I am the owner and paid as an independent contractor for work that I do. It was suggested to me that I take a small salary every month as an employee. How do I set it up

@jill-niedelman-g 

If you're a sole proprietor, you cannot take a salary, you take draws from the SP and make estimated tax payments personally.  If you're an S-Corp, you need to be an employee and pay yourself a "reasonable" salary.  The IRS is quite clear on this.    

Welcome to the Community space, Jill.

I am here to share information on setting up employees and processing payroll in QuickBooks Online (QBO).

I agree with the details shared by Rainflurry that you need to pay yourself using an Owner's draw or Owner's Equity account if your business is a Sole proprietor and need to be added as employee and be paid through payroll if you're an S-Corp. You can follow the steps below if you don't have an Owner's draw or Owner's Equity account.

1. Go to Bank Transactions and select Chart of accounts.
2. Click New, then choose Equity or Owners Equity as the type of account.
3. Fill in important information and click Save, once done.

For the detailed steps on how to pay an owner of sole proprietor, feel free to check this article: Set up and pay an owner's draw.

You can also consider reaching out to your accountant if you need more insights and details about this matter.

Furthermore, you can run payroll reports to better look at your business finances.

Come back to this post if you have other concerns about setting up employees and processing payroll in QBO. I'll be here to lend a hand.

As owner , how do you remove yourself from contractors list and if payments are shown what further action is needed to fix it ?

Please know that you can't directly delete yourself as a contractor, but you can mark your profile as inactive, Impeccable. I'll show the steps below.

1. Go to the Expenses menu, then Contractors.
2. Locate and select your name on the list.
3. Click the dropdown arrow below your profile name.
4. Select Mark as inactive.
   

    

On the other hand, can you please provide a complete notification message indicating the action needed for payment? This way, I can provide an accurate resolution to this matter.

While waiting for your response, the common reason why a payment needs attention is if there's a problem with that transaction. When this happens, you'll receive an email notification about its complete details and how to fix it. I recommend checking your email's Inbox, Spam, or Junk folders to sort this out.

I'm also attaching these resources, which you can gather insights on how you can pay for your contractors in the platform:

• Pay a contractor with a paper check
• Pay a contractor with direct deposit

When you're ready to add more information about the payment or have more concerns about managing your contractors, hit the Reply button. We'll be here to help you.