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 payroll.

This process will ensure that the person is generated both a W-2 and a 1099 if they're paid as both an employee and contractor during one calendar year.