Are Freelancers on Client Payrolls Required to Contribute to PF and ESIC?

Hi All,

Please suggest the PF/ESIC rules for Freelancer-Professional Services Providers (tax deducted under Section 94J) who are working on our payroll at the client's side on a per-day basis. They work for 1 day, 2 days, 7 days, or as per client requirements. Are they liable for PF contribution?

Regards, Trapti

When the gross payment is going to be over ₹30,000 per year, TDS is applicable at 10% under section 194J (professional service). However, the recipient can claim the TDS deducted by filing ITR-3 with the department. To file the claim, obtain Form 16A from the deductor.

Dear Trapti,

If the employee does not receive "wages," PF and ESIC will not be applicable.

Shailesh Parikh
99 98 97 10 65
Vadodara

Thank you for your response.

Yes, I agree with Usha ji. We are currently following the same process, but I would like clarification on whether we need to obtain PF and ESIC code numbers. Will PF or ESIC be applicable for freelancers as well? I have spoken to a few CAs, but they have caused confusion regarding PF and ESIC for freelancers.

Contract workers are not regular employees; they are paid for their "allocated job" and not for duty. This applies to professionals like Chartered Accountants or inspection agencies who work for more than one establishment simultaneously; they receive professional skill fees. Wage and salary earners are eligible for ESIC/EPF.