9 Best Payroll Software For 1099 Employees

Payroll software helps streamline various organizational and administrative functions, including accurate compensation processing, compliance with legal regulations, and more. While the basics of these operations remain the same, the intricacies and execution vary depending on the business type, nature of employment, and other specifications.

1099 contractors, for instance, handle their own taxes, requiring a different approach to payroll management. The term '1099 employees' or '1099 contractors' comes from Internal Revenue Service (IRS) Form 1099, which businesses use to report payments made to independent contractors. Unlike W-2 employees, who have taxes withheld from their paychecks by employers, 1099 contractors are responsible for managing their own taxes, including income tax, Social Security, and Medicare.

The best payroll software for 1099 employees simplifies the payment process, automates tax form generation, and offers flexibility to accommodate varying payment schedules. Given these requirements, we have compiled a list of the best payroll software for 1099 employees so you can streamline finances as efficiently as possible. Keep reading to learn more!

Top 9 Best Payroll Software For 1099 Employees

Here is a list of the top nine payroll software solutions for 1099 employees, selected based on various factors that will be discussed later in this blog:

Buddy Punch Time Clock

QuickBooks Payroll

Comparison Table

Company	Best for	Main Features	Pricing
Gusto HR	Full-service payroll Federal law compliance	Talent management Detailed analytics and reporting Comprehensive time and attendance tracking	Multiple pricing plans, starting from $49/month + $6/employee/month
ADP Workforce Now	Automated tax calculations Accurate payroll processing	Benefits administration Talent acquisition Central platform for various HR operations	Contact us for the pricing
OnPay	Quick payroll processing Built-in reporting	Employee self-service portal Compliance management Advanced onboarding	Starting from $49/month + $6/employee/month
Eddy HR	Integrated platform for multiple tasks Efficient payroll processing	Comprehensive employee hiring and onboarding Accurate time and applicant tracking Effective payroll management Workforce documents can be accessed easily	Multiple pricing plans starting from $50/month + $4/employee/month
Paycor	Helps drive engagement and boost productivity Facilitates background screening	Talent acquisition and management Comprehensive onboarding functionality CV parsing	Get in touch for pricing
BambooHR	Manage workforce data efficiently Automates payroll and wage calculations	Employee onboarding and offboarding Performance management Paid time off (PTO) tracking	Get a custom price
Paychex Flex	Human capital management (HCM) Accurate time and attendance	Workforce and talent management Employee self-service Streamlines HR operations	Contact us for a custom quote
Buddy Punch Time Clock	Employee scheduling and time tracking Simplifies payroll	Geofencing PTO tracking Photos on punch Detailed analytics and reporting	Multiple pricing plans, starting from $19/month + 4.49/user/month
QuickBooks Payroll	Self-setup functionality for contractors Next-day direct deposit	Unlimited 1099s Full-service payroll Employee financial portal	Multiple plans for contractors, starting from $15/month

Gusto HR

One of the most essential human resources (HR) tasks is automating payroll processing, direct deposits, tax filings, and ensuring timely payments. Gusto HR is equipped for all such functionalities and more. It is tailored to serve small and medium-sized businesses and freelance contractors to help them manage their intricate remuneration tasks. The software is easy to navigate, and its intuitiveness streamlines operations across the board, saving time and labor.

For businesses working with 1099 contractors, Gusto streamlines the entire payment process. It enables businesses to quickly add contractors, set up recurring or one-time payments, and send funds via direct deposit. The software also automatically generates and files 1099 forms, reducing year-end administrative hassle and ensuring compliance with IRS regulations.

Top Features

Gusto HR is equipped with comprehensive time-tracking functionality, which helps track employees' clock-in and clock-out periods. This further facilitates accurate payroll calculation and lessens the chances of human errors. Additionally, the platform allows users to customize their reports, which further helps produce accurate results.

Pros

Helps comply with labor and wage laws
Comprehensive employee onboarding
Efficient reports customization

Cons

Customer support can be improved
Lacks a detailed breakdown of different types of hours worked

Pricing

The platform offers varying pricing plans catering to the requirements of different organizations. These include Simple ($49/month + $6/employee/month), Plus ($80/month + $12/employee/month), and Premium ($180/month + $22/employee/month).

Disclaimer: The pricing is subject to change.

ADP Workforce Now

The corporate world is progressing at a fast pace, and to keep up with the ever-changing trends, it is essential to be equipped with the latest and most technologically advanced solutions. ADP Workforce Now is one such software that leverages extensive insights to streamline HR functions and payroll processing.

When it comes to managing 1099 workers, ADP offers flexible payment schedules and simplified onboarding for contractors. It allows users to process payments accurately and timely and generate 1099-NEC forms.

Top Features

Besides providing an efficient applicant tracking system (ATS), ADP Workforce Now also facilitates recruiters and contractors to post jobs across multiple job boards. Additionally, users can create customized job postings to attract well-qualified candidates and simplify the hiring process.

Pros

Extensive features to streamline HR operations
Comprehensive reports customization
Efficient payroll management

Cons

The time-off feature can be improved
Time off balances sometimes display minor glitches or inaccuracies

Pricing

The software offers multiple pricing plans, including Select, Plus, and Premium. Available at custom pricing, these plans cater to the diverse requirements of organizations of different sizes.

OnPay

OnPay is a cloud-based payroll and HR software suitable for small businesses that need a straightforward, affordable solution. It offers full-service payroll, tax filing, benefits administration, and basic HR tools like onboarding and document storage.

When it comes to handling 1099 contractors, OnPay Payroll offers dedicated features that make setup and payments simple. Using the software, businesses can pay contractors via direct deposit or check, keep accurate payment records, and automatically generate e-file 1099-NEC forms at the end of the year. Furthermore, OnPay's contractor support ensures businesses stay compliant with tax laws while minimizing manual admin work.

Top Features

The software provides a customizable self-service portal that employees can individually access and manage. Moreover, its built-in reporting system helps managers make data-driven decisions.

Pros

Setting up special payrolls is quick and straightforward
Offers a wide range of in-depth reports, useful for monitoring labor trends
The dashboard simplifies navigation and makes the system easy to use

Cons

Supports only a small selection of time-tracking service integrations
Lacks an option for fully automated payroll processing

Pricing

OnPay’s pricing starts at $49/month + $6/employee/month.

Disclaimer: The pricing is subject to change.

Eddy HR

Organizing workforce data is vital to improving workforce performance as it creates hurdles for the employees and the administrative team. Eddy HR provides swift access to users' profiles, experience, and performance reviews. It is also helpful in auditing and compliance with the law. The software centralizes key functions like hiring, onboarding, document management, and payroll, with a special focus on user experience.

When managing 1099 contractors, Eddy offers an efficient way to onboard and pay them while keeping contractor data organized. It supports accurate payment processing and tax documentation, and generates 1099 forms automatically. The software helps companies ensure contractors are paid promptly and in compliance with IRS requirements, without creating additional workload.

Top Features

The platform can be integrated with various job boards that help recruiters hire great talent from diverse backgrounds. Additionally, it offers accurate applicant and time-tracking services, ensuring smooth payroll processing and saving time and resources.

Pros

Customized onboarding process
Workforce data can be accessed easily
Efficient employees' progress monitoring
Comprehensive payroll management

Cons

The license expiration dates should be provided
The mobile app doesn’t clearly display how much paid time has been clocked each day

Pricing

The software offers multiple pricing plans, including Starter ($50/month + $4/employee/month), Growth ($75/month + $8/employee/month), and Premium (custom pricing).

Disclaimer: The pricing is subject to change.

Paycor

Workforce management is a multifaceted task that needs efficient monitoring – something that cannot be executed without thorough insights. Paycor is tailored to meet these specific requirements and more. It provides a centralized system with detailed analytics about the entire workforce, streamlining administrative operations.

For organizations working with freelancers or consultants, Paycor offers powerful tools to track hours, process payments, and manage 1099 documentation. It allows administrators to customize payment structures and streamline year-end tax form distribution, ensuring compliance and saving time on administrative tasks.

Top Features

The software facilitates comprehensive feedback functionality that helps employers assess their workforce performance. In addition, Paycor is equipped with detailed time management and onboarding functionalities that automate the paperwork associated with the hiring.

Pros

Efficient time management functionality
Regular updates help streamline the workflow
Great customer support
Customizable reporting and analytics

Cons

The mobile app can be made more intuitive
The interface can use an upgrade

Pricing

The vendor offers different pricing plans for small businesses (fewer than 50 employees). These include Basic, Essential, Core, and Complete. All of these plans are available at customized pricing. Companies with more than 50 employees can get personalized pricing plans tailored to their business’s unique needs.

BambooHR

Administrators' and contractors' tasks can often be tedious and time-consuming. The redundancy can be alleviated by incorporating an advanced payroll platform that offers full-suite functionalities. BambooHR is one such solution that is designed to streamline HR operations.

Though BambooHR doesn’t directly handle contractor payroll, its integration with systems like Remote and Deel allows users to manage 1099 payments with ease. This makes it a useful hub for businesses with a mix of employees and contractors.

Top Features

The software simplifies administrative tasks by providing detailed insights that efficiently encapsulate diverse operations, such as CV parsing, hiring, onboarding, and payroll management. Its pre-built integrations further facilitate the contractors' alignment of the platform with other tools, thereby reducing the burden and saving time.

Pros

Customizable employee self-service portal
Helps with detailed background checks
Regular updates help users stay ahead of the curve

Cons

The billing feature needs improvement
The mobile app can be made more intuitive

Pricing

The platform offers different pricing plans for businesses with different requirements. These include Core, Pro, and Elite. All of these plans are available at custom pricing.

Paychex Flex

Hiring candidates for your firm can be laborious and time-consuming, ultimately calling for a software solution that empowers you to unify diverse tasks. This is where Paychex Flex comes in. From security, scalability, CV parsing, talent acquisition, and timely customer support, it provides all functionalities in a user-friendly way.

For companies hiring 1099 contractors, Paychex Flex simplifies the process of issuing payments and managing tax forms. It enables bank transfers or paper checks for contractors, tracks their earnings, and automates 1099-NEC form generation and filing. This reduces administrative overhead and ensures accurate, timely reporting to the IRS.

Top Features

The software helps contractors manage payroll while ensuring law compliance. It also tracks employees' clock-in and clock-out timings, which helps calculate accurate wages. Professional employer organization (PEO) and human capital management (HCM) are other functionalities that help managers wrap up their tasks seamlessly.

Pros

Automated payroll processing to reduce errors
Efficient law and tax compliance
Extensive reporting and analytics

Cons

The feature upgradation processes can be streamlined
Import and export of datasets can be improved

Pricing

The platform offers customized pricing plans depending on your business requirements. These include Select, Pro, and Enterprise.

Buddy Punch Time Clock

Buddy Punch is primarily a time-tracking tool that also offers payroll functionality. It allows employees and contractors to clock in/out using web or mobile apps, providing detailed insights into work hours. The platform also includes scheduling, PTO management, and approval workflows.

The software supports businesses using 1099 workers by accurately tracking hours and exporting data for payroll processing. Furthermore, using Buddy Punch Time Clock, employees can access their 1099s conveniently. Its integrations with platforms like QuickBooks and Gusto make it easy to ensure contractors are paid correctly for their time.

Top Features

The software provides built-in notifications that are helpful for accurately measuring time and other payroll computations. The real-time dashboard and automated timesheets help all users across the board to stay compliant.

Pros

Geofencing functionality enables accurate time-tracking
Automated timesheets reduce mishaps
Customizable workflows enhance work efficiency

Cons

The employee data importing feature can be improved
Submitting multiple timecards requires repeatedly navigating back to the approval page

Pricing

The software offers different pricing plans, including Starter ($19/month + 4.49/user/month), Pro ($19/month + 5.59/user/month), and Enterprise ($19/month + 10.99/user/month).

Disclaimer: The pricing is subject to change.

QuickBooks Payroll

QuickBooks Payroll, part of the larger QuickBooks ecosystem, offers full-service payroll, tax filing, employee benefits, and time-tracking features, all within a user-friendly interface.

The software makes managing 1099 contractors seamless for businesses. It enables them to pay contractors via direct deposit and automatically generate 1099-NEC forms. Additionally, the software stores contractor information securely and syncs seamlessly with accounting data, ensuring smooth bookkeeping and compliance.

Top Features

The software offers self-setup functionality for contractors, making the process easy for them. Furthermore, it supports next-day direct deposit payment, ensuring contractors are paid in a timely manner.

Pros

Easy to access, well-organized, and detailed reports
Allows favorite or frequently used tabs to be pinned for quick access
Can add or remove payroll deductions last minute without updating the employee file

Cons

Reports lack the depth of information some users may need
No auto-sync for timesheets with bank changes or support for job costing

Pricing

The platform offers different pricing plans for businesses managing 1099 employees. These include Contractor Payments ($15/month) and Contractor Payment + Simple Start ($50/month).

Disclaimer: The pricing is subject to change.

How We Selected The Best Payroll Software For 1099 Employees?

Selecting the right payroll software for managing 1099 contractors requires careful evaluation. At Software Finder, our goal was to highlight platforms that simplify contractor payments while ensuring accuracy, legal compliance, and a smooth user experience. This is why we focused on various factors in our selection process. These include:

Criteria Setting

We narrowed down our search by looking up software that specifically catered to 1099 employees. Discerning the varying needs of businesses that opt for varying contracts is essential in determining specific platforms for them, as they often differ from the mainstream ones.

Thorough Evaluation

We analyzed the shortlisted payroll software's basic yet most important features, focusing on payroll processing, onboarding software functionalities, and compliance capabilities. We consolidated our research by delving into user reviews and carefully weighing users' opinions on aspects like interface, navigation, and feature upgrades.

This thorough approach helped us identify the most effective payroll software for freelance contractors and other non-traditional workers.

Scalability

The best payroll tools grow with your business. Therefore, we selected solutions that can easily handle increasing numbers of contractors or expanded payroll needs as companies scale.

Customization

The basic functioning and requirements vary from business to business. Therefore, we selected platforms that can be customized to meet the unique needs of every business.

Ease Of Use

We prioritized software that offers an intuitive interface and straightforward setup, making it easy for businesses to onboard and pay contractors without extensive training.

What Features To Look For In Payroll Software For 1099 Employees?

Certain features are essential for any payroll software, especially when managing contractors. Below are the must-have features you should prioritize.

Law Compliance

Audits, tax filing, deposits, and wage and labor law compliance are some of the most basic and crucial tasks every business must handle. Given how frequently these laws are implemented and followed through, it is vital that payroll software must be equipped with relevant features.

Direct Deposit

We live in a technologically advanced world where almost all businesses deposit wages and salaries electronically. This necessitates payment features in global payroll software that can automate payroll processing and save employers’ time and resources. These functionalities include wire transfers, PayPal, and ACH transfers, in addition to a direct deposit feature.

By scheduling and automating payments on a weekly or monthly basis, administrators can streamline their tasks while saving time and resources.

Analytics And Reporting

Detailed analytics and reporting help monitor the entire workforce data and calculate salaries accordingly. Therefore, extensive analytics is one functionality in payroll software that you should not forsake.

Self-Service Portal

An extensive self-service portal allows contractors to update their payment and tax details, track payments, and manage their accounts. This feature eliminates the need for constant back-and-forth communication, making the payroll process more efficient for both contractors and employers.

Time And Expense Tracking

Some companies pay contractors on an hourly basis or reimbursable expenses system, and an efficient billing and time-tracking feature helps monitor all such activities and more. These capabilities help monitor billable hours and expenses, ensuring transparency and accuracy in payments.

Benefits Of Payroll Software For 1099 Employees

The benefits of payroll software cannot be glossed over. It helps employers in numerous ways, such as:

Payroll software help save time, which is of the utmost importance. Once employers can streamline their basic operations, they can utilize that precious time catering to other tasks
Human errors are inevitable, especially in tasks that need micromanagement. Payroll software alleviates the chances of such errors and improves workflow
Payroll solutions are tailored to provide strict security protocols that protect the entire company and its workforce data
Most payroll platforms are equipped with diverse geofencing functionality that helps employers track their employees' location and working hours effectively

FAQs

What to look for in payroll software for 1099 employees?

Businesses can have different requirements depending on their priorities and the functionalities they lack. Since 1099 employees are not working full-time, they rarely need conventional software. Having said this, employers should look for software that caters to their basic needs. For instance, if most of the freelance employees work on alternate days or have varying working hours throughout the month, employers should choose the platform accordingly.

What is the difference between 1099 and W-2 payroll processing?

1099 payroll involves paying independent contractors, who are responsible for their own taxes. W-2 payroll covers regular employees, and employers must withhold taxes and provide benefits.

Do I need payroll software to pay 1099 contractors?

While not legally required, payroll software simplifies payments, automates 1099-NEC form filing, tracks expenses, and helps avoid compliance issues.

Can I use the same payroll software for both 1099 contractors and W-2 employees?

Yes, many payroll platforms support both contractor and employee payments within the same system, allowing for streamlined processing and reporting.

How do payroll systems handle 1099 tax forms?

Most payroll software will automatically generate and file 1099-NEC forms with the IRS and send them to your contractors at year-end.

Is QuickBooks good for 1099 employees?

QuickBooks is a reliable choice for managing and tracking the financial information of 1099 employees. It eliminates manual data entry and automates various tasks, including budgeting, inventory and time tracking, and bookkeeping.

Does ADP have support for 1099 employees?

Yes, ADP caters to 1099 employees with great speed and accuracy.

9 Best Payroll Software For 1099 Employees

Need Help Deciding