The Payroll Subsidy Scheme aims to assist Micro, Small, and Medium Enterprises (MSMEs) in Tamil Nadu by reimbursing the employee’s contribution to the Employees’ Provident Fund (EPF) for the first three years from the date of commencement of commercial production. The subsidy is capped at ₹24,000 per employee per annum. The scheme is designed to support MSMEs in reducing the cost of hiring employees, thereby promoting industrial growth and formal employment.
Benefits
-
Subsidy on EPF Contribution:
• Reimbursement of the employee’s EPF contribution for the first three years from the date of commercial production.
• Maximum subsidy of ₹24,000 per employee per annum. • Eligible units can claim this benefit for employees who are regular workers (temporary or contract workers are excluded).
• For MSMEs in industrially backward blocks and agro-based MSMEs, additional support is available.
Eligibility
-
Micro Enterprises across Tamil Nadu.
-
Small and medium enterprises located in the 254 industrially backward blocks and all industrial estates promoted by the Government and its agencies like SIPCOT, TANSIDCO, etc.
-
Agro-based MSMEs set up in all 388 blocks of the state.
-
The enterprise should have more than 20 employees.
-
Only regular workers are considered for the subsidy; temporary, contract, or casual workers are excluded.
-
If the employee strength falls below 20 for any of the months, claims will be restricted to the months in which the conditions are met.
Exclusions
The following types of enterprises/activities are not eligible under the Payroll Subsidy Scheme:
-
Sugar
-
Distilleries and breweries
-
Fertilizer (except bio-fertilizers)
-
Mining and quarrying
-
Beedis, cigarettes, cigars, gutka, and tobacco products
-
All types of saw mills
-
Cement, aluminium smelting, calcium carbide
-
Slaughter houses
-
Repacking of drugs, chemicals, and medicines
-
Industries manufacturing ozone-depleting substances
-
Poultry, cyanide, caustic soda, potassium chloride, nylon, rayon, polyester fibers
-
One-time-use plastics
-
Service MSMEs
Application Process
Online Process:
-
Registration:
• Visit the official Tamil Nadu MSME portal and click on “Login / Registration”.
• Fill in the required details (name, date of birth, Aadhaar number, etc.) and create a login name and password.
• Complete the captcha code and click “Register”. -
Login and Application Submission:
• Log in to the portal with the credentials provided.
• Navigate to “Schemes” and click on the Payroll Subsidy Scheme.
• Fill in the online application form with all mandatory fields.
• Upload the required documents and submit the application.
• A unique reference number will be generated for tracking. -
Submission of Documents:
• Upload all necessary documents, including invoices, registration certificates, EPF returns, etc. -
Application Status:
• Track the status of your application on the portal. Notifications will be sent via email or SMS.
Offline Process:
The offline application procedure can be completed by submitting the necessary documents to the concerned office.
Documents Required
-
Copy of UDYAM Registration Certificate
-
Attested copy of TANGEDCO Meter Card
-
Land documents (Land Purchase Deed if owned or Lease Agreement if rented)
-
Copy of Machinery Invoice
-
First Sale Invoice after commencement of commercial production
-
EPF Returns
-
Tax receipt
-
Copy of NOC
-
PAN, Aadhaar, GST TIN copies
-
Employee and business details
-
Other supporting documents
Frequently Asked Questions (FAQs)
Q: What is the maximum reimbursement amount per employee under this scheme?
A: The maximum reimbursement is ₹24,000 per employee per annum.
Q: How is employee strength monitored for eligibility?
A: The number of regular employees must exceed 20 for eligibility. Temporary, contract, or casual employees are not considered.
Q: Can enterprises in industrially backward blocks apply for the scheme?
A: Yes, small and medium enterprises in industrially backward blocks are eligible.
Q: Can temporary or contract workers be included for subsidy claims?
A: No, only regular workers are eligible for the subsidy under this scheme.
Q: When should an enterprise file an application for the previous year’s claim?
A: Applications should be filed within 3 months after the completion of the financial year for the claim of the previous year.
Q: Are service MSMEs eligible for the subsidy?
A: No, service MSMEs are excluded from the benefits of this scheme.