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!
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.