NEW: Relay Payroll is available by invitation while it's in beta. You can pay both W-2 employees and 1099 contractors from your Relay account.
To add a 1099 contractor in Relay Payroll, enter their W-9 information, name, date of birth, email, work address, and compensation, and choose whether they're an individual or a business. You then pay them by direct deposit or check on your regular payroll. To pay a worker by check, make sure third-party check writing is enabled on the account.
What you'll need
Have these ready before you add a contractor:
The contractor's W-9 information.
Their full name and date of birth.
Their email address.
Their work address.
Their compensation.
Whether they're an individual or a business (their worker type).
FYI: A contractor's W-9 can list a Social Security number (SSN), an ITIN, or an EIN unlike employees, who must have a valid SSN.
How to add a contractor
Open payroll in Relay and go to add a contractor.
Choose whether the contractor is an individual or a business.
Enter the contractor's W-9 information.
Enter their name, date of birth, email, and work address.
Enter their compensation.
Choose how you'll pay them direct deposit or check.
Save the contractor and continue.
Paying by direct deposit vs. check
You can pay a contractor by direct deposit or by check. Contractors are paid on the same schedule and timeline as your regular employee payroll.
If you set a payment date earlier than the earliest available direct-deposit payday, that payment goes out by check.
Adding a contractor sets them up in Relay Payroll. To actually pay them, include them when you run payroll see How to run your first payroll in Relay.
FYI: Deciding whether a worker is a contractor or an employee is your call. Relay can't advise on classification. Please review the IRS guidance on worker classification to decide: (https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee).
If something goes wrong
A couple of things can hold up adding or paying a contractor:
You don't have the contractor's W-9 yet. You need their W-9 information to add and pay them. Gather it first, then finish adding the contractor.
You're not sure whether someone is a contractor or an employee. That's your decision to make, and Relay can't advise on it. Review the IRS guidance on worker classification to decide: (https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee).
Frequently Asked Questions
What's the difference between a contractor and an employee?
That's a classification decision only you can make, and it affects which taxes and forms apply. Relay can't advise on it. Review the IRS guidance on worker classification to decide whether someone is an independent contractor or an employee (https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee).
Can I pay a contractor by check?
Yes. You can pay a contractor by direct deposit or by check. If you set a payment date earlier than the earliest available direct-deposit payday, that payment goes out by check.
Does a contractor need an SSN?
Not necessarily. On their W-9, a contractor can provide an SSN, an ITIN, or an EIN, depending on whether they're an individual or a business. This is different from employees, who must have a valid SSN.
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