Who Pays the PF for Contract Employees: Principal Employer or Contractor?

Principal Employer's Responsibility for PF Payment

I have learned that it is the responsibility of the principal employer to pay the PF for the contract employee and then claim it back from the contractor. Is this a standard practice, or does the principal employer rely on the contractor to pay the PF and collect the challan copy from them?

Thanks,
Sonia

Contractors need to pay PF for their employees working under them, and it is the responsibility of the principal employer to check the challan and ensure it is stamped with the company name for which the amount is being deposited.

Nowadays, a common issue arises when a contractor holds contracts with multiple industries. During the last month's PF challan submission, they often combine the total number of employees from all contracts, showing a higher number (e.g., 500 employees). In such cases, the principal employer cannot ascertain the contributions of individual employees working under them.

Therefore, it is essential to ensure that each challan is separate, showing the total number of employees for that specific contract with the appropriate seal. This practice will help avoid any discrepancies in the future.

Kind regards,