How to Settle Doctor Referral Commissions by UPI / NEFT (2026)

The manual settlement grind

For most independent labs, month-end referral settlement looks roughly the same: export or print a commission report from whatever system tracks it, open a banking app, and pay each referring doctor, consultant or collection centre one transaction at a time. Then, separately, message each of them (a WhatsApp text, a call, sometimes nothing) to say the payment has gone out and roughly what it covers.

Done across twenty or thirty payees, this is easily half a day of work, and it is fragile in a specific way: every step is a place where a number can be mistyped, a payee can be missed, or a cancelled bill from three weeks ago can get paid out anyway because nobody remembered to subtract it. None of that shows up until a referrer calls asking why their amount looks short, or your accountant asks for a TDS breakdown you now have to reconstruct by hand.

What to reconcile before you pay

The single most important discipline in this whole process is refusing to pay a number that has not been tied back to actual bills. A commission report that simply lists "doctor, amount" without a link to the underlying test lines is a number you are trusting, not verifying.

Before any transfer goes out, check three things per payee:

Every commission line ties to a specific bill and test: not a lump estimate for the period.
Cancellations and refunds in the period have been removed: a test that was billed and then cancelled should never generate a payout.
The rule applied matches what was agreed: flat amount or percentage, per test, per payee, and hasn't quietly drifted from an old rate.

If your commission numbers come from a spreadsheet reconstructed at month-end, this reconciliation step is exactly where the manual grind most often breaks down: our complete guide to doctor referral payouts covers why the tracking-vs-settling gap exists in most lab software in the first place.

The TDS step: deduct before you pay

Referral and commission payments in India generally attract TDS under Section 194H of the Income-tax Act (commonly 10%, subject to the prevailing threshold and rate), and the responsibility to deduct, deposit and report it sits with your lab, not the payee. In practice this means the amount you actually transfer by UPI or NEFT should already be the net figure (gross commission minus TDS), not the gross amount with tax handled separately later.

Keep three numbers on record for every payee, every period: gross commission, TDS deducted, net paid. If you want a quick sense of what a given rule produces before it hits a real settlement, try our free referral commission calculator. It estimates the commission and TDS together so the figure isn't hand-typed at the last minute. This is general information, not tax advice; confirm the current rate and threshold with your accountant.

Paying by UPI vs NEFT vs bank transfer at volume

For one or two payees, UPI is the path of least friction (instant, familiar, and easy for the payee to recognise on their end). It starts to strain once you have a real referral base: most UPI apps have per-transaction limits, and typing a consistent reference note for each payee, one at a time, is exactly the kind of repetitive step where mistakes creep in.

NEFT, or a bulk/batch transfer file from your bank's net-banking or corporate portal, tends to suit labs settling ten or more referrers in a period. A single batch upload can carry an amount and a reference per beneficiary, and the resulting bank statement becomes a clean, timestamped record on its own, useful if a payee later disputes what they received. Whichever rail you use, the two things worth insisting on are: pay from a reconciled net figure, never a rough estimate, and record the transaction reference (UPI ID or NEFT UTR) against that payee's statement, not just in your bank app.

Sending each payee a payslip and statement

A transfer landing in someone's account with no explanation is how disputes start. Every payee (referring doctor, consultant, collection centre or outside lab) should get something that shows the period covered, the gross commission, the TDS deducted and the net amount paid, ideally broken down enough that they can spot-check it against the patients they remember referring. A short WhatsApp message with the headline figures, backed by a printable statement on request, covers most relationships without turning settlement into an accounting exercise for the payee as well as for you.

What to keep on record

After the transfers go out, the file you want to be able to produce (for an accountant, a tax query, or a referrer dispute) is per payee, per period: the bills the commission was derived from, the gross amount, TDS deducted, net paid, the payment reference, and proof of notification. Scattered across a bank statement, a WhatsApp thread and a spreadsheet, this takes an afternoon to reconstruct. Kept together from the start, it's a lookup.

How HealthFlow does the whole thing in one Pay-Run

HealthFlow removes the manual assembly step entirely. You set a commission rule per test (flat or percentage, per payee) once, and the commission is computed automatically as each test is billed, stored in integer paise against that exact bill so nothing rounds away across a busy month and cancellations remove their own line cleanly.

At period-end, one Pay-Run settles referring doctors, consultants, collection centres and outside labs together, the whole list, reconciled against the bills the commissions came from, visible before you confirm anything. Each payee gets a WhatsApp payslip, you get a printable statement per payee and a full Excel export for your accountant, and your owner dashboard shows net revenue after commissions, live. Automatic doctor-referral payouts are part of a higher plan.

See exactly how HealthFlow's Pay-Run settles referral commissions →

Frequently asked questions

Should I pay referral commissions by UPI or NEFT?

Either works; the choice is mostly about volume and record-keeping, not legality. UPI is fast and fine for a handful of payees on small amounts, but most UPI apps cap single transactions and make it awkward to attach a consistent reference note across dozens of payees. NEFT (or a batch/bulk transfer file from your bank) tends to suit labs settling ten or more referrers a month, since it lets you push a single batch with amount and reference per beneficiary, and your bank statement becomes a clean paper trail. Whichever rail you use, the important part is not the transfer mechanism: it is that each payment ties back to a specific, reconciled commission statement.

Do I need to deduct TDS before paying a referring doctor or centre?

Generally, yes. Commission and brokerage payments in India fall under Section 194H of the Income-tax Act, and the payer (your lab) is responsible for deducting tax at source before the balance is paid out, then depositing and reporting it. Keep a record of the gross commission, the TDS withheld and the net amount actually transferred for every payee, every period. This is general information, not tax advice. Confirm the current rate and threshold with your accountant.

What records should I keep after settling referral payouts?

At minimum, per payee per period: the gross commission and how it was derived (which tests, which bills), the TDS deducted, the net amount paid, the payment date and reference (UPI transaction ID or NEFT UTR), and proof the payee was notified (a payslip, statement or message). Keeping these together, rather than scattered across a bank statement and a separate spreadsheet, is what makes a dispute or a tax query a five-minute lookup instead of an afternoon of reconstruction.

How to settle doctor referral commissions by UPI or NEFT