Gusto Contractor Payments (2026): Pay 1099 Contractors the Easy Way

Gusto handles contractor payments end to end — it pays your 1099 workers by direct deposit, tracks every payment, and generates and files their 1099-NEC forms automatically at year end. If you only pay contractors and have no W-2 employees, the Contractor Only plan costs $35/month plus $6 per contractor, and the $35 base is free for your first 6 months. I’ve run both employee payroll and contractor-only payouts on Gusto for about three years, and the contractor side is the part I think about least — which is exactly what you want.

This guide covers how contractor payments work, what they cost, how 1099s are handled, and how to pay international contractors.

How Gusto contractor payments work

Adding a contractor takes a few minutes. You enter their name and email, and Gusto sends them a self-onboarding invite where they fill in their own address, tax details (W-9 info), and bank account for direct deposit. You never have to chase a paper W-9 or rekey their routing number.

When it’s time to pay, you have two options:

• One-off payments — pay a contractor a set amount whenever an invoice comes in.
• Recurring payments — schedule the same amount on a regular cadence for ongoing contractors.

Payments run through the same unlimited-payroll engine as employee pay, so there’s no per-run fee no matter how often you pay. Contractors get an email when money is on the way and can see their full payment history in their own Gusto login and the Gusto Wallet app.

What contractor payments cost

The pricing depends on whether you have any W-2 employees.

The Contractor Only plan is the standout: the $35 base is waived for six months, so a business paying, say, four contractors pays only $24/month (4 × $6) during that intro window. There are no separate charges for direct deposit, payment processing, or 1099 filing — they’re all bundled.

If you later hire a W-2 employee, you move up to Simple, Plus, or Premium and keep paying contractors from the same account.

Automatic 1099s at year end

This is the feature that earns its keep every January. Because Gusto records every contractor payment as you make it, it has everything needed to produce 1099-NEC forms automatically. At year end Gusto:

• Generates a 1099-NEC for each contractor who crossed the IRS reporting threshold
• Files the forms with the IRS electronically
• Delivers copies to your contractors through their Gusto account

You don’t tally totals in a spreadsheet or order pre-printed forms. The same full-service tax handling that files W-2s for employees covers 1099s for contractors. For more on what’s included across plans, see my Gusto pricing breakdown.

Paying international contractors

If you work with talent outside the US, Gusto supports international contractor payments in 120+ countries. You can pay overseas contractors in their local currency without setting up foreign bank accounts or wrangling separate wire transfers. The contractor onboards the same way a domestic one does, and payments show up in their Gusto Wallet.

International contractor support is handled as part of the platform rather than a bolted-on service, so the workflow — invite, onboard, pay — is identical whether your contractor is in Ohio or Portugal. Tax forms differ by country, but for US reporting purposes domestic contractors still get their automatic 1099s.

Contractor payments vs. running them off the books

A lot of small businesses start by paying contractors with a personal Venmo or a bank bill-pay and reconciling everything by hand in January. That works until it doesn’t — a missed 1099, a contractor who changed banks, or an IRS notice about an unfiled form.

Putting contractors on Gusto buys you three things: a clean audit trail of who got paid what and when, automatic tax filing that removes the year-end scramble, and a self-service experience your contractors actually like. At $6 per contractor with the base waived for six months, it’s cheap insurance against compliance headaches. If you also have employees, consolidating everyone in one place is worth it on its own — see how the broader platform fits together in my Gusto benefits overview.

How to get Gusto’s best deal

Gusto doesn’t use a typed coupon code. The current offer is a referral link that pays a Visa gift card after your first paid payroll — $100 for businesses with fewer than 10 people, $200 for 10 or more — plus 3 months free on your subscription. Click the referral link before you sign up, create your account, and run one paid payroll (paying a contractor counts) to qualify; the gift card arrives within 30 days of your first paid invoice. Stack that with the Contractor Only plan’s six free months on the base fee and the first stretch is genuinely cheap.

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Frequently asked questions

How much does Gusto charge to pay contractors?

The Contractor Only plan is $35/month plus $6 per contractor, and the $35 base is free for your first six months. If you also have W-2 employees, you’ll be on Simple, Plus, or Premium and pay $6 per paid contractor on top of your plan. Direct deposit and 1099 filing are included at no extra charge.

Does Gusto file 1099s automatically?

Yes. Gusto generates 1099-NEC forms for qualifying contractors, files them electronically with the IRS, and delivers copies to your contractors through their Gusto accounts — all included in your subscription.

Can I pay contractors and employees in the same Gusto account?

Yes. On the Simple, Plus, or Premium plans you can pay both W-2 employees and 1099 contractors from one account, with the right tax forms generated for each. You don’t need a separate contractor subscription.

Can Gusto pay international contractors?

Yes. Gusto supports contractor payments in 120+ countries, paying overseas contractors in their local currency. They onboard and get paid the same way domestic contractors do.