Contractors

Manage independent contractors and 1099 payments.

You hired a freelancer, consultant, or agency to do some work. They’re not an employee — you don’t withhold taxes, you don’t offer benefits, and at year-end you send them a 1099 instead of a W-2.

But you still need to track what you pay them. Both because you want to know where your money goes, and because the IRS requires you to report payments over $600.

Employee vs. contractor

The distinction matters — a lot.

Factor	Employee	Contractor
Tax withholding	You withhold from their pay	They handle their own taxes
Benefits	May receive	Not eligible
Work control	You direct when/how/where	They control their process
Equipment	You provide	They provide their own
Tax form	W-2	1099-NEC

Misclassifying employees as contractors can result in back taxes, penalties, and lawsuits. The IRS and state agencies take this seriously. If you’re unsure, consult an employment attorney or accountant.

Adding a contractor

1. Go to Payroll

   Navigate to Payroll → Contractors and click Add Contractor.

2. Enter info

   • Name (or business name)
   • Email
   • Phone
   • Address
3. Tax information

   From their W-9:

   • Tax ID type (SSN or EIN)
   • Tax ID number
   • Business type
4. Payment info

   • Payment method (check, ACH, etc.)
   • Bank details (if direct deposit)
   • Default rate (optional)

Contractor information

What you need for each contractor:

Field	Why it matters
Name	Legal name or business name (as it appears on their W-9)
Email	For payment notifications and 1099 delivery
Address	Goes on their 1099
Tax ID	SSN or EIN — required for 1099 filing
Business type	Sole prop, LLC, Corp (corps usually don’t need 1099s)
W-9 on file	Have you collected it?

Collecting W-9s

Get the W-9 before you pay them. Chasing contractors for tax info in January is not fun.

Electronic (recommended):

1. Click Request W-9
2. Contractor receives a secure link
3. They complete and sign electronically
4. W-9 saves to their profile

Manual:

Upload a PDF of a completed W-9 they’ve sent you.

Paying contractors

One-time payment

Fastest way to pay a contractor:

1. Go to Payroll → Pay Contractor
2. Select the contractor
3. Enter amount and description
4. Choose payment method
5. Process

Through accounts payable

If you prefer to treat contractor payments like bills:

1. Add the contractor as a vendor
2. Create a bill when they invoice you
3. Pay the bill
4. Payment links to their 1099 tracking automatically

This approach gives you more visibility into cash flow and upcoming payments.

Recurring payments

For ongoing retainers or regular work:

1. Set up a recurring payment
2. Payments process automatically
3. All tracked for year-end 1099

Payment methods

Method	Details
Check	Print or mail check
Direct deposit	ACH to their bank
Wire	For larger payments
PayPal/Venmo	Track but pay externally

1099 tracking

Throughout the year, Pluvel tracks:

What’s tracked	Why
Total payments YTD	This becomes Box 1 on the 1099
Payment dates	Audit trail if anyone asks
Payment method	Your records

The $600 threshold

If you pay a contractor $600 or more in a calendar year, you must send them a 1099-NEC.

Pluvel alerts you when:

• A contractor approaches $600 (time to make sure you have their W-9)
• W-9 is missing for someone you’ve paid $600+
• Tax ID isn’t on file

Don’t wait until January to collect W-9s. By then, contractors have moved on and don’t care about your tax compliance problems.

Generating 1099s

At year-end (deadline: January 31):

1. Go to Payroll → Tax Forms → 1099s
2. Review all contractors over $600
3. Verify names, addresses, and tax IDs
4. Generate forms
5. E-file with IRS
6. Send copies to contractors

See 1099 Forms for the full process.

Contractor portal

Give contractors access to:

• View their payment history
• Download 1099s when available
• Update their contact info
• Submit W-9 electronically

Less email back-and-forth for everyone.

Pay schedules

Set up when employees get paid.