Contractors

Contractors are people or organizations that an organization hires to do a particular job or project for a specified amount of time. They are not employees and usually work under a contract that specifies the scope, duration, and terms of payment of their work.

Scenario: Let’s consider Notre, a technology company that is currently working on developing emerging AI tech for a major client. To handle the sudden spike in workload, they bring in Seetha, a freelance developer tools consultant, on a 3-month contract.

She’s not a full-time employee—she uses her own tools, sets her own hours, and the firm pays her at the end of each month.

Once the product launch wraps up and her contract ends, Seetha’s engagement with the company is complete. She’s no longer part of your project workflows or the organisation.

This is how a contractor works—brought in for specific tasks, for a fixed period, and not formally employed by your organisation. Now, let’s see how you can manage contractors in Zoho ERP:

Create Contractors

To create a contractor:

Go to People on the left sidebar.
Navigate to Contractors tab on the module bar on top.
Click Add Contractor.
Enter the basic details.

Basic Details	Description
Contractor ID	Enter the unique ID used to identify the contractor. You can either enter the ID manually or choose to auto-generate them by clicking the Settings icon.
Date of Joining	The day when the contractor begins to work for the company officially.
Work Location	The location where the contractor works.
Contract End Date	The date the contract ends. The contractor will no longer work after the contract end date.
Reporting To	Select the person who oversees the work of the contractor.
Designation	Select the position of the contractor in your organisation.
Department	Select the department or team the contractor belongs too.
Enable Portal Access	Once this option is selected, the contractor will be able to view the payment details in the portal.
Pay Rate	Enter the fixed amount that you pay to the contractor every month.
TDS	The tax deducted at source for the contractor’s monthly pay.
Enable Statutory Components	Select to configure the benefits applicable to the contractor.

In Zoho ERP, you can associate three types of TDS to a contractor.

TDS Rate	Description
No TDS	No tax will be deducted from their paid rate if it is 50,000 during the year.
Technical Services TDS 194J - (2%)	Apply this TDS for managerial, consultancy, and technical services.
Professional Services TDS 194J - (10%)	Apply this TDS for medical, architectural, advertising, legal, engineer, and other notified professions.

Next, you have to enter the personal details of the contractor, such as their date of birth, father’s name, age, residential address, PAN, and personal email address.

Choose the payment method you would like to use to pay this contractor.
- Direct Deposit: Transfer the money directly to your contractor’s bank account. You would have to configure ICICI, Yes Bank, HSBC Bank or Payouts by Zoho Payemnts for your Zoho ERP organisation to choose this payment method.
- Bank Transfer: Manually transfer the money to your contractor’s bank account.
- Cheque: Manually send cheques to your contractors and record them in Zoho ERP.
Click Save and Continue.

You have now created a contractor.

Import Contractors

If you want to add multiple contractors to Zoho ERP at once, you can import them. Here’s how:

Go to People on the left sidebar.
Navigate to Contractors tab on the module bar on top.
Click the More icon and select Import Data.
Select Contractor Details as the type of contractor details you want to import.
Click Proceed.
Upload the import file and map the Zoho ERP file fields with the import fields.
Click Next and click Import.

View Contractor Details

Once you’ve added contractors, here’s how you can view their details:

Go to People on the left sidebar.
Navigate to Contractors tab on the module bar on top.
Select the contractor whose details you want to view.

Here, you will be able to view all the details related to the contractor.

View Contractor Payments

If you have run pay runs which include contractors, you would want to view a contractor’s payment history. Here’s how:

Go to People on the left sidebar.
Navigate to Contractors tab on the module bar on top.
Select the contractor whose details you want to view.
Switch to the Payments tab.

Here, you will be able to view the payment history of the contractor.

Note: You can use the period filter to view payment history based on the year.

Edit Contractor

To edit the details of an contractor:

Go to People on the left sidebar.
Navigate to Contractors tab on the module bar on top.
Select the contractor whose details you want to edit.
Click the Edit icon next to the section that you want to edit.

Edit Salary Information

To edit the salary information of the contractor before they have been involved in a pay run:

Go to People on the left sidebar.
Navigate to Contractors tab on the module bar on top.
Select the contractor whose details you want to edit.
Click the Edit icon.
Update the details and click Save.

Edit TDS Rate

To edit the TDS rate of an contractor after they have been involved in a pay run:

Go to People on the left sidebar.
Navigate to Contractors tab on the module bar on top.
Select the contractor whose details you want to edit.
Click the More icon next to the Salary Information section and select Edit TDS Rate.
Change the TDS rate and click Save.

Revise Contractor Salary

To revise the salary of a contractor after they have been involved in a pay run:

Go to People on the left sidebar.
Navigate to Contractors tab on the module bar on top.
Select the contractor whose salary you want to revise.
Click the More icon next to the Salary Information section and select Revise.
Enter the Pay Rate per month and Revised Salary effective from date.
Click Save.

Delete Contractor

If an contractor is not a part of any current or completed pay runs and you , you can delete them from Zoho Payroll. Here’s how:

Go to People on the left sidebar.
Navigate to Contractors tab on the module bar on top.
Click the name of the contractor whose details you want to delete.
Click the More icon and select Delete Contractor

Note: If you want to manage exit for an contractor (termination), you’ll have to initiate the exit for the contractor. Initiating exit is different from deleting a contractor.