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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. 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. 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. 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. 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.

Freelancer & contractor pay
Hourly and retainer billing
194J/194C TDS handling
Bank-CSV payout runs

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.

Ready to try Contractor Payouts?

Start free in minutes, or book a walkthrough with our team.