SAC codes
SAC code for payroll outsourcing: 998223
Running a client's salaries, payslips and statutory deductions is a payroll service; putting their staff on your rolls is a staffing service.
In short
Payroll processing for clients uses SAC 998223, payroll services, usually at 18% under forward charge, on your fee only. SimpleERP bills the fee per employee per month, with the SAC printed on every line.
Illustration of GST tax invoice INV-2026-27-0213 to Ravi Stores with CGST 9% and SGST 9%, round off, a UPI QR code and the amount in words.
The data
SAC 998223 at a glance
| Item | Value |
|---|---|
| 6-digit SAC | 998223 (998515 when staff are on your rolls) |
| 4-digit group | 9982: legal and accounting services |
| Chapter 99 heading | Payroll services |
| Usual GST rate | 18% on the processing fee (as notified; check the GST portal) |
| Reverse charge | Forward charge for most suppliers: the payroll firm charges GST |
| Exemption | No general exemption; salaries paid by the client to its own employees are outside GST |
| Who typically bills it | Payroll bureaus, accounting firms, HR outsourcing companies and CAs |
Sources: CBIC: classification of services (SAC), CBIC: GST rates and notifications. Verified .
Which SAC code goes on a payroll outsourcing invoice?
Use 998223, payroll services, when you process a client's payroll: salary computation, payslips, PF, ESI, PT and TDS working, and payroll reports. It sits in group 9982, legal and accounting services, under chapter 99 (services), next to 998222 for accounting and bookkeeping.
When the workers are on your rolls and you supply them to the client, it is a staffing service, such as 998515, long-term staffing pay rolling services, or manpower supply. PayEase Solutions in Coimbatore, Tamil Nadu, processing the monthly payroll of 85 workers at Lakshmi Steel Furnitures for a fee per employee, bills under 998223.
What GST rate applies to payroll outsourcing?
Payroll processing is usually taxed at 18% on your fee. At ₹150 per employee for 85 employees, the fee is ₹12,750, with ₹1,147.50 CGST and ₹1,147.50 SGST for a client in your state. The client's salary bill is not part of your value when you only process it. Rates change, so confirm the rate for your goods or services with your CA or the GST portal before you rely on it.
- Per-employee or flat monthly fees take the same code
- Statutory filing support billed with payroll stays under 998223
- Staff on your rolls supplied to a client: staffing codes, with GST on the whole charge
- Bookkeeping in the same retainer: 998222 on its own line
A payroll outsourcing invoice line in SimpleERP
Save Payroll processing as a service with SAC 998223 and the unit Nos for employees. Each month's invoice shows the headcount as quantity and your per-employee fee as the rate.
- SAC 998223 prints on the payroll line
- Place of supply picks CGST plus SGST or IGST from the customer's state
- The HSN/SAC summary for GSTR-1 shows payroll and bookkeeping apart
- Overdue monthly fees show in the receivables ageing
Illustration of the keyboard-first invoice editor with a focused line, live tax totals and shortcut hints.
When is reverse charge or an exemption involved?
Payroll processing is under forward charge, and there is no exemption for business clients. What matters is the model. If you only process the payroll, GST is on your fee. If the staff are on your rolls and you recover their salaries plus a margin, the salaries are usually part of your taxable value as a staffing service. Pick the code that matches who the employer is.
- Forward charge on the processing fee
- Client's own employees' salaries: outside GST
- Staff on your rolls: salaries usually inside your taxable value
- Check the employer of record before you pick the code
FAQ
Questions, answered
I process payroll and the client pays salaries from its own bank. Is GST on the salary amount?
No. When the client is the employer and pays its staff, your supply is only the processing service, so GST applies to your fee. Keep the salary figures off your invoice or show them for information only.
Our staff are on our rolls and deployed at the client. Is that payroll outsourcing under 998223?
No. When you are the employer and supply the people, it is a staffing service, such as 998515 or manpower supply, and GST usually applies to the full charge, including salaries. Use the code your CA confirms for your contract.
Can I bill payroll and accounting on one invoice?
Yes. Payroll goes under 998223 and bookkeeping under 998222, each on its own line. Both are usually at 18%, and the HSN/SAC summary shows the two codes apart.
Do I need the client's GSTIN?
For a registered client, yes: it lets them claim input tax credit and sets the place of supply. SimpleERP validates the GSTIN when you add the customer and reads the state from its first two digits.
Related
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The code that classifies services for GST, as HSN codes do for goods.
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