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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

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: 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.