Quick answer
Contractor Payouts pays workers whose employment type uses the payout model — contractors, freelancers and vendor workers — outside statutory payroll. Give each worker a pay profile (hourly, monthly fee or per engagement, with 194J/194C TDS), generate a month of drafts, fill in hours, then approve, export the bank CSV and mark paid.
Who gets paid here?
Employment types are split into two payment models (see Admin → Settings → Workforce Types): salaried types go through Payroll runs with PF/ESI/PT, while payout types — contractors, freelancers and vendor workers by default — are paid through this simpler monthly ledger with TDS only. That keeps a freelancer's invoice-style payment from ever picking up statutory salary deductions. Payout workers don't even need an ASHR login — add them with "Create without login" on the Add Employee form and they aren't billed as a seat, still get paid here as normal, and can be invited to ASHR later from their employee page.
Setting up a worker's pay profile
Open Contractor Payouts → Workers. Every payout-type worker is listed with their current profile and a bank-details check. A pay profile has:
- Pay model — Hourly (rate × hours each month), Monthly fee (fixed retainer), or Per engagement (fixed fee, edit per month as needed).
- Rate and currency.
- TDS section and rate — pre-filled from the employment type: freelancers default to 194J @ 10%, contractors and vendor workers to 194C @ 2%. Pick None for workers not subject to TDS.
For example: a freelance designer on ₹1,200/hour under 194J. Saving a profile is effective-dated — the old profile is kept as history and months already generated keep their snapshotted rate, so a rate change never rewrites an old payout.
The monthly cycle
Generate the month
One click creates a draft row for every active payout worker who has a pay profile — rate and TDS are snapshotted. Re-running it later only adds workers who are missing, never duplicates.Enter hours and adjustments
Hourly workers get their hours typed straight into the table; gross, TDS and net recompute instantly. Edit any draft row to add additions (bonus, reimbursement) or deductions (advance recovery), tune the TDS rate, or note something for the advice.Approve all
Approval freezes the numbers and unlocks the bank CSV.Pay and mark paid
Download the bank CSV (workers missing bank details or with zero net are skipped and listed), pay through your bank, then Mark paid. Each worker with a login gets a notification.
The math is simple and predictable: gross = base + additions, TDS = gross × rate, net = gross − TDS − deductions.
Payment advices
Every approved or paid payout has a payment advice PDF on your company letterhead — worker and period, the hours × rate breakdown, additions and deductions, the TDS section, rate and amount, and the net payable. Admins download it from the month view; a worker with a login downloads their own from Payouts, where they see a read-only history of just their rows.
Frequently asked questions
- Who is paid through Contractor Payouts instead of Payroll?
- Anyone whose employment type has the "payout" payment model — contractors, freelancers and vendor workers by default. Salaried types (full-time, part-time, interns) stay on payroll runs. You can change this per type under Admin → Settings → Workforce Types.
- What if a worker has no bank details?
- They are skipped from the bank CSV and listed by name so you can pay them another way. The Workers page shows a "missing bank details" warning with a link to add them.
- Can a contractor see their own payouts?
- Yes. A payout worker with a login sees a read-only history of their own payouts at the same Payouts link, with a payment-advice PDF for each approved or paid month. They never see other workers' rates.
- How is TDS calculated?
- Each pay profile carries a TDS section (194J professional / 194C contract / none) and a rate, pre-filled from the worker's employment type — 10% for freelancers under 194J, 2% for contractors under 194C by default. TDS is applied to the gross (base plus additions) and can be adjusted per draft row.