This article is for Gusto admins who manage contractor payments and onboarding.
You can add US-based contractors, invite them to onboard, send contracts, and pay them through Gusto. You can use Gusto to pay contractors even if you do not run employee payroll with us.
For non-US contractors, learn how to add and pay international contractors (based outside the US).
Worker classification: We cannot tell you if someone should be a W-2 employee or 1099 contractor. Work with an HR specialist or review Internal Revenue Service (IRS) guidance.
Payment methods: You can pay contractors by direct deposit or check at the same cost. You cannot pay them with prepaid debit cards.
Payment speed: US contractor payments process as fast as your employee payroll.
Compliance: Contractors must meet IRS reporting rules.
Costs: $6, $12, or $22/month per contractor (depending on plan). You only get charged for contractors when you actually pay them. It does not matter how many times you pay them in a month.
Contractor tips and the One Big Beautiful Bill (OBBB): To make sure contractors can claim the new tax deduction, include their tip amounts in their total earnings on the 1099. You can do this by adding a historical payment in Gusto that includes any past payments or tips that have not already been entered. Get additional information about the tip reporting requirements in this article.
Gusto supports US-based contractors who meet the following criteria.
Have a valid Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN)
Are at least 13 years old
Have a valid Federal Employer Identification Number (FEIN)
A US work address (for year-end filings)
A US bank account (for direct deposit)
No tax or backup withholding required (Gusto does not support this)
By default, we limit you to 10 payments per contractor per month. This applies to all plans except the contractor-only plan.
There’s no limit for employee payroll — you can pay employees as often as needed.
Reach out to support if you need to raise your contractor payment limit.
To contact us, sign in to your Gusto account and click the help icon in the top-right corner of the page.
Before you add a contractor in Gusto, review these key topics. They cover legal agreements, tax identification, year-end reporting, and state new hire requirements.
You can create and send agreements for independent US contractors when you add them in Gusto. You can also manage agreements outside the hiring process — edit or use saved templates anytime.
Learn more about setting up and managing contractor agreements.
Contractors complete an electronic W-9 in Gusto. Once signed, the form cannot be edited.
If the contractor does not use Gusto’s W-9, you must keep their signed paper copy.
If a W-9 needs changes, have them fill it out manually and upload it to their Gusto profile.
To view a W-9 in Gusto:
Go to People.
Select the contractor’s profile.
Under Additional, click Documents.
Select Taxpayer Identification (Form W-9).
We file and deliver electronic 1099-NECs to eligible contractors.
Most corporations do not need a 1099-NEC, including LLCs taxed as C or S Corps.
If annual payments are under $600/year, you may not need to file a 1099-NEC.
Learn more about 1099 reporting requirements.
Reach out if you want to pay a contractor in Gusto but do not want us to create or file a 1099-NEC.
To contact us, sign in to your Gusto account and click the help icon in the top-right corner of the page.
Gusto does not support:
1099-MISC or other 1099 types for any agency
Backup withholding (even if it’s required for your contractor)
State-specific contractor withholding
Non-US (international) contractor withholding or reporting
Gusto gives you the option to send a new hire report when you add a new contractor. If you did not send one at that time, or need to refile a new hire report, we can help.
To contact us, sign in to your Gusto account and click the help icon in the top-right corner of the page.
To add a US contractor in Gusto and invite them to their account:
Sign in to Gusto in your web browser.
Go to People.
Click Add person.
Enter their full name and preferred first name. We use the preferred name in communications where a legal first name is not required, like offer letters, onboarding emails, and org charts.
Select worker type:
Individual contractor: An independent worker under contract for a specific project or projects, usually on a short-term basis.
Business contractor: A registered business under contract for a specific project or projects, usually on a short-term basis.
Choose United States as the country.
Enter a personal email, not a company email.
If they already have a Gusto profile with your company or another, use the same email so they can switch between their profiles.
Review onboarding options:
Contract agreement: Available for individual (independent) contractors based in the US. Learn more.
Background check: Available for individual (independent) contractors based in the US. Learn more.
For business contractors, run a background check directly in Checkr.
Choose a work address from the dropdown, or click Add a new location.
(Optional) Enter a job title. Contractors typically work as external consultants or project owners. Make sure the job title reflects the contractor’s scope of work.
Enter their department, manager (optional), and contract start date.
Click Save and continue.
Select pay type (hourly or fixed amount).
Click Save and continue.
Review the contractor’s details and what happens next.
If you’re sending a contractor agreement, add a note (optional).
Click Save and continue to next task.
If you do not continue to the next task, you’ll need to invite the contractor later from People > Onboarding. Learn how to view and complete their onboarding checklists.
Choose if you’d like to:
Invite [name] to self-onboard: Confirm some basic information, and we’ll invite this team member to fill in the rest of their personal, tax, and bank account details themselves.
Onboard [name] on their behalf: You’ll have to enter this team member’s personal, tax, and bank account details yourself. We recommend letting them do it.
If you want them to self-onboard, set up their Gusto features first:
Contact details (e.g., personal email)
Documents — we may automatically create some forms. Add additional individual or team documents or agreements (Plus/Premium plans only).
Time & Attendance — invite them to track time (optional).
New hire reporting — available if a work address or work state was entered during onboarding.
Click Save and continue.
Review the timeline for what happens next.
Clicking Send Invitation will save these dates. You can always change their start date from their profile, and we’ll update the rest automatically.
When you’re ready, click Send Invitation.
You should see the contractor’s onboarding checklist. Plus and Premium customers can add custom tasks.
The contractor will get an email to complete their profile with their SSN/ITIN or EIN, address, and payment info. We’ll let you know when they’re done. They’ll be in the Onboarding tab of the People page until they’ve fully onboarded.
For information about W-9s, 1099-NEC reporting, contractor agreements, and new hire reporting, see What to know before adding a contractor above.
Enter and manage contractor payment information directly in Gusto. Your changes save automatically as you go, so there’s no need to worry about losing your work.
The summary bar at the top updates in real time as you enter data, showing contractors paid, total hours worked, and total payment amount.
Use Filter to narrow the contractor list by department or how recently they’ve been paid. Use Columns to show or hide specific payment fields.
If a field shows N/A, that payment type doesn’t apply to that contractor based on their pay type.
Some cells are locked — this is expected when those values can’t be changed. For example, the Hours field is locked for fixed-rate contractors.
If you accidentally enter a value, clear it before submitting — since changes save automatically, any entered values will be included in the payment run.
In your web browser:
Click the Pay section.
Under More options, click Pay a US contractor.
You’ll land on the Edit payments page (Step 1 of 2), where all your active contractors are listed with editable payment fields.
Enter payment information by clicking into the appropriate field for each contractor. Available fields depend on their pay type:
Hourly contractors: Enter hours (and rate, if applicable).
Fixed-rate contractors: Enter a fixed payment amount.
All contractors: You can also add Bonus, Reimbursements, Invoice, Tips, and a Memo.
Your changes save automatically — a Last saved timestamp at the bottom left of the page confirms everything is up to date.
To import payment data from a CSV file instead, click Import in the top right of the table. See Pay by uploading a CSV file below for more detail.
When you’re ready, click Review summary.
On the Review and submit page (Step 2 of 2), confirm the payment details look correct, then click Submit.
You’ll see a confirmation page with a payment summary. If you need to make any changes, click Cancel one or more payments before the debit date.
In the Gusto mobile app:
Open the Gusto mobile app and sign in.
On the Payroll tab, tap See more options.
Select Pay a US contractor.
All your active contractors are listed with editable payment fields. Enter payment information for a contractor by tapping Edit next to their name. Available fields depend on their pay type:
Hourly contractors: Enter hours (and rate, if applicable).
Fixed-rate contractors: Enter a fixed payment amount.
All contractors: You can also add Bonus, Reimbursements, Invoice, Tips, and a Memo.
Tap Done once you've added a contractor's pay details.
To import payment data from a CSV file instead: Tap the three-dots icon and select Import payment data. See Pay by uploading a CSV file below for more detail.
When you’re ready, tap Review summary.
On the Review and submit page (Step 2 of 2), confirm the payment details look correct, then click Submit.
You’ll see a confirmation page with a payment summary. If you need to make any changes, click Cancel one or more payments before the debit date.
Confirm the payment details look correct, then tap Submit payments.
You’ll see a confirmation page with a payment summary. If you need to make any changes, tap Cancel one or more payments before the debit date.
Quickly upload US contractor payment information using Smart Import. Upload a CSV file and we’ll match your data to your contractors automatically — no reformatting needed.
In your web browser:
Click the Pay section.
Under More options, click Pay a US contractor.
On the Edit payments page, click Import in the top right of the table.
Click Download CSV template to get a pre-filled file with your active contractors already listed, then fill in your payment data.
You can open the template in Google Sheets, fill it out, and export it as a CSV when you’re ready.
Or, create your own CSV file using the column reference in Column descriptions below.
Once your CSV is ready, click Upload, or drop your file into the box.
Depending on how closely your file matches our system, one of two things will happen:
Automatic match: If we can match all your data right away, you’ll go straight to the Review step — no extra steps needed.
Manual match: If we can’t match everything automatically, you’ll be guided through a column matching step, a row matching step, or both, before reaching Review. Once you make a manual match, we’ll remember it for future uploads.
In the Review step, confirm everything looks right, then click Import.
Check the table to confirm your payment data has been applied. If it doesn’t appear right away, wait a moment and refresh the page.
In the Gusto mobile app:
Open your Gusto mobile app and sign in.
On the Payroll tab, tap See more options.
Select Pay a US contractor.
Scroll down to the list of contractors. Tap the three-dots icon and select Import payment data.
Tap Download CSV template to get a pre-filled file with your active contractors already listed, then fill in your payment data.
You can open the template in Google Sheets, fill it out, and export it as a CSV when you’re ready.
Or, create your own CSV file using the column reference in Column descriptions below.
Once your CSV is ready, select Upload and continue.
Depending on how closely your file matches our system, one of two things will happen:
Automatic match: If we can match all your data right away, you’ll go straight to the Review step — no extra steps needed.
Manual match: If we cannot match everything automatically, you’ll be guided through a column matching step, a row matching step, or both, before reaching Review. Once you make a manual match, we’ll remember it for future uploads.
In the Review step, confirm everything looks right, then select Import.
Check the table to confirm your payment data has been applied. If it does not appear right away, wait a moment and refresh the page.
Column headers don’t have to match exactly — Smart Import will try to recognize common variations automatically. If it can’t, you’ll have the option to match them manually.
hours and bonus apply to hourly contractors. fixed_amount applies to fixed-rate contractors. Mixing these will result in an error on review.
Positive numbers only. Decimals are fine.
Each column on the Edit payments page corresponds to a specific payment field. Fields available to each contractor depend on their pay type. If you’re uploading payments via CSV, see the CSV column reference below — CSV column names are different from the on-screen labels.
Contractors: The contractor’s name and, if applicable, their business name.
Rate: The contractor’s pay rate, pulled from their profile. To update their rate, click the contractor’s name to open their profile.
Hours: Hours worked for the payment period. For hourly contractors only. Enter hours as a decimal — for example, 1 hour 15 minutes = 1.25.
Fixed amount: The payment amount for fixed-rate contractors. Shows N/A for hourly contractors.
Bonus: A one-time bonus payment. For hourly contractors only.
Reimbursements: Expense reimbursement amount. Not taxed. Applies to any contractor type.
Invoice: The invoice number associated with the payment. Optional, but recommended for recordkeeping.
Memo: A note on the payment, visible to the contractor. Optional.
Payment method: Defaults to the contractor’s chosen method. Click the dropdown to switch between Direct deposit and Check for this payment.
Total pay: The total payment amount for the contractor, calculated from all applicable fields.
Use these column names when building or formatting your own CSV file. See Pay by uploading a CSV file above for upload instructions.
Column
Descriptions
first_name
Individual contractor’s first name
last_name
Individual contractor’s last name
ssn/ein
Last 4 digits of the contractor’s SSN (individuals) or EIN (businesses). Helps with more accurate matching.
business_name
Business contractor’s company name. If present, the row is treated as a business contractor.
note
Payment memo or note
hours
Hours worked. For hourly contractors only.
fixed_amount
Fixed payment amount. For fixed-rate contractors only.
reimbursement
Reimbursement amount
bonus
Bonus amount. For hourly contractors only.
invoice_number
Invoice number for the payment
You can adjust which columns are visible to focus on what’s most relevant for a given payment run.
To hide a column, click Columns above the table and deselect it.
To show a hidden column, click Columns and reselect it.
Use Filter to narrow the contractor list by department or by how recently a contractor has been paid.
Note: We’re still rolling automated payments for US contractors out. If you do not see it yet, check back in a few weeks.
Create one or more automated payments for your US contractors in Gusto. If your contractors use Gusto to track their time, you still need to manually sync their hours to one-time payments.
Use these steps to set up an automated payment. Once you set it up, we’ll pay your contractors on the schedule you choose.
In your web browser
Go to Pay.
On the right, click Pay a US contractor. If you do not see the option right away, it may be under See more options.
Under Payday, click Set up automated payment.
Select the contractors you’d like to add to the automated payment.
Click Continue.
Give the automated payment a nickname.
Choose your payment frequency — how often you’ll pay the contractors. Choose from:
Every week
Every other week
Twice per month
Monthly
Select the first debit date for the automated payment.
Click Preview paydays to view future pay dates.
Note: Bank debits may not show in your company’s bank account until the day after the future debit date. We still start the bank transaction on the future debit date, so you’ll need to have all the required funds in your bank account on that day.
Click Save and continue.
Enter and review the payment details for each contractor. Click Add Memo to add a note the contractor can see.
Click Continue.
Review the summary and individual payment details. Click Turn on payment.
After you create an automated payment, the system sets it to active. See below to learn how to change this setting or manage other parts of the automated payment.
In the Gusto mobile app
Open the Gusto mobile app and sign in.
On the Payroll tab, tap See more options.
Select Pay a US contractor.
Tap Set up automated payment.
Select the contractors you’d like to add to the automated payment.
Tap Continue.
Give the automated payment a nickname.
Choose your payment frequency — how often you’ll pay the contractors. Choose from:
Every week
Every other week
Twice per month
Monthly
Select the first debit date for the automated payment.
Tap Preview paydays to see future pay dates.
Note: Bank debits may not show in your company’s bank account until the day after the future debit date. We still start the bank transaction on the future debit date, so you’ll need to have all the required funds in your bank account on that day.
Tap Save and continue.
Enter and review the payment details for each contractor. Tap Add Memo to add a note the contractor can see.
Tap Continue.
Review the summary and individual payment details. Tap Turn on payment.
After you set up automated payments, you can view, edit, or delete them at any time.
In your web browser
Go to Pay.
On the right, click Pay a US contractor. If you do not see the option right away, it may be under See more options.
Under Payday, click Set up automated payment. This will take you to already-active automated payments and give you the option to create new ones.
Under the Active column, use the toggle to turn a schedule on or off.
Click the Actions menu (three dots) to:
Edit an automated payment — including who’s included, the debit date, and the payment frequency.
Preview payments.
Delete the automated payment — after deletion, no new payments will be created.
In the Gusto mobile app
Open the Gusto mobile app and sign in.
On the Payroll tab, tap See more options.
Select Pay a US contractor.
Tap Set up automated payment.
Scroll to the right to see the Active column. Use the toggle to turn a schedule on or off.
In the far-right column, tap the Actions menu (three dots) to:
Edit an automated payment — including who’s included, the debit date, and the payment frequency.
Preview payments.
Delete the automated payment — after deletion, no new payments will be created.
We may turn off automated payments if there are issues with your company or contractor’s account. If this happens, we’ll send you an email.
Account verification: We may still be verifying the company or contractor bank account details.
Company bank account issues: Incorrect bank account information or not enough funds in the account.
Contractor or payment issues: Missing or unverified company or contractor information.
You can record contractor payments made outside of Gusto so they still appear in your records and year-end 1099 forms. This helps make sure your contractor’s 1099 reflects all payments made during the year.
We charge the standard monthly contractor fee (based on your plan) in any month you enter a historical payment.
If you add multiple historical payments for the same contractor in one month, you’ll only pay one contractor fee for that month.
You must enter historical payments before our end-of-year deadline in early January. We’ll send reminders as the deadline approaches.
Entering historical payments on their own does not automatically trigger a 1099 filing. We will generate and file a 1099-NEC for historical contractor payments only if your account is considered active for the tax year.
What counts as “active” for 1099 filings?
Before the end-of-year deadline, your company must have processed at least one of the following through Gusto:
A standard contractor payment, or
A regular or off-cycle payroll for W-2 employees
Important: If you run any employee payroll, we consider your account active for filing purposes. In that case, we will generate 1099s for contractors who only have historical payments on file.
Historical payments alone will not create filings unless your account meets the activity requirement above.
We file 1099s only if your company has a signed Form 8655 on file and you met the activity requirement during the tax year.
If you add a payment for a prior year after a 1099 was filed, you must generate a corrected Form 1099-NEC. If we did not file taxes for the prior year, you’ll need to file a new 1099 outside of Gusto.
To record a non-Gusto contractor payment made in the past:
Sign in to Gusto in the web or in the mobile app.
Add or rehire the contractor in Gusto if they aren’t already active.
Go to Pay.
In the mobile app: On the Payroll tab, tap See more options.
Select Pay US contractors.
To record a payment paid before today's date (a historical payment), select Record a non-Gusto payment. Since the date is in the past and the payment has already been made, you can record the payment for tax purposes, but we will not move any money.
If you do not see the button or are using our legacy view, under Payment method for the contractor, select Historical Payment.
Next to the contractor’s name, under Total amount, select Enter Payment.
Enter details:
Hours worked
Wages or other earnings
Optional: Add a Memo explaining the payment.
Select Continue.
Review the summary. If everything looks correct, select Submit payments.
Note: If you’re entering a payment for a prior year and a Form 1099 was already filed, you must generate a corrected 1099-NEC.
In your web browser:
Go to Pay.
In the top-right corner, click View pay history.
Click US contractors.
Select the payday to view, cancel, or adjust the historical payment.
In the Gusto mobile app:
Open the Gusto mobile app and sign in.
On the Payroll tab, tap View pay history.
Select the Contractors tab.
Select the payday to view, cancel, or adjust the historical payment.
You can change or cancel some US contractor payments in Gusto on your own. In some cases, we may need to help. If the payment has not been processed, you will only have the option to cancel. To make changes, you’ll need to cancel and rerun it. If the payment has been processed, but not yet deposited to the contractor’s bank account, you can cancel or change it.
If the contractor has already received the payment
You need to work with them directly to recover the funds. We cannot reverse payments. If you recover funds from a contractor, we’ll update the reporting in Gusto.
Refund timeline
If you cancel a payment, funds are typically returned to your account within a few business days.
Change or cancel a US contractor payment in Gusto
In your web browser:
Go to Pay.
In the top-right corner, click View pay history.
Click US contractors.
For payments you can change without our help, it will say This payment can still be adjusted.
Click the payment for the contractor.
Find Adjustments and click Make an adjustment.
Tell us what you need to change:
A contractor was paid more than once
You need to reverse the payment
A contractor was overpaid or underpaid
The wrong bank account number was entered
We used the wrong payment method (direct deposit vs. check)
Something else (If you choose this option, click Contact us so we can walk you through it)
Follow the rest of the steps.
In the mobile app:
Open the Gusto mobile app and sign in.
In the Payroll tab, tap View pay history.
Select the Contractors tab.
If it's a payment you can change without our help, it will say This payment can still be cancelled.
Tap the pay date.
If the payment can be cancelled, you'll have the option to tap Cancel payment.
If this payment can be adjusted, you'll have the option to tap Make an adjustment.
Tell us what you need to change:
A contractor was paid more than once
You need to reverse the payment
A contractor was overpaid or underpaid
The wrong bank account number was entered
We used the wrong payment method (direct deposit vs. check)
Something else (If you choose this option, click Contact us so we can walk you through it)
Follow the rest of the steps.
Use the sections below to update a contractor’s pay rate or type, or to change their work country if they move outside the US.
To change a contractor’s pay in your web browser:
Go to People.
Click the contractor’s name to view their profile.
Under Information, click Pay.
Next to Compensation, click Edit.
Choose an hourly rate or a fixed rate. If you choose hourly, you'll need to enter the hourly wage amount.
Click Save.
In the Gusto mobile app:
Open the Gusto mobile app and sign in.
Go to People.
Select the contractor's name.
Tap the menu near the top-left of the screen.
Select Pay.
Next to Compensation, tap Edit.
Choose an hourly rate or a fixed rate. If you choose hourly, you'll need to enter the hourly wage amount.
Tap Save.
If a contractor moves outside the US, you can update their profile to reflect their new country.
Note: You cannot change contractors to other worker types. If you do, you’ll get an error.
In your web browser:
Go to People.
Click the contractor’s name to open their profile.
Under Information, click Work.
Next to Work, click Edit.
Confirm the worker type is contractor and review the other basic details.
Select the country where the contractor will work.
Click Save and continue.
Complete the onboarding process (you’ve already finished the first five steps).
In the mobile app:
Open the Gusto mobile app and sign in.
Go to People.
Find the contractor and tap their name.
To filter your team members by worker type, tap the three dots icon. Tap Filter. Scroll down and select the checkbox for Contractor. Tap Apply.
Next to Work, tap Edit.
Tap change worker type or country.
Confirm the worker type is contractor and review the other basic details.
Select the country where the contractor will work.
Tap Save and continue.
Complete the onboarding process (you’ve already finished the first five steps).
Go to a different article to learn how to dismiss or rehire contractors.
Direct deposits usually arrive in your team’s bank accounts by 5pm local time on payday. Team members can view their paystubs in Gusto on the check date but not before. You can print paystubs early if needed.
If you think there’s a delay with a payment, work through these steps:
Go to Pay.
In the mobile app, this is the Payroll tab.
At the top of the page, click View pay history.
Select US contractors.
Select the payday link.
If the payment was submitted after the deadline, the deposit will be delayed by one or more business days.
Look at your Home page to-dos for any requests from Gusto.
If we asked for information, submit it. Payments process within a few business days once we approve.
If we cannot debit funds from your company bank account, we’ll retry before processing. Details will be on your Home page and in your email.
Make sure the contractor’s payment method is set to Direct Deposit. If it’s set to Check, you need to give them a physical check.
Confirm their bank account details are correct.
If they updated or changed their bank account: Check the old account first. If inaccessible, contact us for the ACH trace ID to track the payment. If we can recover the funds, we’ll resend them to the new account (it may take a few days).
If they deleted their bank account: You’ll need to add the new account and reach out to us to resend.
To contact us, sign in to your Gusto account and click the help icon in the top-right corner of the page.
Ask the contractor to check their account or contact their bank to see if the deposit is pending.
Reach out to us if you still cannot confirm the payment status.
To contact us, sign in to your Gusto account and click the help icon in the top-right corner of the page.