Contractor management is now in ZekoHR: Contractors and employees in one HR system

ZekoHR now does contractor management. From today, 22 October 2026, every ZekoHR plan can hold individual Contractors and staffing agencies in the same HR system as your employees: each Contractor gets a proper record, an engagement that holds the terms you agreed, and a login that shows only what you allow. Agencies can propose their own workers, and HR approves them before anyone gets access. This post covers why contractor management in India belongs in your HRMS rather than a spreadsheet, what is live today, a short walkthrough, and what comes next.

Why contractor management belongs in your HR system

Many growing Indian companies work with people who are not on the payroll: a freelance designer on a monthly retainer, a consultant billing by the day, a data migration specialist for six months, or four testers placed by a staffing agency. Their details usually live in three places at once: a spreadsheet of names and rates, a signed SOW in someone's inbox, and the agency's own records. Your HR system, meanwhile, knows nothing about them.

That gap costs more than tidiness.

• Engagements end without anyone noticing. The contract ran out in August, the person is still in the office in October, and nobody can say on what terms.
• Access is all or nothing. Either a Contractor gets a full employee login, or they miss the announcements, holiday list and policies that everyone else sees.
• Agency workers are invisible. You know the agency's name, and perhaps four of the six people it placed with you.

There are legal reasons too. Under the POSH Act, "employee" expressly includes people engaged through a contractor and contract workers, so a contract worker needs the same route to raise a complaint as anyone else (our POSH basics for small companies covers the rest). The four Labour Codes came into force on 21 November 2025; the Occupational Safety, Health and Working Conditions Code, which replaces the Contract Labour Act among others, keeps duties on the principal employer, including paying contract workers if their contractor fails to. And the line between a contractor and an employee is drawn by the courts on facts, chiefly who controls, pays, supervises and can dismiss the person, as the Supreme Court set out in Balwant Rai Saluja v Air India (2014). The EPF Act already counts people employed through a contractor as employees for provident fund. None of this needs special software, but all of it is easier when you can see every Contractor, their engagement and their documents in one place.

What is live today

Everything in this section is live on app.zekohr.com, on every plan, including the free year.

Contractors as a separate worker type. A Contractor sits beside employees in the same system, but is never mistaken for one. There are two kinds: individual Contractors you engage directly, and agencies, which have one or more agency admins plus the workers they place with you.

Engagements that hold the contract. Each Contractor has one or more engagements, and each engagement records:

• the company, the reporting manager and the start and end dates
• the rate, as hourly, daily, monthly, milestone or fixed
• the payout track, payroll or invoice (agencies and GST-registered Contractors are invoice-only)
• whether leave applies to this engagement, a contract cap, and TDS defaults
• the SOW, while the MSA sits on the Contractor or agency

Contractor login and access controls. Contractors sign in to their own home screen. Under Settings, Contractor access, each company decides which modules Contractors see: feed and kudos, announcements, grievances including POSH, documents, assets, directory, attendance, holidays, policies and letters. All of them start switched on, and each can be switched off.

The details that save time.

• A "Contractor" badge in the directory, with the agency name for agency workers
• A separate Contractor code series, such as CTR-0001, so employee codes stay unbroken
• Hire a candidate as a Contractor straight from Recruitment
• Bulk import, and a "Convert to Contractor" action for people you previously added as employees with a contractor employment type
• Engagement-end reminders to HR and the manager 30 and 7 days before the end date, then daily once it has passed
• PAN and bank details stored encrypted, the same way ZekoHR stores employee payroll details

A walkthrough: adding an agency and its workers

Here is how a typical staffing agency arrangement works in ZekoHR.

1. HR adds the agency with its PAN, GSTIN and bank details, uploads the MSA, and adds the agency admin. HR also decides whether this agency may propose its own workers.
2. The agency admin signs in on a phone or laptop and sees the agency's own workers and engagements, and never another agency's people.
3. The agency proposes a new worker, with the role and proposed engagement. At this point it is only a request: no login is created and no seat is used.
4. HR approves or rejects. On approval, the worker gets an engagement and an invite.
5. The worker signs in to their Contractor home screen and sees exactly what your Contractor access settings allow, with a Contractor badge in the directory.
6. ZekoHR keeps watch on the end date, reminding HR and the manager before the engagement ends. Renewing or ending stays a human decision.

An individual Contractor follows the same path without the agency steps: HR creates the Contractor and the engagement, then sends the invite.

TDS on contractor payments in 2026: what changed

Each ZekoHR engagement stores TDS defaults, so it is worth knowing what those defaults should say now. The Income-tax Act 2025 came into force on 1 April 2026 and replaced the 1961 Act. TDS on payments to residents is now consolidated in section 393, which carries the old provisions forward in a table:

• Payments to contractors (formerly section 194C): 1% where the contractor is an individual or HUF and 2% for others. Commonly cited thresholds are ₹30,000 for a single payment or ₹1,00,000 in aggregate in a year.
• Fees for professional or technical services (formerly section 194J): 10% for professional services and 2% for technical services. The threshold rose from ₹30,000 to ₹50,000 from 1 April 2025.
• No PAN: tax is generally deducted at the higher of 20% or the normal rate.
• GST: where GST is shown separately on the invoice, TDS applies to the amount excluding GST (CBDT Circular 23/2017).

One more date to track: payments to micro and small enterprises registered under the MSMED Act are due within the agreed date, capped at 45 days from acceptance, or 15 days without a written agreement. Since assessment year 2024-25, an expense paid late to such a supplier is deductible only in the year it is actually paid.

Rates, thresholds and section numbers change, and the new Act renumbers almost everything. Treat this as general information, not tax advice, and confirm the sections and rates for your Contractors with your CA.

The same per-user price, no per-Contractor fee

Global contractor platforms usually charge per contractor per month; at the time of writing, Deel's pricing page lists contractor management from $49 per contractor a month and Remote's from $29. ZekoHR does not add a Contractor fee. Every Contractor, agency admin and approved agency worker is a user at the same per-user price as an employee, and pending agency requests are not counted. The pricing page shows the live rates.

What comes next

The next phase is about paying Contractors. None of it is live yet, and we will write about each piece when it ships, not before.

• Contractor timesheets: hourly, task-based or daily per engagement, approved by the manager, or none at all where it does not fit.
• Contractor invoices: upload an invoice, review an auto-drafted retainer invoice, generate one from approved timesheets, or build a GST invoice in the app.
• Invoice approvals with their own approval rules.
• A Contractor Pay Run that works like payroll, with TDS computed automatically and partial payments.
• MSME 45-day tracking and a bank payment file.
• Overseas Contractors, with foreign-currency invoices.

Frequently asked questions

Which ZekoHR plans include contractor management?

All of them: Starter, Growth and Pro, and the free year. Each Contractor, agency admin and approved agency worker counts as a user at the normal per-user price.

Can Contractors see everything employees see?

No. Contractors get their own home screen, and each company chooses which modules they see. They never get payroll administration, people management or other people's records.

Can ZekoHR deduct TDS and pay Contractors today?

Not yet. Engagements record the payout track and TDS defaults today. Invoices, approvals and a Contractor Pay Run with automatic TDS are coming next.

We already added contract staff as employees. What happens to them?

They stay as they are until you choose to act. HR sees them listed with a "Convert to Contractor" action, so you can move them across one at a time.

Does ZekoHR handle contract labour (CLRA or OSH Code) registers and returns?

No. ZekoHR keeps clean records of Contractors, agencies, engagements and documents, which helps when you need to show who worked for you and on what terms, but it does not file contract labour registrations, licences or returns.

Getting started

If you are already on ZekoHR, HR will find Contractors under People. If you are not, the Contractors page has the details, and the free year includes it.

This article is general information, not legal or tax advice. Laws, rates and thresholds change; confirm what applies to your company with a qualified professional.