How to Pay 1099 Contractors in QuickBooks Online (2026)

About this video

David, who says he partnered with QuickBooks for the video, demonstrates how to onboard, pay, and file 1099s for contractors in QuickBooks Online. He first compares Workforce tiers: Workforce Payroll, described as the default for most viewers, offers next-day direct deposit; Premium offers same-day direct deposit; and Elite adds $25,000 of payroll tax penalty protection that applies only to W-2 employees, not contractors. For businesses with no W-2 employees, he points to the separate, cheaper QuickBooks Contractor Payments product with the same contractor flow. To onboard, you add a contractor’s name and email under Payroll, check the option to email them to complete their profile, and the contractor follows a free sign-up flow to enter W-9 details including name, business name, Social Security number, and address, electronically sign, and optionally add bank details; the completed W-9 then appears as a downloadable PDF under the contractor’s Documents tab. Before paying, the company bank must be verified, a process he says can take a couple of days. Payments are made through Bulk Pay Contractors by selecting the bank account, amounts, and an expense account such as Contract Labor, with a description for auditing and an optional customer for job costing; he notes Paper Check only records the payment in QuickBooks and does not issue the check. For year-end filing, QuickBooks’ auto-filled forms scan the books and draft 1099s, but a contractor may be excluded if an expense category is not mapped, which he fixes by mapping Contract Labor to Box 1, Nonemployee Compensation. He then reviews, notes QuickBooks files federally and forwards to most states through the IRS combined federal/state program while flagging states needing direct filing, and completes the process with Purchase and E-File.

Key takeaways

• Workforce Payroll provides next-day direct deposit, Premium provides same-day direct deposit, and Elite’s $25,000 tax penalty protection covers only W-2 employees, according to the presenter.
• Contractors can complete their W-9 electronically through an emailed free sign-up flow, and the signed form is stored as a downloadable PDF in QuickBooks.
• Direct deposit requires verifying the company bank account first, which the presenter says can take a couple of days.
• Selecting Paper Check in QuickBooks only records a contractor payment; QuickBooks does not issue the check itself.
• A contractor can be missing from auto-filled 1099s if their expense category is unmapped, which is fixed by mapping it to Box 1, Nonemployee Compensation.

Episode details: published June 1, 2026 · 6:24 long. Summary written by Self Growth Videos from the episode itself. Business results and any income figures mentioned are Kevin Stratvert’s own claims, shared for education — they are not typical or guaranteed.

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