How Contractors Are Paid
Understanding Contractor Payments and IRS Guidelines
While it’s common for churches to interact with contractors similarly to employees, it’s important to remember that in the eyes of the IRS, contractors are not employees. To avoid any IRS issues, this article can help determine whether someone should be hired as an employee or qualifies as an independent contractor.
Payment Options for Contractors
If you decide to move forward with a contractor status, we offer two methods for paying them:
- One-time payments upon completion of work – This is the most common option and is done by submitting a check request or invoice through your church support form.
- Recurring payments on a set schedule – This allows for more predictable pay dates, but since contractors are not employees, we cannot guarantee the deposit will land on an exact date. Payments may process slightly earlier or later due to banking factors.
Regardless of the payment method chosen, we cannot ensure exact pay dates like we do for church payroll. If you select option 1, the payment request follows our standard payment turnaround times for your church.
W-9 and 1099 Requirements
Any contractor who will receive more than $600 in a calendar year must have a W-9 on file to ensure we can issue a 1099 at year-end (see related articles below).
Issuing a 1099 in this situation is required by law.
Please note, if the calendar year ends and we have not received a W-9 from a vendor who requires a 1099, the church will be responsible for manually submitting the 1099 info to the IRS.