Payroll Outsourcing Services Under SAC Code 998515
Payroll outsourcing services under this SAC code cover long term support where a service provider manages salary processing, statutory deductions and related compliances for an employer. Monthly payroll runs, payslip generation, PF and ESI calculations, TDS on salaries and basic reporting are normally covered in these payroll outsourcing and employee payroll services. Using this SAC code keeps payroll outsourcing fees clearly separate from staffing or recruitment spend in the books.
Payroll Outsourcing Services GST Rate for SAC Code 998515
Under GST, payroll outsourcing is treated as a business support and HR service. The taxable value generally covers fixed monthly fees, per employee processing charges, set up fees, year end processing and additional charges for statutory filings handled by the service provider.
Even before September 2025, such payroll services were typically taxed at the standard rate. After the GST slab changes, payroll outsourcing services under this code normally fall under the 18% slab in regular taxable situations, as they are professional and administrative support services.
The table below shows the latest standard GST rate for this SAC code.
| Code | Description | Old GST Rate (till 21 Sep 2025) |
New GST Rate (from 22 Sep 2025) |
Notes on change / inclusions |
|---|---|---|---|---|
| 998515 | Long-term staffing (pay rolling) services | 5% without ITC / 18% with ITC | 5% without ITC / 18% with ITC | Updated labour-services matrices show an option: a concessional 5% rate where conditions are met (typically no ITC on inputs, narrow payroll-service structures), and a regular 18% with ITC for full-credit models. GST 2.0 did not change this dual-rate pattern; in practice many B2B arrangements still use 18% with ITC. |
When issuing invoices, payroll service providers should describe the payroll outsourcing service, mention SAC 998515 and apply 18% GST wherever the fees are taxable, so that employers can easily reconcile HR costs and claim input tax credit if eligible.
Explore Other SAC Codes Under 9985
SAC 998515 also falls under heading 9985, which brings together recruitment, staffing, payroll and co employment services used by companies at different stages of growth. This heading reflects the wide range of ways in which businesses can outsource HR and employment related activities.
These are the main related six-digit SAC codes under 9985 that your software can show in a dynamic table instead of hardcoded text.
This payroll focused code should normally be used when the service provider is primarily processing salaries and related statutory deductions, with or without advisory support. If the core service is providing manpower on site, running temp staffing, handling permanent recruitment or offering full co employment, a different SAC from the 9985 group should be selected.
Conclusion
This SAC code is intended for payroll outsourcing and employee payroll processing where an external partner manages salary calculations and compliance on behalf of an employer. Such services are ordinarily taxed at 18% under GST. Proper use of this code and rate helps both the payroll provider and the client keep HR compliance costs transparent and claim input tax credit in a clean manner. For complex structures involving international assignees or multiple group companies, it is helpful to review the GST position with a qualified adviser.
Important Disclaimer
The entire content on this page has been arranged to the best of the author's understanding and is subject to periodic updates as per the law for the time being in force. The above does not constitute professional advice or a formal recommendation. While due care has been taken in preparing this content, the existence of mistakes and omissions cannot be ruled out. BUSY Infotech Private Ltd. and its associates will not be held responsible for any loss or damage arising from any inaccurate or incomplete information in this document. We recommend consulting a professional tax consultant before acting on the information contained in this piece of content.