Does anyone know how I can change an individual from a contractor to an employee?

Hello, klkapoor. 

There are two ways to convert a contractor to an employee. Either make the contractor inactive or add a period to the end of his/her name as a contractor and then add as a new employee. This to get around the duplicate name prohibition. 

Here's how: 

1. Sign in to your QuickBooks Online (QBO) account.
2. Click Payroll from the left menu, then select Contractors.
3. Find and select the contractor you want to change.
4. Under the name of the contractor, click the drop-down beside Active and choose Mark as inactive.
5. Then, add him/her as an employee in QBO. 

Once done making the contractor inactive, you can follow this article for more guidance about Changing Employee to Contractor Or Contractor to Employee.

Please note that if your worker has been set up as both an employee and a contractor within the same calendar year, you'll have to provide both a W-2 and 1099 to the worker at the end of the year.

I've got you some of our resources that you may find helpful for you in the future: 

• Create a new hire report
• Pay employees and contractors with direct deposit 

 Let me know how the process goes. Don't forget, if you have any other concerns, I'm always right here to help you. Have a great day!

I have set up an individual as an employee and contractor.

How can I remove them as an employee and keep them as a contractor?

Thanks for joining in this thread, @madmax4.

Let me help you keep someone on your account as a contractor and remove his/her employee profile.

Here's how:

1. From the left navigation, click Payroll.
2. Select Employees.
3. Tap the employee name that was also listed as one of your contractors.
4. Click the Actions dropdown in the upper right corner.
5. Pick Change status.
6. In the Status field, select Terminated. 
7. A prompt will show before you can terminate the employee. After you read it, click Got it.
8. Tick the box of Show employee list only if you don't want to show this name in your accounting records as an employee. 
9. Click Save.

For future use, you might want to prepare your contractor's Federal 1099s in QuickBooks Online, check out this article: Create and file 1099s with QuickBooks Online.

I'm just a reply away if you need any further assistance setting up contractors or employees. Have a good one.