Payroll Subsidy is a Tamil Nadu government scheme that helps MSMEs bring down their regular employee costs. Through this scheme, a business can claim back the employee share of the EPF contribution, up to a maximum of ₹24,000 per employee each year.
Applications for the scheme are being accepted online on the official MSME portal of Tamil Nadu. The Micro, Small and Medium Enterprises Department runs the scheme for micro, small and medium units located across the state.
Payroll Subsidy - Introduction
Payroll Subsidy gives useful support to MSMEs by cutting down the money a business has to spend on its workers every month. The scheme returns the employee part of the EPF contribution for a period of three years, starting from the day you begin commercial production. You can get back a maximum of ₹24,000 per employee each year.
The benefit is claimed online, and the claim should be filed within three months after the end of the financial year for which you are requesting the subsidy. Since the scheme is still open for applications, eligible MSMEs can submit their claims through the official portal.
Key Information
Here are the main details of Payroll Subsidy for quick reference.
| Scheme Name | Payroll Subsidy |
| Level | State |
| Primary Focus | Infra |
| State | Tamil Nadu |
| Category | Business & Entrepreneurship |
| Target Beneficiaries | Business Entity |
| Main Department | Micro, Small and Medium Enterprises Department |
| Benefit Amount | Up to ₹24,000 per employee per year for 3 years |
| Application Mode | Online |
Benefits
This scheme helps your business by paying back the employee EPF contribution. You can claim this support for the first three years after you start commercial production. The maximum amount you can receive is ₹24,000 per employee each year.
Because the reimbursement is paid every year for three years, a business with a larger regular workforce can bring down its salary-related costs by a good amount over time. This makes it easier for newer and growing MSMEs to keep their worker count stable.
Eligibility
To qualify for this support, your unit should meet the conditions given below.
- You operate a micro enterprise anywhere within Tamil Nadu.
- You run a small or medium enterprise located in one of the 254 industrially backward blocks or in industrial estates promoted by the state government, TANSIDCO, or SIPCOT.
- You operate an agro-based small or medium enterprise in any of the state's 388 blocks.
- Your unit should employ more than 20 regular workers. Temporary, contract, or casual workers do not count toward this total.
- If your employee count drops below 20 in a particular month, you can claim the subsidy only for the months where you met the minimum requirement.
You can check your eligibility here.
Exclusions
Certain manufacturing activities are not covered by this scheme. These include:
| Sugar | Distilleries, brewery and malt extraction |
| Potable alcohol from molasses | Fertiliser (excluding bio-fertilisers) |
| Mining and quarrying | Iron and steel smelting |
| Tobacco-based products | Saw mills |
| Cement production | Aluminium smelting |
| Calcium carbide | Slaughter houses |
| Repacking units | Azoic or reactive dyes |
| Fire crackers | Ozone depleting substances |
| Poultry | Cyanide, Caustic soda, Potassium chloride |
| Synthetic fibres | Single-use plastics |
Also, all service-sector MSMEs and any other activities specifically notified by the government are excluded from this scheme.
Application Process
You should follow this online process to apply for the subsidy.
STEP 1 - Visit the official portal of the MSME Department, Tamil Nadu. Click on the Login / Registration tab. Provide your personal details like your name, date of birth, Aadhaar number, email, and mobile number. Set a secure password and submit the registration form.
STEP 2 - Use your registered credentials to log in to the official portal.
STEP 3 - Navigate to the Schemes section, then click on the relevant scheme. Select New Application under the Apply Online menu. Fill in all required fields in the application form, agree to the terms, and save your reference number.
STEP 4 - Go to the Upload Documents link in the dashboard, enter your Application ID, and upload all required documents in the requested format. Review them carefully before proceeding.
STEP 5 - Once you verify all details, click Submit Application. You will receive an update on your registered mobile number once the application reaches the relevant official. You may also track your status online.
Remember, submit your application within three months after the end of the financial year for which you are claiming the subsidy.
Documents
Keep the following documents ready for upload while applying.
- Copy of the UDYAM Registration Certificate
- Copy of the TANGEDCO meter card
- Land purchase deed (if owned) or a valid lease agreement for at least 11 months (on ₹100 stamp paper)
- Machinery invoice and the first sale invoice after commercial production
- Returns filed under the Employees Provident Fund Act, 1952
- NOC and relevant tax receipts
Note: All files should be in PDF format and under 200 KB each.
References
Official Portal | Application & Documents | Check Eligibility | Contact Us
FAQ's
Is there a specific file size limit for documents?
Yes, make sure all files are in PDF format and smaller than 200 KB.
What is the deadline for filing my claim?
Submit your application within three months after the end of the financial year for which you are claiming.
Are service-based MSMEs eligible?
No, service-based MSMEs are currently not eligible for this subsidy.
How does the department verify my employees?
Verification is done through your statutory returns, such as those filed under the Employees Provident Fund Act, 1952.
Are contract workers included in the employee count?
No, only regular employees are counted. Temporary, casual, and contract workers are excluded.
How much will I receive per employee?
You can get a reimbursement of up to ₹24,000 per employee per year for the first three years of commercial production.