How do I reclassify someone as a contractor? They are currently an employee, but this is wrong. They have not yet been paid.

Hello there, kristenczap.

Thank you for reaching out to us. I can help you convert your employees to contractors.

You can create those incorrectly set up employees as a new contractor. However, you'll need to first change each employee's status to Terminated since QuickBooks will not recognize employees and contractors with the same name.

Here's how to set employee as Terminated:

1. Hover your mouse to Employees/ Workers in the left navigation bar.
2. Select Employees.
3. Double-click the employee you want to change status.
4. Click the pencil icon for Employment.
5. Under Status, select Terminated.
6. You may enter the hired and termination date.
7. Click Save.

After which, you may now set up new contractors:

1. Go to Employees/ Workers in the left navigation bar.
2. Select Contractors.
3. Click the Add a contractor button at the upper right side.
4. Enter the Name and Email address.
5. Make sure to check the box to email contractors, so they can complete their profile and get their own account to safely share their personal details.
6. Click Add contractor.

For more detailed steps, just check out the following articles below:

• https://community.intuit.com/articles/1760170.
• https://quickbooks.intuit.com/community/Employees-and-payroll-taxes/How-to-add-edit-and-inactivate-c....
• https://quickbooks.intuit.com/community/Employees-and-payroll-taxes/Invite-a-contractor-to-add-their....

You should be able to change the employees to contractors with the information above. Let me know how things go and if you have other questions by leaving a reply below. I'm always here to answer in any way I can.

Hi, 

I have the same question, but I have inadvertently been paying this subcontractor over the past year, while they have been incorrectly entered in QBO as an Employee. If I follow your steps to convert them to a Subcontractor as they should be, what will happen to all the payments that I have made to them, and are they able to be re-assigned to the Subcontractor once created? 

Thanks!

Gabriel

Thank you for posting here in the Community, @gristone33.

If you re-enter your employees as contractors, both their old and new records will still be available in QBO.

To correct your records and avoid duplication, you'll need to delete the paychecks you've made for your employees. Then, you'll need to re-enter your contractor payments by recording them as expenses or checks. However, you need to seek help from your accountant so they can give you the best advice when it comes to your books.

Here's how to delete a paycheck:

1. In the left panel, click Reports.
2. In the search box, search for Paycheck List.
3. On the Paycheck List Report page, select the checkbox next to the paycheck to remove.
4. Under the Batch Action drop-down, select Delete. You'll see a message asking you if you're sure you want to delete the check.
5. Click Yes to confirm you want to delete it.

Please know that you need to delete the most recent paycheck before you can delete the older paychecks. 

Here's how to record a check or an expense transaction:

1. On the Plus (+) icon, click on Expense or Check.
2. Choose the contractor name and fill in all the necessary information.
3. Click Save and Close.

Please read these articles for more information: 

• Delete a Paycheck
• How to Enter, Edit, or Delete Expenses

If you have other concerns, feel free to leave a comment below. I'll be happy to assist you.

The information that was given didn't work.  There's no option to change the employee status and then terminate the employee.

Hi there, @BigKat5300. 

Thanks for joining this thread. I'm determined to ensure you can change your employee's status.

You may have too much accumulated historical data causing this unusual behavior. Whenever you visit a website, it saves some information from the web page in its cache and cookies. These files allow the websites you visit most often to load faster. Not to worry, clearing them will do the trick.

First, let's try accessing your account through an incognito window to rule out the possibility of a webpage issue. You can refer to these shortcut keys to open an incognito window in all supported browsers:

• Chrome: Ctrl+Shift+N
• Firefox: Ctrl+Shift+P
• Safari: Command+Shift+N

If the option to terminate the employee appears as shown in the screenshot below, switch back to your regular browser. Then, clear its cache. This way, you can access QuickBooks with a clean slate. You can also use a different supported one.

If you don't have paychecks created or pay history added for an employee, you can also delete their profile from your payroll product.

Any time you have questions about employees and payroll, or anything in QuickBooks, you can post them here. I'd be happy to answer. Have a good one!