§ 1
Payroll across the life of a project
Where work is done through contractors, the project office as principal employer remains responsible for ensuring contract workers receive wages and statutory benefits. Construction projects also attract the building and other construction workers' cess and registration requirements now covered by the labour codes.
Expatriate engineers and managers become liable to Indian tax for their work in India and, as international workers, to provident fund unless covered by a social security agreement. At completion, settlements for local staff and the final tax position of expatriates must be closed before the office can be wound up.
§ 2
The law that applies
| Labour codes, including provisions on contract labour and construction workers | Principal employer duties, registrations and cess. |
|---|---|
| Income-tax Act, 2025 | TDS on salaries of local and expatriate staff. |
| Social security agreements | PF exemption for covered expatriates. |
§ 3
Issues and how we solve them
The problems that most often hold up or complicate this work, and how we deal with each.
Issue 1
Contractors do not pay statutory dues for their workers.
Our approach
We set up monthly checks of contractor PF and ESI payments and wage registers before releasing contractor invoices.
Issue 2
Expatriates rotate in and out, making residence uncertain.
Our approach
We track days in India for each expatriate and adjust withholding as their residence position becomes clear.
§ 4
Process and timeline
- 1
Mobilisation
Start of projectRegistrations, contractor onboarding checks, expatriate tax set-up.
- 2
Monthly
MonthlyPayroll, contractor compliance checks, statutory payments.
- 3
Demobilisation
CompletionFinal settlements, expatriate exit tax and closure of registrations.
§ 5
Our scope of work
Included
- Registrations
- Monthly payroll
- Contractor compliance checks
- Expatriate tax and PF
- Demobilisation settlements
§ 6
Questions
Is the project office liable for contractors' workers?
As principal employer it must ensure contract workers receive wages and statutory benefits, and may have to pay them if the contractor fails to.
Prepared by CA Utsav Dogra, Chartered Accountant, ICAI M. No. 542375, SU and Company · Last reviewed 4 November 2026. General information only, based on the law as it stood on that date; it is not advice for any particular case.