Managing and Paying 1099 Contractors

Purpose

A 1099 Contractor is an independent contractor you pay through UZIO without tax withholding. Contractors handle their own taxes, and UZIO reports what you pay them as Nonemployee Compensation (Box 1 of Form 1099-NEC). The Manage and Pay Contractors page is where you add contractors, start contractor payrolls, and review each contractor's pay history. Contractor payrolls run separately from your employee pay runs and have their own rules, described below.

Who can do this: Any user whose role includes the Payroll permission. This is usually the Employer Admin, but other admin roles can be granted the same access.

Prerequisites

• Payroll setup is complete, including a verified company bank account. Contractor direct deposits are debited from the same account as employee pay.
• For each contractor: legal name or business name, SSN or EIN, address, pay basis, and bank details if they want direct deposit. Ask for a completed Form W-9 before you enter them.

Adding a contractor

1. Go to Payroll > Manage and Pay Contractors. The list shows:

1. Click Add Contractors and complete the form:

1. Click Save. The contractor appears in the list and can be included in the next contractor payroll.

[Screenshot: Manage and Pay Contractors list with the Add Contractors and Start Contractor Payroll buttons; use demo data]

Deleting a contractor. Actions > Delete removes the contractor permanently ("If you proceed, [name] will be permanently deleted."). Delete is disabled once the contractor has been in an initiated or approved payroll: "Contractor cannot be deleted because their payroll is either initiated or approved." Keep contractors you have paid on the list until year-end reporting is done.

Paying contractors

1. Click Start Contractor Payroll. The button is disabled until at least one contractor exists.
2. On Payroll Input, enter the Pay Date. The screen reminds you to "Approve payroll at least [N] days before the pay date for on time direct deposits", where N is your company's cut-off days (2 by default). Two rules apply:
• A pay date on a weekend or bank holiday means contractors must be paid by check for that run.
• A pay date in the past records a historical payment. "For filing and reporting purposes, the system records payments with past pay dates. Contractors will be switched to check payment; however, system will not initiate check printing process for these payments." Use this to log a payment you already made outside UZIO so it is included in the 1099 total.
3. Click Continue. The pay grid lists your contractors. For each one, enter the compensation amount (for Hourly contractors, the hours and the resulting amount) and confirm the Payment Method (Direct Deposit or Check). Contractors with no bank details can only be paid by check.
4. Continue to Contractors Pay Summary. It shows the Payroll No, Pay Date, Total Check Payment, Total Direct Deposit Payment, and Total Payroll Cost, and states the deadline: to pay by direct deposit on the pay date, approve by 5:30 PM EST on the cut-off date. If the deadline is missed, or the pay date is today, direct deposit is only possible if you approve and wire the funds by 12:00 PM EST; contact UZIO Support for wiring instructions, or pay by check for this run.
5. Click Approve. Read the confirmation: "Please review the contractor payments before approving. Once approved the payment can not be cancelled." If QuickBooks Online is connected, the same screen tells you a journal entry will be created and that you can check the sync status in Payroll History a few minutes later.
6. If anyone is paid by check, the Download Check Stubs prompt opens. Download and print before the pay date. See Printing Employee and Contractor Checks. Historical payments never offer check stubs.

What happens next. UZIO debits the direct deposit total from your company bank account and pays the contractors on the pay date. The run appears in Payroll History as type Contractor, and each contractor's Pay History (from the Actions menu on the list) shows their payments. The amounts accumulate toward the contractor's 1099-NEC for the year.

How contractor pay differs from employee pay

For the employee pay run itself, see Processing a Regular Payroll.

Year-end reporting for contractors

Because nothing is withheld, contractor payments do not appear on your quarterly employee tax filings. Their 1099-NEC reporting depends on two things you control: the SSN or EIN on each contractor record, and the completeness of the payments recorded in UZIO (including historical payments you logged). Check both before December. The process for producing and delivering the 1099-NEC forms is not covered on the Tax Documents and Settings page, which handles W-2s; confirm the 1099 process with UZIO Support before year end.

Common problems

Start Contractor Payroll is disabled

No contractor has been added yet. The screen says: "Please add at least one contractor to start contractor payroll."

I cannot delete a contractor

The contractor has been in an initiated or approved payroll. Their record must stay for reporting. Leave it in place.

A contractor was paid the wrong amount

Contractor payrolls cannot be cancelled or voided after approval. Pay the difference in the next contractor payroll, or agree a repayment. If the pay date has not arrived and the deposit must be stopped, call UZIO Support immediately.

The contractor needs a check but the run is already approved

Open the run in Payroll History and use Download Check Stubs before the pay date. After the pay date, contact UZIO Support.

Still stuck?

To stop a contractor payment before the pay date, get a check PDF after the pay date, or confirm the 1099-NEC process, please reach out to us at support@uzio.com or call +1-571-601-1752. Include your company name, the Payroll No, the pay date, and the contractor's name. Do not send SSNs or bank account numbers by email.

Related articles

• Processing a Regular Payroll
• Printing Employee and Contractor Checks
• Reviewing Past Payrolls and Requesting a Void (Payroll History)
• Year-End W-2s and Tax Documents
• Setting Up the General Ledger and Exporting Payroll Journal Entries: contractor pay types