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Free Payroll Software For 1099 Employees: Our Top 7 Picks For 2026
13 mins read
Last Updated
By Sadia Tariq and
Often businesses paying 1099 contractors don't use any formal system for documentation. They send the payment, mark the invoice as paid, and that's it. The problem shows up later when you need to file 1099 forms and can't recall if you paid someone once or five times, or what the exact amounts were.
Free payroll software for 1099 employees tracks each payment made to your contractors without adding an expense to your budget. This software keeps records flowing throughout the year, and it generates the required tax forms without adding subscription fees or costs for each contracted person.
We've found seven free payroll platforms that genuinely support 1099 contractor management. You'll find out which one provides forms for free, which one limits the service in their free plan, and which one suits your specific contractor needs and workflows. Here's what we’ve found:
Company | Best For | Main Features | Pricing |
|---|---|---|---|
Found | Freelancers and sole proprietors needing free all-in-one banking and contractor management tool |
| Free Plan |
IRS IRIS Portal | Businesses that only need 1099 filing capabilities and have existing payment/W-9 systems |
| Free Service |
TaxBandits | Growing businesses needing affordable filing with free payroll processing |
| Free payroll; filing starts at $0.80-$2.75/form |
RemoFirst | Startups or global teams managing international contractors on a budget |
| Free Plan |
Patriot Payroll | Small businesses wanting simple, reliable payroll with good support |
| Free Trial |
OnPay | Businesses wanting all-inclusive premium solution with no hidden fees |
| One-month free trial |
Wave Payroll | Small businesses that want integrated accounting and payroll on a budget |
| One-month free trial |
Found is the only platform to combine completely free business banking with contractor management and the automatic generation of the 1099-NEC, with no monthly fees, no minimums, and no hidden costs. For freelancers who also pay subcontractors, Found saves you from having to use separate bank, invoicing, accounting, and payroll tools.
What Makes It Stand Out
- Free Core Features: Business checking account, contractor payments, 1099 generation, W-9 collection, invoicing and bookkeeping, and tax tracking are all free
- Automatic Tax Savings: Calculates and sets aside those estimated taxes from income in real time
- Instant Pay Transfers: Payments between Found users happen instantly with a 1.75% fee applied
- All-In-One Platform: You have banking, expenses, mileage tracking, receipt scanning, invoicing, and contractor management all in one dashboard
Key 1099 Contractor Features
Found automatically generates 1099-NEC forms for any contractor paid $600 or more through the platform. What stood out to us is that the system integrates W-9 collection directly into the payment flow, allowing you to request W-9s anytime or require them before accepting payment. Another thing we noticed is that contractors can choose their payment method (ACH or instant debit transfer) and self-onboard through a secure portal.
It also has full payment tracking features, offering transaction categorization, automatic expense tracking, and real-time bookkeeping with profit and loss reports. Mileage tracking and receipt scanning are included as well.
Pros And Cons Of Found
Pros | Cons |
|---|---|
Transaction and expense reporting (P&L, tax allocation) helps small businesses track finances Invoicing tools and Square integration simplify receivables for contractors and small vendors Linking bank accounts and transferring money is straightforward for many users | Some users report poor or inconsistent customer service Users experienced delayed access to their funds due to account holds |
Free Plan Breakdown
Found's core contractor management features are completely free.
Free tier includes:
- Business debit Mastercard
- Unlimited contractor payments
- Automatic 1099-NEC generation
- Unlimited invoicing (free to send)
- Payment acceptance (credit card, debit, ACH, Venmo, PayPal)
- Expense tracking and categorization
- Real human support via phone, chat, and email
- Receipt scanning and mileage tracking
- Basic bookkeeping
- Bank transfers
Limitations
Found specializes in freelancers and sole proprietors (and single-member LLCs) and is therefore not appropriate for larger businesses or multi-partner business arrangements. Also, it does not include full payroll for W-2 employees.
The IRS IRIS (Information Returns Intake System) is the only fully free, government tool for filing all 1099 forms electronically with the IRS. It's perfect for businesses that only need 1099 filing capabilities and have existing systems in place for payment processing and W-9s.
What Makes It Stand Out
- Free Government Service: There are no charges for unlimited 1099 form filing
- Direct IRS Filing: No third-parties’ involvement, you file directly with the Federal Government
- Comprehensive Form Support: Supports all 1099 series forms (1099-NEC, 1099-MISC, 1099-A, B, C, DIV, G, INT, K, R, S, and more), as well as 1097-BTCs, 1098 series forms, W-2Gs, 3921s, 3922s, and 5498 series forms
- No Form 1096 Required: IRIS eliminates the need for transmittal forms
- Corrections And Extensions: File corrections and request automatic extensions for free
Key 1099 Contractor Features
IRIS is strictly a filing system, not a complete contractor management platform. It accepts 1099-NEC and 1099-MISC forms along with all other 1099 series forms for tax year 2025. You can enter forms manually (one at a time), or you can upload a CSV file (up to 100 forms). The system generates downloadable recipient copies that you print and mail yourself.
The form-generation capabilities of the system caught our attention; once data is entered via the webform or uploaded via a CSV template, it becomes a real 1099 form, and once submitted, you generally receive acknowledgment back from IRS within 24-48 hours.
Another thing that stood out to us is that IRIS supports two e-filing options: Taxpayer Portal (up to 100 forms/upload) or A2A method for bulk filing (up to 100 MB at a time, handling thousands of forms).
Pros And Cons Of IRS IRIS Portal
Pros | Cons |
|---|---|
Completely free and official Eliminates Form 1096 transmittal requirement Direct IRS filing ensures security | 45-day TCC processing time frustrates businesses needing quick access You have to manually print and mail recipient copies yourself, which adds extra steps and time to the process |
Free Plan Breakdown
IRIS is completely free with no paid tiers.
What's included:
- Unlimited form filing for all 1099 series forms
- Manual entry or CSV upload
- Download recipient copies
- E-file corrections and extensions
- State filing through CF/SF program
Limitations
IRIS has no payment processing, W-9 collection, or contractor management features. You must collect W-9s separately before filing.
TaxBandits offers the only free unlimited payroll software for both W-2 employees and 1099 contractors, with transparent pay-per-form filing fees. Although filing is not free, the total price for forms, which is volume-based ($0.70-$2.75/form) makes it affordable for growing businesses.
What Makes It Stand Out
- Free Unlimited Payroll Processing: Run unlimited payrolls for unlimited employees and contractors at zero cost
- Free W-9 Manager: Request and collect unlimited W-9/W-8 forms with AI-powered data extraction
- Volume-Based 1099 Filing: Pricing scales down to $0.80/form for 501-1000 forms
- Comprehensive Integrations: Seamlessly integrates with QuickBooks, Xero, Sage Intacct, Zoho Books, and FreshBooks to import vendor and payment data for 1099 e-filing
- Free Contractor Portal: Employees and contractors can access paystubs, tax forms, and payment history
Key 1099 Contractor Features
TaxBandits supports all major types of 1099 forms (1099-NEC, 1099-MISC, 1099-K, 1099-INT, 1099-DIV, 1099-R, etc.) as well as step-by-step form fill-in and even bulk uploading via CSV or importing directly from your accounting software.
Another feature is e-filing. You can file directly to the IRS or states using either Combined Federal/State Filing (CF/SF) for federal and state, or you can file through Direct State Filing. If you file an original (not an amended) return directly through TaxBandits, corrections are free.
One of the biggest advantages is the built-in W-9 collection system, which offers unlimited W-9/W-8 requests through hosted pages or email. TaxBandits uses AI to extract data from uploaded W-9 forms. There is also an optional TIN Matching service available for only $0.35/TIN.
Pros And Cons Of TaxBandits
Pros | Cons |
|---|---|
Employees and vendors can easily access W-2/1099 forms online Easy account setup and fast filing process for standard returns Users report excellent, fast, and helpful customer support | Some users are uncomfortable with sensitive verification requests (photo ID/selfie) A reviewer reported UI and API bugs that required support intervention |
Free Plan Breakdown
TaxBandits’ free plan includes the essential tools needed to manage 1099 and employee payroll efficiently.
Free payroll software includes:
- Unlimited payroll runs
- Unlimited employees and contractors
- Automated accurate tax calculations
- Paystub generation
- Comprehensive payroll reports
- Secure employee/contractor portal
- W-4 and W-9 collection
- Retirement benefits management
- Document storage
- Client management
- Address book
Limitations
While payroll processing is free, you have to pay/form for 1099/W-2 e-filing. This is transparent but adds cost.
RemoFirst is the only platform providing completely free contractor management for unlimited contractors around the world, with optional payment processing for only $25/contractor/month (the lowest payment processing fee among most contractor management systems). For startups managing international contractors or companies that handle payments outside the platform, RemoFirst provides unbeatable value.
What Makes It Stand Out
- Free Contractor Management: Unlimited contractors at zero cost with no time limits
- Global Coverage: Manage contractors in 185+ countries (more than any competitor on this list)
- Lowest Payment Processing Fee: It has one of the lowest contractor payment processing fees (versus $49+ for competitors like OnPay)
- No Contracts Or Minimums: Month-to-month with no commitments
- Multi-Currency Support: Pay contractors in local currencies across multiple countries
Key 1099 Contractor Features
RemoFirst handles 1099-NEC forms for U.S.-based contractors with automated generation and e-filing. The platform has automated W-9 collection and verification, along with compliance checks and securely storing documents.
Also, there's a payment tracking system that automates invoicing and can accept payments in various currencies. Users get detailed payroll reports broken down by country and independent contractor classification.
Pros And Cons Of RemoFirst
Pros | Cons |
|---|---|
The platform simplifies hiring across multiple countries without creating local entities Local compliance expertise helps with country-specific rules (visas, terminations) Customers say payroll and document handling are generally accurate and reliable | Some customers experienced invoicing discrepancies and billing mistakes A number of reviewers said support became hard to reach after onboarding |
Free Plan Breakdown
RemoFirst offers a genuinely free tier for contractor management, including:
- Complete contractor management
- Unlimited contractors globally
- Contract generation and storage
- Onboarding support
- Compliance management
- 24/5 customer support
Limitations
The free tier doesn't include payment processing—you have to pay $25/contractor/month for this feature. Additionally, there are no integrations with QuickBooks, Xero, or any other accounting platforms as of now.
Patriot Payroll earns its position with the industry's top-rated customer support and the most affordable base pricing starting at just $17/month. The U.S.-based support team, unlimited payroll runs, and transparent pricing make it a good choice for small businesses that prioritize quality of service.
What Makes It Stand Out
Best Customer Support: Multiple users indicate that it has one of the best customer support teams in the market
- Lowest Base Pricing: $17/month + $4/contractor
- Unlimited Payroll Runs: There are no per-payroll-run fees
- Free Contractor Portal: Contractors can access payment history, tax forms, and update info independently
- U.S.-Based Operations: All support and operations in the United States
- Free Direct Deposit: Two-day processing included at no extra cost
- 50-State Coverage: Full compliance across all U.S. states
Key 1099 Contractor Features
Patriot Payroll supports 1099-NEC, 1099-MISC, and Form 1096 with W-9 details recorded during contractor setup. The platform handles unlimited contractors with no caps.
What we found particularly impressive is the e-filing structure. If you run the Full Service plan, you get free 1099-NEC and 1099-MISC e-filing, which is a major advantage. If you run the Basic Payroll plan, you will pay $20 for the first five forms and $2 for each additional form, with a max of 35 forms. Another benefit is the contractor portal, which is completely free. It provides contractors with multi-factor authentication, the ability to view and edit contact info, access payment history, and view direct deposit details.
It has comprehensive payment tracking with detailed payment history reports and year-to-date reporting. And to further improve its functionality, it integrates with Patriot Accounting for expense tracking by account.
Pros And Cons Of Patriot Payroll
Pros | Cons |
|---|---|
Support is highly praised for being responsive, knowledgeable, and helpful with short wait times Very easy to use — beginners can run payroll with minimal training Payroll timing and pay runs are reliable and predictable | Users find that correcting mistakes often requires voiding the entire payroll instead of editing specific entries Some users mentioned the lack of an auto-payroll option that could run payroll automatically without manual initiation each time |
Freemium Plan Breakdown
Patriot Payroll is not free but offers a 30-day free trial. It has two plans for the payroll service (Basic Payroll plan and Full Service Payroll plan).
Basic Payroll (starts at $17/month + $4/worker) includes:
- Unlimited payroll runs
- Free direct deposit (2-day)
- Customizable payroll
- Free Contractor portal
- Mobile access
- Free 401(k) and workers' comp integration
- Comprehensive reporting
- Free W-2s and 1099 generation
Disclaimer: The pricing is subject to change.
Limitations
The 1099 e-filing isn't free, and it is only available for U.S.-based contractors, with no international support. Moreover, there is no separate contractor plan: You must buy the full payroll plan even if only paying contractors.
OnPay Payroll provides everything at one transparent price. No hidden or tiered pricing options. Their $49/month base plan includes 1099 e-filing (automatic), state support, and all the features that competitors take charge of. It is the best premium option for businesses wanting simplicity in exchange for value.
What Makes It Stand Out
- All-Inclusive Pricing: One plan includes everything—no feature tiers or hidden fees
- 1099 e-Filing: Automatic generation and filing included (no extra charges)
- Free Multi-State Support: No additional fees/state (some competitors charge for this)
- ITIN Support: Can onboard contractors with ITINs (unique feature rare among competitors)
- Lifetime Form Access: Contractors get permanent digital access to all tax forms
Key 1099 Contractor Features
OnPay allows users to auto-generate and electronically file their 1099-NEC and 1099-MISC forms at year-end and automatically processes their federal filings. Contractors can download their own 1099s from their own self-service portal, with lifetime digital access. Again, the automatic generation and e-filing at year-end is part of the service, for no added fee.
It has built-in contractor pay reports with detailed payment history. Furthermore, OnPay integrates with QuickBooks and Xero and includes expense tracking by contractors and year-to-date tracking.
What stood out to us was the ITIN support. OnPay supports contractors with ITIN (Individual Taxpayer Identification Numbers), which most competitors do not. This is an important feature for contractors who are foreign nationals or do not have an SSN.
Pros And Cons Of OnPay
Pros | Cons |
|---|---|
Responsive, knowledgeable customer support — quick to answer and helpful Customers note ongoing improvements that make the system better over time The built-in reports are thorough and meet most user needs without requiring customization | Users cannot permanently dismiss certain compliance reminders, which can be frustrating The initial setup can be slow, drawn-out, and confusing for new users |
Freemium Plan Breakdown
OnPay is not free—it's a premium paid service, but it has a one-month free trial.
Single plan pricing (starts at $49/month base + $6/person) includes:
- Unlimited payroll runs
- All tax filings (federal, state, local)
- W-2s and 1099s included
- Automatic 1099-NEC e-filing (no extra charge)
- Direct deposit (no extra fee)
- Multi-state payroll (no extra fee/state)
- Employee/contractor self-onboarding
- PTO tracking
- HR tools
- QuickBooks/Xero integration
- Time tracking integrations
- Org charts
- Expert support (phone, chat, email)
Disclaimer: The pricing is subject to change.
Limitations
You have to buy the full payroll service even if you are only paying contractors, and there is no global contractor support—it is only for U.S.-based businesses (unlike Gusto or RemoFirst).
Wave Payroll takes the last spot in our list because of its requirement for manual 1099 e-filing (you must file it on your own). The $40/month pricing seems competitive, and the free Wave Accounting integration is valuable, along with the free one-month trial gives new users a risk-free start.
What Makes It Stand Out
- Free accounting integration: Seamlessly integrates with Wave's completely free accounting, invoicing, and receipt scanning software
- Unified platform: Payroll, accounting, invoicing, and payments in one place
- 30-day free trial: Test before committing
- All 50 states covered: As of April 2, 2025, all states supported at one price
Key 1099 Contractor Features
Wave produces 1099-NEC and 1099-MISC forms automatically at the end of the year, which is perfect if you have a simple compliance need for 1099 contractors. It allows an unlimited number of contractors.
However, one major disadvantage to highlight is that Wave does not e-file these forms automatically with the IRS. You will have to download the 1099s and file them manually or pay a third-party to file the forms for you. This marks a significant difference from competitors who include e-filing in their service.
On the positive side, Wave includes a self-service contractor portal, where your contractors can download their forms, which means you don’t have to bother sending them. The payment tracking is good, you receive unlimited direct deposits at no charge, and you get a payment history tracking and automatic journal entries. These payments also automatically sync with Wave Accounting, so your books are updated without repeated data entry.
Pros And Cons Of Wave Payroll
Pros | Cons |
|---|---|
Clean web UI that makes tracking income and expenses easy Fast payment processing reported by some users Users like the ability to manage invoicing, expense tracking, and payroll within a single, integrated platform | Mobile app is limited compared with the web app and can be confusing Lacks a built-in calendar or scheduling feature for payroll/event planning |
Freemium Plan Breakdown
Wave Payroll is not free—it's a paid subscription service, but it offers a one-month free trial.
Payroll pricing ($40/month base + $6/active contractor/employee) plan includes:
- Unlimited payroll runs
- Free unlimited direct deposits
- Automatic tax calculations
- Automatic tax filing for employees (NOT contractors)
- W-2 and 1099-NEC form generation (not e-filing)
- Self-service portal for contractors/employees
- Time-off tracking
- Wave Accounting integration (Wave Accounting is free)
- Priority chat support (Monday-Friday, no phone)
Limitations
There is no automatic 1099 e-filing; you must file it manually.
In short, Found and IRS IRIS Portal are ideal for freelancers or small businesses looking for totally free solutions—choose Found if you want a banking/contractor platform all in one, and if you only need filing capability use the IRS IRIS Portal. TaxBandits works best for growing businesses that want free payroll processing, and can pay a small fee to file for each form.
Patriot Payroll and Gusto can suit companies that plan to grow. Patriot is simple and reliable, with a low monthly cost, while Wave Payroll has strong accounting integration and a unified platform for payroll, invoicing, and payments. RemoFirst works well for global teams. OnPay is still the strongest all-in-one premium option if you want everything bundled into one price with no hidden fees.