Convert employees and contractors

To convert someone from an employee to contractor, follow these steps: 

  1. Dismiss your employee in Gusto.
    • This will remove the person from future payrolls and future Gusto invoices.
  2. Add the person as a contractor. 
    • They'll only appear on your Gusto invoice during calendar months that you pay them.

To convert someone from a contractor to an employee, follow these steps: 

  1. Make your contractor inactive.
  2. Hire the person as an employee.
    • This will add them to your employee payroll (separate from your contractor payments).
    • If you get an error stating the SSN already exists, check to see if there is alraedy another employee profile with the SSN of the person you are trying to add.

If you've converted teammates mid-year, appropriately accounting for that in Gusto will make sure that the person gets both a W-2 and a 1099 if they're paid as both an employee and contractor during one calendar year. 

If a teammate ends up with multiple Gusto profiles, they can switch between accounts easily, so long as the same personal email is associated with both profiles.