Learn how to pay your contractors using direct deposit in QuickBooks Online and QuickBooks Desktop Payroll.
You can use QuickBooks Payroll or QuickBooks Contractor Payments to send direct deposit payments to your contractors. If you don't want to use direct deposit, you can also pay your contractors with paper checks.
Here's how to set up and create direct deposits for your contractors using your QuickBooks product.
Tip: You can also use direct deposit to pay open bills with your contractors in QuickBooks Online. This is outside your payroll system. QuickBooks tracks contractor payments for 1099-MISC reporting.
There are fees to use direct deposit. Check your subscription for details.
Check out the video or follow the steps below on how to pay direct deposit to your contractors.
To pay an independent contractor using direct deposit:
Go to Expenses, then select Contractors (Take me there).
Select Pay contractors.
Double-check the Bank account you'll be paying from, and select the Pay date.
Find and select the contractor(s) you'd like to pay.
For Pay method, select Direct deposit.
From the Account ▼ dropdown, select the expense category you use to track contractor payments. Note: If you're not sure what to choose, check with your accountant.
Enter the amount, description, and any other necessary payment info.
Select Preview contractor pay.
Select Submit contractor pay.
Select Done.
Note: You can't have both QuickBooks Contractor Payments and QuickBooks Time at the same time without a payroll subscription. You can subscribe to Premium or Elite Payroll to use both.
Go to Contractors, then select Contractors (Take me there).
Select Pay contractors.
Select the Pay date.
Find and select the contractor(s) you'd like to pay.
For Pay method, select Direct deposit.
From the Category ▼ dropdown, select either Contractor Payment or Contractor Reimbursement. Note: If you're not sure which category to choose, check with your accountant.
When you're ready to pay an independent contractor using direct deposit:
Select Banking, then select Write Checks to start the direct deposit.
Select the Bank Account ▼ dropdown and select the checking account you use to pay contractors.
Select the Pay to the Order of ▼ dropdown and select the contractor.
Select the Date field and enter the date you want to pay the contractor. Important: To pay by direct deposit, the pay date must be at least two business days in the future. If a date is less than two business days in the future, QuickBooks automatically chooses the soonest available date to pay via direct deposit.
Enter the direct deposit amount in the $ field.
Select the Expenses tab and select the related expense account.
Make sure the Pay Online checkbox is checked. Note: If you’ve entered bank account information for your contractor, QuickBooks selects the Online Payment checkbox.
Select Save & Close. This opens the Confirmation and Next Steps window.
Select Send to Intuit to open the Send/Receive window. Note: If you close the window on accident, go to the Employees menu and select Send Payroll Data.
