> ## Documentation Index
> Fetch the complete documentation index at: https://docs.pluvel.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Add a contractor

> Set up contractors and vendors for 1099 payments.

You hired a designer, developer, consultant, or freelancer. They're not an employee — they control their own hours, use their own equipment, and handle their own taxes. That makes them a contractor.

The key difference: you don't withhold taxes from their payments. But you do need their W-9, and if you pay them \$600 or more in a year, you'll issue a 1099 at year-end.

## Contractor vs Employee

| Factor          | Employee                    | Contractor           |
| --------------- | --------------------------- | -------------------- |
| Tax withholding | You withhold taxes          | They pay their own   |
| Tax forms       | W-2                         | 1099-NEC             |
| Benefits        | Often provided              | Not provided         |
| Control         | You direct how work is done | They decide how      |
| Equipment       | Usually you provide         | Usually they provide |

<Warning>
  Misclassifying employees as contractors can result in IRS penalties, back taxes, and legal issues. When in doubt, consult with an attorney or accountant.
</Warning>

## What you need from contractors

Before paying a contractor, collect:

* **Form W-9** — Their tax ID (SSN or EIN) and business information
* **Payment details** — How they want to be paid
* **Contract** (recommended) — Scope of work, rates, terms

## Add a contractor

<Steps>
  <Step title="Go to Payroll">
    Click **Payroll** in the sidebar, then **Contractors**.
  </Step>

  <Step title="Click Add Contractor">
    Click the **Add Contractor** button.
  </Step>

  <Step title="Enter contractor details">
    * **Name** — Individual or business name
    * **Email address**
    * **Phone** (optional)
    * **Address** — Required for 1099 filing
  </Step>

  <Step title="Enter tax information">
    From their W-9:

    * **Tax ID type** — SSN or EIN
    * **Tax ID number**
    * **Business type** — Individual, LLC, Corporation, etc.
  </Step>

  <Step title="Set payment method">
    Choose how you'll pay them:

    * **Direct deposit** — Bank account details
    * **Check** — Mailed to their address
    * **Other** — PayPal, Venmo, etc. (track manually)
  </Step>

  <Step title="Save">
    The contractor is ready to receive payments.
  </Step>
</Steps>

## Request W-9 through Pluvel

Let contractors fill out their own W-9:

1. After adding basic info, click **Request W-9**
2. Contractor receives email with secure link
3. They complete and e-sign the W-9
4. Information auto-populates in Pluvel

This ensures accuracy and saves you data entry.

## Pay a contractor

<Steps>
  <Step title="Go to Payroll → Pay Contractors">
    Or click **Pay** on a contractor's profile.
  </Step>

  <Step title="Select contractors to pay">
    Check the contractors you're paying in this batch.
  </Step>

  <Step title="Enter payment amounts">
    For each contractor:

    * **Amount** — What you're paying
    * **Description** — What the payment is for
    * **Invoice number** (optional) — Reference their invoice
  </Step>

  <Step title="Review and confirm">
    Review the total and payment method for each.
  </Step>

  <Step title="Submit">
    Click **Submit Payments**. Direct deposits are sent on the specified date.
  </Step>
</Steps>

## Track contractor payments

All contractor payments are tracked for 1099 reporting:

1. Go to **Payroll → Contractors**
2. Click on a contractor
3. View **Payment History**

You'll see every payment made, total YTD, and 1099 status.

## 1099 filing

At year-end, Pluvel generates 1099-NEC forms for contractors who received \$600+ during the year.

**Timeline:**

* January — Review contractor data for accuracy
* January 31 — 1099s must be sent to contractors
* January 31 — 1099s must be filed with the IRS

<Info>
  Pluvel handles 1099 generation, contractor delivery, and IRS e-filing. You just review and approve.
</Info>

[Learn more about 1099 filing →](/features/payroll/1099)

## W-9 compliance

Track W-9 status for all contractors:

| Status   | Meaning                       |
| -------- | ----------------------------- |
| Complete | W-9 on file, tax ID verified  |
| Pending  | Requested but not received    |
| Missing  | Not yet requested             |
| Expired  | Information may need updating |

Don't pay contractors without a W-9 — you'll need it for 1099 filing.

## FAQ

<AccordionGroup>
  <Accordion title="Do I withhold taxes from contractor payments?">
    Generally no. Contractors handle their own taxes. The exception is backup withholding (24%) if they haven't provided a valid TIN.
  </Accordion>

  <Accordion title="When do I need to issue a 1099?">
    Issue a 1099-NEC if you paid a contractor \$600 or more during the calendar year for services. This doesn't apply to payments made to corporations (except attorneys).
  </Accordion>

  <Accordion title="Can I pay contractors more frequently than employees?">
    Yes. Pay contractors whenever invoiced — there's no set schedule. Many businesses pay contractors within 15-30 days of invoice.
  </Accordion>

  <Accordion title="What if a contractor refuses to provide a W-9?">
    You're required to report payments over \$600. Without a W-9, you may need to apply backup withholding (24%) and report with "Applied For" as the TIN.
  </Accordion>
</AccordionGroup>

## What's next

<CardGroup cols={2}>
  <Card title="Learn about 1099s" icon="file-lines" href="/features/payroll/1099">
    Understand 1099 requirements and filing.
  </Card>

  <Card title="Add employees" icon="user-plus" href="/guides/payroll/add-employee">
    Set up W-2 employees for payroll.
  </Card>
</CardGroup>