Add and pay US contractors in Gusto (for admins)

We support US-based contractors if they:

Individuals

• Have a valid Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN)
• Are at least 13 years old

Businesses

• Have a valid Federal Employer Identification Number (FEIN)

All US-based contractors need:

• A US work address (for year-end filings)
• A US bank account (for direct deposit)
• No tax or backup withholding required (We do 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.

Need to increase the limit?

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. You can edit or use saved templates anytime.

Learn more about setting up and managing contractor agreements.

To add a US contractor in Gusto and invite them to their account:

1. Sign in to Gusto.
2. Go to People.
3. Click Add person.
4. 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. 
5. 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
6. Choose the United States as the country.
7. Enter a personal email, not a company email.
   • If they already have a Gusto profile with your company or another, use the same email, and they can switch between their profiles.
8. 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.
9. Choose a work address from the dropdown, or Add a new location. 
10. (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.
11. Enter their department, manager (optional), and contract start date.
12. Click Save and continue. 
13. Select pay type (hourly or fixed amount).
14. Click Save and continue.
15. Review the contractor’s details and what happens next.
    • If you’re sending a contractor agreement, add a note (optional).
16. 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 here.
17. 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.
18. 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
      • This option is available if a work address or a work state was entered during onboarding.
19. Click Save and continue.
20. 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.
21. When you’re ready to invite the contractor, 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.

Form W-9 (Taxpayer Identification)

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:

1. Sign in to Gusto.
2. Go to People.
3. Select the contractor’s profile.
4. Under Additional, click Documents.
5. Select Taxpayer Identification (Form W-9).

Year-end contractor forms

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.

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 in Gusto. If you did not send one at the time, or need to refile a new hire report, we can help.

If you added a contractor in Gusto but still need to invite them to their account, or want to manage their other onboarding tasks, go to this article.

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.

If your contractors use Gusto Time Tracking, learn how to sync their hours to payments. 

Make a one-time payment to a US contractor

Send a one-time payment to a US contractor in Gusto:

1. Sign in to Gusto.
2. Go to Pay.
3. On the right, click Pay a US contractor.
4. Select a payment date (today or future).
   • Direct deposit: Available from the default pay date or later. Pays at the same direct deposit speed as employee payroll.
   • Check: You can pay anytime, including past dates. You distribute the checks to your contractor.
   • Historical payments: Used for reporting only (no money moved). Make sure to update the payment method to Historical Payment.
5. Choose the bank account if you have multiple set up.
6. Enter payment details:
   • Hours or bonuses (decimal format, e.g., 1.25 for 1 hr 15 mins)
   • Wages or reimbursements
   • Payment method (click Enter Payment to view or change)
   • Invoice number or N/A (letters or numbers only, up to 25 characters)
   • Memo (optional — click Add Memo to leave a small message with the payment)
7. Click Continue.
8. Review the summary. Click What your company pays for more details.
9. Click Submit payments.

If you paid by check, confirm the amount on a new page, and write the check. When you’re done, click Finish Payment.

You can view or change contractor payments later on the contractor payment page in Gusto.

You can change or cancel some contractor payments in Gusto without contacting support. If you only see the option to cancel, the payment has not been fully processed. You’ll need to cancel and rerun it to make changes.

Important reminders

Before the check date

Returning funds to your company bank account typically takes a few business days.

On or after the check date

We will correct reporting, but you must recover funds directly from the contractor. We cannot get the funds that were deposited or cashed back.

Change or cancel a US contractor payment

To change or cancel a US contractor payment:

1. Sign in to Gusto.
2. Go to Pay.
3. In the top-right corner, click View pay history.
4. Click US contractors.
5. For payments you can adjust without help, you'll see a This payment can still be adjusted tag.
6. Click the payment for the contractor.  
7. Find Adjustments and click Make an adjustment.
8. Tell us what you need to adjust:
   • 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
9. Follow the rest of the prompts.

If you need to correct any other details of this payment, choose Something else and click Contact us so we can walk you through it.

You can record contractor payments made outside of Gusto so they still appear in your records and year-end 1099 forms. This makes sure your contractor’s 1099 reflects all payments made during the year.

Important reminders

• 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 in the same month, you’ll only pay a one-month contractor fee for that contractor.
• You must enter historical payments before our end-of-year deadline in early January. We’ll send reminders as the deadline approaches.
• Historical payments alone will not create filings. We file 1099s only if:
  • Your company has a signed Form 8655 on file, and
  • You’ve processed at least one payment through payroll for a contractor or employee before the end-of-year deadline for entering payments.
• If you add a payment for a previous 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 Form 1099 outside of Gusto.

Add a historical contractor payment

To add a historical contractor payment in Gusto:

1. Sign in to Gusto.
2. Add or rehire the contractor in Gusto if they aren’t already active.
3. Go to Pay.
4. On the right, click Pay US contractors.
5. Choose the payment date. If the date is in the past, change the method to Historical Payment under the Payment method column.
   • This records the payment for tax purposes but does not move money.
6. Next to the contractor’s name, under Total amount, click Enter Payment.
7. Under Payment method, click until it updates to Historical Payment instead of Check or Direct Deposit.
8. Enter details:
   • Hours worked
   • Wages or other earnings
9. Optional: Add a Memo explaining the payment.
10. Click Continue.
11. Review the summary and, if everything looks correct, click Submit payments.

View or adjust a historical contractor payment

To view or adjust a historical contractor payment:

1. Sign in to Gusto.
2. Go to Pay.
3. In the top-right corner, click View pay history.
4. Click US contractors.
5. Select the payday to view, cancel, or adjust the historical payment.

If a contractor moves outside the US, you can update their profile to reflect their new country.

To switch a contractor’s work location from the US to another country:

1. Sign in to Gusto.
2. Go to People. 
3. Click the contractor's name to open their profile.
4. Under Information, click Work.
5. Next to Work, click Edit.
6. Confirm the worker type is contractor and review the other basic details.
7. Select the country where the contractor will work.
8. Click Save and continue. 
9. Complete the onboarding process (you’ve already finished the first five steps).

Direct deposits usually arrive in your team’s bank accounts by 5 pm 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:

1. Check if the payment was submitted on time

To check payment submission timing:

1. Sign in to Gusto.
2. Go to Pay.
3. At the top of the page, click View pay history.
4. Click US contractors.
5. Click the payday link.

If the payment was submitted after the deadline, the deposit will be delayed by one or more business days.

2. Check for requests or issues

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.

3. Verify direct deposit setup

To verify direct deposit setup:

1. 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.
2. Confirm their bank account details are correct.
   • If they updated/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.

4. Check with the bank

Ask the contractor to check their account or contact their bank to see if the deposit is pending.

5. Contact Gusto if needed