Whether you’re a freelancer or a business managing contractors, having the right 1099 payroll software can save time, reduce errors, and simplify financial management.

In this guide, we explore the top 7 payroll software options tailored for independent contractors and small business owners.

Benefits of 1099 Payroll Software

Before diving into our list, let’s explore why using payroll software for 1099 employees is essential:

• Automated Tax Calculations: Reduces errors by automatically calculating taxes and generating necessary tax forms.
• Direct Deposit: Enables seamless payment transfers to contractors’ bank accounts.
• Employee Self-Onboarding: Simplifies the process by allowing independent contractors to input their details.
• Multi-State Tax Handling: Ensures compliance for businesses operating across different states.
• Integration with Accounting Software: Syncs payroll data with accounting tools like QuickBooks.
• Time-Saving & Cost-Effective: Automates payroll tasks, reducing administrative workload and costs.

7 Best Payroll Software for Independent Contractors

Gusto

Gusto is one of the most user-friendly payroll solutions, designed with small businesses and independent contractors in mind. It offers features such as direct deposit, automatic tax calculations, and seamless integration with accounting tools. Gusto also provides health benefits administration, making it a comprehensive solution.

Key Features:

• Automatic tax calculations
• Direct deposit
• Contractor self-onboarding
• Multi-state payroll support
• Integration with QuickBooks and Xero

Best For: Small businesses and freelancers who need an easy-to-use payroll system with additional benefits options.

QuickBooks Payroll

QuickBooks is a trusted name in accounting, and its payroll system makes handling contractor payments effortless. It allows businesses to track and pay 1099 employees with features like automatic tax filings and multiple payment options. It seamlessly integrates with QuickBooks’ accounting software for streamlined bookkeeping.

Key Features:

• Direct deposit and paper check options
• 1099 contractor payment tracking
• Automated tax filings
• Integration with QuickBooks accounting software

Best For: Small businesses using QuickBooks for accounting who want a seamless payroll solution.

Wave

Wave is a free payroll software option that caters to small business owners and independent contractors. While its payroll features are more limited than premium software, it provides essential tools such as direct deposit and tax calculation support.

Key Features:

• Free payroll software with essential features
• Automated tax calculations
• Direct deposit option
• Integrates with Wave Accounting

Best For: Small businesses looking for a budget-friendly payroll solution.

ZenPayroll (Gusto)

ZenPayroll, now known as Gusto, is a cloud-based payroll system that simplifies contractor payments. With its intuitive interface and automation features, it reduces manual payroll processing. The software also supports multiple state tax compliance.

Key Features:

• Automated tax calculations
• Direct deposit payments
• Supports multiple state tax laws
• Integration with major accounting platforms

Best For: Small businesses needing a user-friendly payroll system with automation.

Patriot Software

Patriot Software is an affordable payroll service that caters to independent contractors and small businesses. It provides automated tax filings, direct deposit, and robust compliance tools. The software also offers a DIY payroll option for businesses looking for a more hands-on approach.

Key Features:

• Automated tax filing and calculations
• Contractor and employee payment support
• Affordable pricing
• Accounting software integration

Best For: Small businesses looking for a cost-effective payroll solution with reliable automation.

ADP

ADP is a well-known payroll provider that offers robust solutions for businesses of all sizes. It provides features like automated tax compliance, contractor payments, and HR tools. While ADP is more expensive than some competitors, it provides comprehensive services, making it a great option for businesses that require full-service payroll and HR support.

Key Features:

• Direct deposit and contractor payments
• Automated tax compliance
• HR support services
• Multi-state payroll processing

Best For: Growing businesses needing a scalable payroll and HR solution.

Paychex

Paychex is another popular payroll provider that offers comprehensive payroll solutions for independent contractors. It provides direct deposit, tax calculations, and integration with popular accounting software. Paychex also includes HR and compliance tools, making it a strong choice for businesses managing multiple contractors.

Key Features:

• Automated payroll processing
• Direct deposit and tax filings
• HR and compliance features
• Integration with accounting software

Best For: Businesses looking for a payroll service with additional HR tools.

How to Choose the Right Payroll Software

When selecting payroll software for independent contractors, consider the following factors:

• Ease of Use: Choose a system that is user-friendly and doesn’t require extensive training.
• Tax Compliance: Ensure the software automatically calculates and files necessary tax forms.
• Integration: If you use accounting software, select a payroll system that integrates seamlessly.
• Cost: Compare pricing plans to find a solution that fits your budget.
• Customer Support: Look for software with reliable customer service in case you need assistance.

Final Thoughts

Managing payroll for independent contractors doesn’t have to be complex. With the right 1099 payroll software, businesses and freelancers can streamline payments, stay compliant with tax regulations, and save time.

Whether you need an affordable option like Wave or a comprehensive solution like ADP, there is a payroll software that fits your needs. Evaluate your requirements and choose the best tool to simplify contractor payroll management!