Pay a US Contractor

Follow these steps to pay a contractor through CleanCloud Payroll:

Go to Settings → Users → Payroll.
Select Contractors from the dropdown menu in the top right.
Click Pay Contractors.
Select a Payment Date.
- The default date shows the earliest payday for checks.
- Payrolls and contractor payments paid via direct deposit have the same processing timeline, usually two business days.
- If you need to pay your team sooner, you can pay with a physical check and distribute it externally.
- Important: Paying on autopilot/recurring payments is not available for contractor payments.

If you choose the default date or any time after that, you can pay by direct deposit or check.
If you select a date before the default date, you can only pay by check.
If the payment has already been made and you're entering it for tax reporting purposes, record it as a Historical Payment.

Select a Payment Method.
Enter the Contractor’s Hours.
- (For help finding contractor hours worked, see here.)
Click Process Payment.

⚠️ Heads up: CleanCloud Payroll will not automatically sync a contractor's hours like it does for W-2 employees.

Cancel a Contractor Payment

Certain contractor payments can be canceled or adjusted in CleanCloud Payroll without needing to contact support.

Go to Settings → Users → Payroll.
Select Contractors from the dropdown menu in the top right.
Next to the contractor, if a payment can still be canceled, there will be a tag letting you know.
- If no tag appears, contact us so we can assist with the next steps.

Reversing before the check date: We’ll return the funds to your bank account within a few business days.
Reversing on or after the check date: We’ll correct the reporting, but you’ll need to recoup all funds (whether issued by direct deposit or check)—banking regulations prevent Gusto from recovering the funds on your behalf.

If you received a bank error or entered wrong bank information for a contractor payment:

Update your contractor's bank information:

✅ Once updated, funds should reach the contractor within 1–3 business days.

If no bank error appears and the payment went through:

If you've already paid a domestic contractor outside of CleanCloud Payroll, you can still record that payment for year-end 1099 reporting.

Historical payments alone do not generate filings.
1099s are only created once your company has:
- A signed 8655 form on file, and
- Submitted at least one live payroll payment (to either a contractor or employee).
Historical payments must be submitted before Gusto's end-of-year deadline for entering prior year information.

The deadline to enter historical contractor payments for the previous year is typically early January.

If a 1099 has already been filed:

✔ You'll need to generate a corrected Form 1099-NEC.

If Gusto didn’t handle tax filings for the previous year:

✔ You'll need to generate and file a new Form 1099 outside of Gusto.

Go to Settings → Users → Payroll.
Select Contractors from the dropdown menu in the top right.
Click Pay Contractors.
Select a Payment Date.
From the Payment Method dropdown, select Historical Payment.
Enter the number of worked hours, wages, or additional earnings that were paid.
Click Process Payment.

Go to Settings → Admin → Payments & Finances → Payroll.
Click on the dropdown menu by Gusto Onboarding Form.
Select Contractor Payments.
Click Open.
To cancel a contractor payment, select the Payment Date, click ⫶ and choose Cancel.