same marginal cost as a 500-person company. That changes who we can profitably serve.
Trust in "free tools" has shifted. A few years ago, Indian SMB owners were skeptical of anything they didn't pay for. That's changed. They use free GST tools, free invoice generators, free bank reconciliation. They're ready for a free payroll tool — if it works.
The long game
Payroll is not the end goal. Payroll is the data layer.
Every month, payroll generates a verified record of who worked where, for how long, and for how much. That's the most trusted employment data in existence. It's more reliable than a resume, more current than a LinkedIn profile, and more detailed than any background check.
In a country where 90% of workers are in the informal economy and have no verifiable employment history, that data is enormously valuable — for lending, for insurance, for hiring.
We're starting with a free payroll tool because it's the right wedge for an SMB. But we're building toward something bigger: becoming the verified employment layer for Indian workers.
We're building this in public. Every decision, every wrong turn, every commit. If you're an SMB owner, an HR manager, or an accountant who does payroll — we'd genuinely love to talk. Email us at founders@cohort26.com.