I am new to QB and wondering how do I set up a contractor in the system

Assuming the Contractor is basically a Vendor who is invoicing you, You'd go to the Vendor tab and add new. 

When they Invoice you, you'll go to +New and add a bill for that Vendor.

Customers are basically the same.  Add them as needed and then when you Create an Invoice you'll do it for those Customers you've done work for.

Hmmm. I don't seem to have the vendor tab? Is that something I need to ask for?

Hi there, @nikki-premiercra.

Let me join in this conversation and help you set up your contractors in QuickBooks Online (QBO).

There are two ways to add your contractors into QuickBooks, you can either go to the Workers tab or Expenses menu. 

Here's how:

From the Workers menu

1. Click Workers and select Contractors.
2. Choose Add a contractor.
3. Enter the contractor's Name.
4. Enter the contractor's Email if you have checked the box that invites a contractor to add their own 1099 tax info.
5. Click Add a contractor and select Add.
6. Choose whether the contractor is an individual or a business, then enter their information.
7. Select Save and close.

From the Expenses menu

1. Select Expenses, then Vendors.
2. Click New vendor.
3. Enter the information needed, then check the box for Track payments for 1099.
4. Select Save and close.

In case you need to edit their information or deactivate their accounts, this article would be a great reference for you: Add, edit and inactivate contractors​​​​​​​ in QBO. 

I'm always here to help if you have any other concerns or questions. Just tag my name in the comment section and I'll get back to you as soon as I can. Have a great weekend.

Here's a quick video on adding Vendors, if the "Contractor" is truly a Vendor as I was thinking.  This would be a Contractor that puts in a new sidewalk or something like that where they are going to Invoice you for their work on a individual projects.

https://quickbooks.intuit.com/learn-support/en-us/help-article/vendor-management/add-vendor-quickboo... 

If you are a Builder/Contractor and you're looking to add Sub-Contractors for a project, then use the instructions that @ReymondO gave you.