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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.

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Contractor vs Employee

FactorEmployeeContractor
Tax withholdingYou withhold taxesThey pay their own
Tax formsW-21099-NEC
BenefitsOften providedNot provided
ControlYou direct how work is doneThey decide how
EquipmentUsually you provideUsually they provide
Misclassifying employees as contractors can result in IRS penalties, back taxes, and legal issues. When in doubt, consult with an attorney or accountant.

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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

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Add a contractor

1

Go to Payroll

Click Payroll in the sidebar, then Contractors.
2

Click Add Contractor

Click the Add Contractor button.
3

Enter contractor details

  • Name — Individual or business name
  • Email address
  • Phone (optional)
  • Address — Required for 1099 filing
4

Enter tax information

From their W-9:
  • Tax ID type — SSN or EIN
  • Tax ID number
  • Business type — Individual, LLC, Corporation, etc.
5

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)
6

Save

The contractor is ready to receive payments.

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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.

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Pay a contractor

1

Go to Payroll → Pay Contractors

Or click Pay on a contractor’s profile.
2

Select contractors to pay

Check the contractors you’re paying in this batch.
3

Enter payment amounts

For each contractor:
  • Amount — What you’re paying
  • Description — What the payment is for
  • Invoice number (optional) — Reference their invoice
4

Review and confirm

Review the total and payment method for each.
5

Submit

Click Submit Payments. Direct deposits are sent on the specified date.

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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.

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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
Pluvel handles 1099 generation, contractor delivery, and IRS e-filing. You just review and approve.
Learn more about 1099 filing →

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W-9 compliance

Track W-9 status for all contractors:
StatusMeaning
CompleteW-9 on file, tax ID verified
PendingRequested but not received
MissingNot yet requested
ExpiredInformation may need updating
Don’t pay contractors without a W-9 — you’ll need it for 1099 filing.

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FAQ

Generally no. Contractors handle their own taxes. The exception is backup withholding (24%) if they haven’t provided a valid TIN.
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).
Yes. Pay contractors whenever invoiced — there’s no set schedule. Many businesses pay contractors within 15-30 days of invoice.
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.

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What’s next

Learn about 1099s

Understand 1099 requirements and filing.

Add employees

Set up W-2 employees for payroll.