July 2025 Payroll Updates: Smarter, Simpler, More Compliant

July 2025 Payroll Updates: Smarter, Simpler, More Compliant

Over the past month, we've focused on making Zoho Payroll more flexible, compliant, and easier to use—whether you're processing complex payouts, ensuring accurate calculations, or meeting local tax regulations.

Here's what's new:
  • One-Time Payments and Off Cycle Payrolls: Now Support Formula-Based Earnings (India)
  • Earnings Based on % of CTC Now Include One-Time Earnings (India)
  • Authorize Zoho Payroll to File State Taxes on Your Behalf (US)
  • More SIF/Wage File Formats (UAE & KSA)
Plus, stay tuned for a sneak peek at an exciting improvement coming your way next week.

One-Time Payments and Off Cycle Payrolls: Now Support Formula-Based Earnings (India, UAE, KSA)

When processing a one-time payout or an off cycle payroll for employees, you must select a specific earning component, which determines how the payment is calculated.

You can now use formula-based earning components such as Custom Allowance or Overtime Allowance as the earning components in both One-Time Payments and Off Cycle Payrolls, provided the earning component's Pay Type is set to Variable Earning and the Calculation Type is set to Custom Formula.

Since the payout amount is determined by a formula, you're required to provide the necessary input variables used in that formula. These inputs may include days, hours, or minutes, depending on how the formula is defined.

After creating the one-time payout or off cycle payroll entry, you must manually add each employee and enter the appropriate input values, such as the number of days, hours, or minutes worked.



For example:
  • If your formula pays 200 per overtime hour, you must input the number of overtime hours worked for each employee.
  • If your formula is based on days worked for a project, you must enter the relevant number of days for each employee.

Earnings Based on % of CTC Now Include One-Time Earnings (India)

Previously, when fixed earnings such as Basic Pay, HRA, Dearness Allowance, Conveyance Allowance, etc., were set to be calculated as a percentage of CTC, the system used the Fixed CTC as the basis. This Fixed CTC was calculated as Annual CTC – One-Time Earnings.

As a result, only the recurring components of the CTC were considered.

Now, fixed earnings calculated as a percentage of CTC are based on the entire Annual CTC, which includes one-time earnings (such as bonuses or one time payments). This means the earnings derived from percentage calculations will now reflect a higher base value. This change ensures a more consistent and transparent calculation of earnings based on the full value of an employee's Annual CTC, including both recurring and one-time earnings.

Notes
Note: This feature is currently in early access. If you’d like to enable it for your organization, please contact us at support@zohopayroll.com.

Authorize Zoho Payroll to File State Taxes on Your Behalf (US)

Previously, Zoho Payroll could file and pay state payroll taxes on your behalf except for certain departments in the following states:
  • California
  • Colorado 
  • Hawaii
  • Iowa
  • Indiana
  • Massachusetts
  • Minnesota
  • New Mexico
  • North Dakota
  • Oklahoma
  • Pennsylvania
  • Texas
Now, you can authorize Zoho Payroll to handle payroll tax filing and payments for the remaining departments in these states as well. This can be done by granting us Third Party Adminstrator (TPA) Access through the official website or relevant portal of the states listed above. 

To learn how to authorize Zoho Payroll as a third-party access for your state, refer to our TPA setup guide. Once TPA is granted, Zoho Payroll will be able to file and pay state payroll taxes on behalf of your organization.

Other Enhancements

Sharjah Islamic Bank SIF File Format (UAE): If you choose to pay your employees via bank transfer, you can download the SIF file in the Sharjah Islamic Bank supported format from Zoho Payroll. Then, submit it manually to the Wages Protection System (WPS) or through your bank’s website to process the payment.

More Wage File Formats (KSA): If you choose to pay your employees via bank transfer in KSA, you can download the wage file in a format supported by Albilad Bank, AlJazira Bank, or Saudi National Bank from Zoho Payroll. You can then manually submit the file to the Wages Protection System (WPS) or through your bank’s website to process the payment.

Upcoming Change

Later next week, we’re rolling out an improved Settings section in Zoho Payroll. It will feature a cleaner layout, smarter grouping of options, and a built-in search to ensure consistency with other Zoho Finance products.





That's a wrap for now! We are always eager to hear your suggestions so we can help you do payroll better. Feel free to share them in the comments below.

If you need any assistance, please write to us at support@zohopayroll.com, and we'll help you. Stay tuned for more updates from Zoho Payroll.

With a shared purpose,
The Zoho Payroll Team



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