Contractor Payouts
Pay contractors, freelancers and vendor workers on their own monthly ledger — with TDS, bank exports and branded advices, kept cleanly apart from salaried payroll.
The problem
Contractors and freelancers don’t belong on a salary run — they invoice, they’re paid a fee or an hourly rate, and they attract 194J/194C TDS instead of PF, ESI and PT. Force them through payroll and they pick up statutory deductions that make no sense; keep them in a spreadsheet and you lose the audit trail, the TDS math and a professional payment record.
How we solve it
ASHR.work splits every employment type into one of two payment models. Salaried types go through payroll runs; payout types — contractors, freelancers and vendor workers — flow into a dedicated Contractor Payouts ledger. Each worker carries an effective-dated pay profile, so a rate change never rewrites a payout you already ran, and the whole month reconciles with predictable gross → TDS → net math.
How it works
- 1
Set a pay profile per worker
On Contractor Payouts → Workers, give each payout-type worker a model — hourly (rate × hours), monthly fee, or per engagement — plus a rate and a TDS section (194J professional @ 10%, 194C contract @ 2%, or none), pre-filled from their workforce type. Profiles are effective-dated, so history is preserved.
- 2
Generate the month
One click creates a draft row for every active payout worker with a profile, snapshotting the rate and TDS. Re-running only adds workers who are missing — it never duplicates a row.
- 3
Enter hours and adjustments
Type hours for hourly workers and gross/TDS/net recompute instantly. Edit any row to add a bonus or recover an advance, tune the TDS rate, or leave a note for the advice.
- 4
Approve, pay and share advices
Approval freezes the numbers and unlocks a bank-transfer CSV (workers missing bank details or with zero net are skipped and listed). Pay through your bank, mark paid, and each worker with a login is notified and can download their payment-advice PDF.
Why it’s effective
Freelancers never touch statutory salary
Because payment model is set on the employment type, a contractor’s invoice-style payout can’t accidentally pick up PF/ESI/PT — TDS only, every time.
Rate changes are safe by construction
Effective-dated profiles and per-month snapshots mean an updated rate applies going forward and never rewrites a payout you already approved.
A professional record, not a spreadsheet
Every approved payout has a branded payment-advice PDF, and payout workers with logins see a read-only history of just their own rows — no shared sheet, no rate leakage.
What’s live today
- Payout ledger separate from salaried payroll, driven by workforce-type payment model
- Per-worker pay profiles: hourly, monthly fee or per engagement, effective-dated
- 194J / 194C / none TDS section and rate, pre-filled from employment type
- One-click monthly draft generation with rate + TDS snapshotting
- Inline hours entry with instant gross → TDS → net recomputation
- Per-row additions (bonus, reimbursement) and deductions (advance recovery)
- Bank-transfer CSV export with missing-bank-details warnings
- Branded payment-advice PDFs on your letterhead; self-serve worker history
- Payout workers can be added without a billed ASHR seat ("create without login")
Typical use cases
A few of the ways teams use Contractor Payouts.
Frequently asked
- Who is paid through Contractor Payouts instead of Payroll?
- Anyone whose employment type uses the "payout" payment model — contractors, freelancers and vendor workers by default. Salaried types (full-time, part-time, interns) stay on payroll runs. It’s configurable per type under Admin → Settings → Workforce Types.
- How is TDS handled?
- Each pay profile carries a TDS section (194J @ 10% for freelancers, 194C @ 2% for contractors/vendors, or none) applied to the gross. It’s snapshotted per month and adjustable per draft row.
- Do contractors need an ASHR login or a paid seat?
- No. Add them with "Create without login" and they aren’t billed as a seat but are still paid here. Invite them to ASHR later if you want them to see their own payout history.
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Ready to try Contractor Payouts?
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