Can We Deduct Both Contractor and Labor PF Contributions from the Contractor's Bill?

Hi,

Our company wants to deposit the contractor's PF contribution on its own and deduct the contributed amount from the contractor's bill (as the contractor is not registered in EPFO). Now, my question is, shall we deduct both the contractor's and labor's contributions from his bill?

Regards,
S. Sarkar

Dear,

In this case, you have to allot them PF number from your code, and you are required to deposit both shares. If the contractor does not have a PF code, then no other alternative, you have to deposit both shares on your code only.

Regards,
J.S. Malik

You can very well deposit the amount in respect of the contractors' employees as per the provisions of Section 8A of the Provident Fund Act.

Regards,
Rajendra Bhavsar

Dear,

I agree with Mr. Malik ji, and you can deduct the employer's side PF from your contractor's bill, if they agree. If not, then search for a new one. Please explain the legal terms to your contractor and ensure they are allocated a PF number.

What about the ESI - is the contractor paying this?

Best Regards,

Sajid Ansari

It is primarily the duty of the contractor to deposit the EPF amount. He is supposed to be covered under the EPF Act and possess an establishment code number. If he does not have it, but you have one, being a covered establishment, and you deposit the amount under your code, that may create complications for you. In the sense that the contract employees also may stake claim that they are your employees and you may be liable to pay all other statutory payments as well. So think twice before doing that.