Square Payroll Contractor FAQs
How do I add my contractors?
Visit Add Independent Contractors to Square Payroll for detailed instructions on how to add contractors.
How do I pay my contractors?
For detailed instructions on how to pay contactors, visit Pay Contractors Through Square Payroll.
How much does it cost to pay contractors through Square Payroll?
The fee for contractors is $5 per contractor paid in a given month. You can pay each contractor as many times as you’d like each month at no extra charge. If you do not pay any contractors within a given month, you will not be charged. You will not be charged the $29 monthly subscription fee if you have not paid a W-2 employee.
What forms do you file for contractors?
At the end of the calendar year we will send copies of Form 1099-NEC to each of your contractors and file this form with the IRS on your behalf. The contractor gross pay for the year will be reported in Box 1 of Form 1099-NEC (nonemployee compensation).
Note: Square Payroll does not file Form 1099-NEC or equivalent forms at the state level. No new hire reports will be filed for contractors. Contact your state agency to understand additional reporting requirements for contractors, if any.
How do I provide my historical contractor information so Square Payroll can generate my Form 1099 for the full year?
You can do this by recording a manual check contractor payment for prior paid wages. For detailed instructions, visit transferring historical contractor payment information. Please ensure that the prior payment history for your contractors is captured within Square Payroll before the end of the year for accurate tax filings.
Learn more about transferring prior payroll history from a previous payroll provider.
Are there features or functionality that you currently do not support?
Currently, Square Payroll for contractors does not:
Generate and file state versions of Form 1099-NEC.
Pay out reimbursements: All contractor payments are recorded in Box 1 of Form 1099-NEC (nonemployee compensation).
Support contractors with withholdings.Learn more here.
Support paying businesses. You must onboard contractors with an SSN. We do not allow you to onboard contractors with an EIN.
Workers Compensation Insurance: Contractor payments will not be sent to our Workers Compensation Insurance partner, AP Intego.
New Hire Reporting: Some states may require new hire reports for contractors. We do not file new hire reports for contractors.
How do I know whether to classify someone from my staff as an employee or contractor?
Learn more about the difference between W-2 employees and 1099 contractors or visit irs.gov for more guidance.