Available to Basic Payroll, Full Service Payroll

If you pay 1099 contract workers, you may want the convenience of paying contractors through payroll, even though they are not W-2 employees. For more info about the difference between contractors and employees, see our blog article Independent Contractor vs. Employee Classification.

You can either run a payroll with your employees, or pay contractors only.

💡 Did you know? Patriot will also electronically file Full Service Customers’ 1099s at no additional charge. If you are a Basic Payroll customer, Patriot can e-file your 1099s for a nominal fee. See “Electronically Filing Your 1099s,” for more information.

Before Paying Contractors Through Payroll

Add the contractor by going to Payroll > 1099 Contractors > Add Contractor.
1. See Adding and Editing Contractors. Your contractor record will have create year-end 1099 NEC/MISC.
Enter the 1099 Type and their FEIN or Social Security/Individual Taxpayer ID number
If you have Patriot’s Accounting Software, be sure the “Pay this contractor in payroll” box is checked on their record. If you have payroll only, you won’t see this box.
Before adding direct deposit banking information, ensure your company’s direct deposit application is approved. Navigate to Payroll Dashboard > Settings > Payment Settings > Direct Deposit Settings to submit the application. You will need your Federal Employer Identification Number (FEIN), beneficial ownership information, a recent bank statement, and the business owner’s personal details (e.g., full legal name, home address, Social Security Number, date of birth, and a government-issued ID). Approval typically takes 1–3 business days, and you will receive an email notification upon approval.
Add direct deposit banking info for the contractor, if you are paying with direct deposit. See Adding Contractor Direct Deposit.

If you are paying contractors with direct deposit, your direct deposit deadline is the same for both employees and contractors. See Direct Deposit Funding and Timing Options for more details.

How to Pay Contractors with Employee Payroll

Go to Payroll > Run a New Payroll
Enter your employee payroll information on Step 1.
At the bottom of Step 1, check “I also want to pay 1099 Contractors on this pay run.”
Click Continue to Contractors. This will bring you to a new page with your list of contractors.
Confirm their 1099 Type is correct.
Enter the amount to pay.
If you also have Accounting, select the expense account for each contractor.
Click “Review Payroll” to move to Step 2.
In Step 2, you will see summaries for both employee and contractor payrolls.
Click “View Details” at the top to view each check stub detail.
Click “Approve Payroll” to move to Step 3.
In Step 3, you can print both employee and contractor paper checks and/or pay stubs.

How to Pay Contractors Separate from Employees

From the Payroll Overview page, click “Pay Contractors,
OR

Go to Payroll > 1099 Contractors > Pay Contractors.

This will skip the employee page and bring you to a page with your list of contractors.

Confirm their 1099 Type is correct.
Enter the amount to pay.
If you also have Accounting, select the expense account for each contractor.
Click “Review Payroll” to move to Step 2.
In Step 2, you will see a summary of your contractor payrolls.
- Click “View Details” at the top to view each check stub detail.
Click “Approve Payroll” to move to Step 3.
In Step 3, you can print contractor paper checks and/or pay stubs.

💡 If your direct deposit application is not yet approved, you can pay contractors using paper checks as an alternative. This ensures timely payments while waiting for approval.

Also read, “Voiding a Contractor Payment.”

If you’ve paid contractors outside of Patriot and need to update their history, see Updating Contractor Payment History.