How Contractors Are Paid
While it is very common for churches to interact with contractors just like employees, it is important to note that in the eyes of the IRS, contractors are NOT employees. To avoid any issues with the IRS, this article can be very helpful in determining if the person you are thinking about should be hired as an employee or they truly are an independent contractor.
Should you make the decision that you are going to move forward with the contractor status, we offer two methods for paying contractors:
- A unique amount when work has been completed through sending a check request or invoice submission to myXP via your church support form. For contractors this option is the most common.
- A consistent amount following a specific pay schedule. Please note: while this system allows for a better targeting of paid dates, as contractors are not employees it is not always possible to ensure they payment lands in their account on a specific date/day of the week and can push or pull a bit given a variety of factors.
Regardless of the option chosen, it is not possible for us to perfectly execute against a specific pay date like we do for church payroll. If you choose option 1, the payment request is treated like any payment request for your church and will follow our standard payment turnaround times.
Also please note that all contractors who will receive more than $600 in a calendar year, must have a W9 on file with us to be able to issue a 1099 at the end of the year. (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 W9 from a vendor who requires a 1099, the church will be responsible for manually submitting the 1099 info to the IRS.**