How to change an employee to a contractor?

Changing an employee to a contractor is quick and easy and I'd be glad to show you how, lindaleigh33-out.

Before you transition your employee to a contractor, you'll need to change their status from Active to Terminated first. Here's how:

1. Click Payroll in the left panel and choose Employees.
2. Select the employee's name and click the pencil icon beside Employment.
3. Choose Terminated under Status.
   
4. Hit Done.

Once done, you can proceed by adding a contractor with a slightly different name (maybe add the middle initial). You can either use Intuit Smith as the employee and then Intuit L. Smith as the contractor.

I'll be sharing with you this article: How to Add Independent Contractors and Track Them for 1099s in QuickBooks Online. This will provide you more details on how to contractor works in QuickBooks as well as steps to track your expenses.

Keep in touch if you need any more assistance with this or there's something else I can do for you. I've got your back. Have a good day!

Hi, lindaleigh33-out.

Hope you're doing great. I wanted to see how everything is going about changing an employee to a contractor you had yesterday. Was it resolved? Do you need any additional help or clarification? If you do, just let me know. I'd be happy to help you at anytime.

Looking forward to your reply. Have a pleasant day ahead!

So you can't change their status you have to terminate then add them as a contractor? 

Correct, @ashart.

To change an employee to a contractor, you'll need to change the employee's status to Terminated. and vice versa, to change a contractor to an employee, you'll first need to deactivate the contractor then add as an employee.

Let me know if you need anything else, I'm here to help.

if I terminate them, will I have to go back thru all "employee" checks Ive written and reconnect them to the new contractor profile?

Thank you for joining the thread, @AMurph.

 
I’ll make sure to give you the right information about your concern.

After the termination, you’ll need to re-enter the payroll check as a regular check. Thus, paychecks are different from contractors’ checks.

Before you can pay your contractors, you need to set their profiles. 

Add the contractor to QuickBooks as a vendor if you haven't done so:

1. Navigate to the Payroll menu, then click Contractors.
2. Select Add a contractor
3. Enter your contractor’s info, or select the Email this contractor checkbox so they can fill it out.
4. When you're done, select Add contractor.

However, if you want to delete payroll checks, I suggest contacting your accountant for more assistance needed.
 
You can also pay a contractor with a direct deposit. Check this article for your reference.
 

You’ll need to prepare your 1099s during tax season, see the links below:

• Set up contractors and track them for 1099s in QuickBooks.
• Create and file 1099s using QuickBooks Online.

If you require any additional support or if there is anything else I can do for you, please contact me. You can rest assured that I'll be there for you. Wishing you a pleasant day!

I am getting an error that the email is already in use when I try to add the contractor. 

I did not have an option to terminate the employee, I have to mark them inactive. 

Welcome to QuickBooks Community, BHaynes2. 

I'll make sure to walk you through on how to add your contractors seamlessly. I'll also show you how you can have the option to terminate an employee.

The error appears when we try to enter duplicate information from other contractors or employees. If we have set up contractors as employees by accident and they don't have paychecks created or pay history added to their profile, we can delete or make them inactive. I'll show you how:

1. Go to the Payroll menu.
2. Within the Employees tab, select the employee you want to eliminate.
3. Click the Action drop-down arrow and select Delete Employee.
   

To terminate an employee, we can follow the steps below. Please note that terminated employees will no longer be listed on your active payroll list. However, your accounts still have their profile and pay history, which continues to show up on reports.
 

1. Go to the Payroll menu. Then, select Employees.
2. Select your employee. 
3. Click the Action drop-down arrow. Select Change Status.
4. From the Employment details window,  select Terminated in the Status field.

On the other hand, if you've seen the same page below, we can only make your employee inactive since we still need to complete the setup for our payroll and our employee profile and have payroll taxes done within your QBO. Afterward, we'll be able to terminate or delete an employee.

Then, we can refer to this article to learn about adding contractors: Set up contractors and track them for 1099s.

For additional information, feel free to visit these articles. They contain details about handling employee status and payroll.

• Get started with QuickBooks Online Payroll
• Terminate or change your employee's status on the payroll.

Also, we can run some payroll reports to get the information accordingly and set up your contractors correctly:

• Run payroll reports in QuickBooks Online Payroll
• Get answers to your 1099 questions.

There you go. I'm always here if you have additional concerns about managing contractors and employees in QBO. I'll ensure to provide the details and solution you need. Take care and stay safe!

thank you for your instruction for how to change yo9ur employee to a contractor . but in doing so , now no-one can clock their hours of the day through time sheets or workforce.. help . !!

I then need them all to be in a nice little row before payday... eeks!!  signed, Weary workers leader 

I know a way for your contractors to clock in their hours through a timesheet, Getngear.

We can add the contractors as Team Members in QuickBooks Time, allowing them to log in and clock their hours. The steps to complete the process are as follows: 

1. Go to My Team.
2. Select + Add.
3. Enter their information, and select a role.
4. If you'd like an invitation to be sent to the team member(s), enter their email address (es) and/or mobile number(s), and select Email or Text.
5. Select Add Team Member(s).

If you need to add members in bulk, the following article will walk us through the process: Add and manage team members in QuickBooks Time. More information about granting a member permission and allowing them to edit their profile can be found at the same link. 
 

If there's anything else I can do for you, please let me know. I'm always willing to help. Have a wonderful day!

How do i do this on Quickbooks Online? This is after a year of paying multiple contractors while they were miss-categorized as employees. I need to re-categorize them so I can send them their 1099’s. I don’t not want to create issues when I delete employees and add contractors with little tricks like slightly changing their name spelling. They are LLC’s so they need to be the right spelling. Thanks.