Payee Types - Detailed Guide
Comprehensive guide to different payee types and when to use each
Every payee is one of four types — Employee, Loan-out, Contractor, or Vendor. The type you pick drives tax treatment, which payroll step the payee is paid through, and what Greenroom collects during setup, so it's worth getting right at creation — type can't be changed afterward (see Changing Payee Type below).
Comparison overview
| Employee | Loan-out | Contractor | Vendor | |
|---|---|---|---|---|
| Tax form | W-4 | W-9 | W-9 | W-9 |
| Tax ID on file | SSN | EIN | SSN | EIN |
| Federal withholding | Yes, via Check | No | No | No |
| Year-end form | W-2 | 1099 | 1099 | 1099 |
| Paid through | Employees & Loan-outs step | Employees & Loan-outs step | Vendors & Contractors step | Vendors & Contractors step |
| Needs a standing pay rate | Yes | Yes | Yes | No — bills per invoice |
| Work-eligibility document (I-9-style) | Yes | Yes | Yes | No |
Employee
A worker hired directly and paid W-2, with taxes withheld. You control their schedule and how the work gets done.
Setup: The New payee page asks for name, email, and phone; the engagement (union, agreement, job title, department, start date); and one or more pay rates. Date of birth, address, payment method, and the I-9 are collected afterwards — either by a manager finishing setup on the payee's page or by sending the payee a link to do it themselves. See Adding Payees and Payee Onboarding.
Tax ID: SSN, encrypted at rest — but only a manager can enter it directly in Greenroom. A payee completing their own setup never sees an SSN field in their portal; a manager still has to add it on the payee's record for them to become payroll-ready, even if the payee handles every other step themselves. See Tax Information for why.
Withholding: The federal W-4 and any state withholding forms live in Check, Greenroom's payroll provider — Greenroom's own database never stores filing status or withholding allowances. It's optional during setup (skippable, without blocking approval) and a manager picks one of three ways to handle it: send the payee a link to complete it themselves, transcribe the values from a signed paper W-4 the manager physically holds, or skip it for now. See Tax Information for all three paths.
Loan-out
A worker whose services are billed through their own corporation or LLC — Greenroom pays the business, not the individual.
Loan-outs need an EIN — no exceptions
When you add a payee as a Loan-out, Greenroom asks you to confirm they have an EIN, right under the classification cards. If they're a single-member LLC that files under the owner's own Social Security number, the refusal appears inline beside that choice and Create payee is disabled outright, with guidance to add them as an Employee instead — a Loan-out is understood as an employee-type role (performer, stage manager, musician, crew) paid through a corporation, so the fallback is the direct-pay version of the same role, not a Contractor. There's no way to create an EIN-less loan-out.
Setup: The New payee page asks for the business name, a contact person's name, email, phone, that EIN confirmation, the engagement, and pay rates. The EIN itself, business address, payment method, and a signed W-9 come later in setup — articles of incorporation can also be attached but aren't required.
Tax ID: EIN.
Contractor
An individual providing labor or creative services independently — paid gross, with no withholding, and responsible for their own taxes.
Setup: The same as an employee — name, email, phone, engagement, and rates on the New payee page. A signed W-9, tax ID, payment method, and a work-eligibility document are collected later in setup; contractors aren't exempt from that last one, only vendors are.
Tax ID: SSN — Greenroom treats contractors as individuals, not businesses, regardless of how they've structured their own affairs.
Vendor
A business providing goods, rentals, or services billed by invoice, rather than labor.
Setup: The New payee page asks for the business name, a contact person, email, and phone. EIN, address, and a signed W-9 come later. Vendors are the one type exempt from a standing pay rate (they bill per invoice instead) and from the work-eligibility document. A vendor can also be added mid-run, from the Vendors & Contractors step — see Vendors & Contractors.
Tax ID: EIN.
Do all vendors need a W-9?
No. A W-9 is required before anyone can receive a 1099, but many vendors aren't 1099-reportable in the first place — common reasons include billing only for goods or merchandise, being incorporated (a C-corp or S-corp), being a government or tax-exempt entity, or being paid under $600 for the year.
Greenroom has a control for exactly this. On any non-employee payee, the Personal info / Business info card carries a W-9 not required checkbox:
For payees who aren't 1099-reportable — goods only, incorporated, government or tax-exempt. The W-9 stops being a required document, and payments from now on are left off the 1099. Payments already made keep the treatment they had.
Ticking it reveals a Why field, kept on the payee so the exemption is documented if anyone ever asks. The picker suggests four reasons — Goods / merchandise only, Incorporated (C-corp / S-corp), Government / tax-exempt, Under $600 this year — but you can type your own; an accountant's judgement isn't a closed set. Clearing the checkbox clears the reason, so a reason can never sit beside an exemption that isn't in force.
The same control appears when you quick-add an A/P vendor from inside a payroll run, and it defaults to ticked there — a vendor being added mid-run for an invoice is usually one that isn't 1099-reportable.
What ticking it actually does
| Effect | Detail |
|---|---|
| The W-9 stops being required | The row stays on the documents checklist, demoted from required to optional — so you can still upload one voluntarily, which is the safer call anyway. |
| The signing packet says so | The W-9 line reads "W-9 marked not required — [your reason]" rather than showing as outstanding. |
| Payments stop being 1099-routed | Lines calculated from now on carry no 1099 bucket at all, so they don't land on an NEC or MISC form. |
| Nothing already paid changes | Payroll lines on a paid run are immutable history. The exemption is forward-only, on purpose — that's the direction that can't under-report. |
The checkbox isn't offered on employees, and the server refuses it for them if it ever arrives: an employee files a W-4, never a W-9, so their packet already drops it on a stronger ground than a choice anyone made.
Collecting a W-9 anyway is still the safer default even when the exemption applies, since it documents which exemption you relied on. Confirm exempt categories with your accountant rather than assuming.
Which type should I choose?
Greenroom's own in-app guidance sorts by how you're paying someone, not their job title — the same role can be a different type depending on whether they're on payroll, paid through a company, or billing you.
| You're paying for… | Examples | Choose |
|---|---|---|
| Someone performing in or working on the show, paid directly | Actors, stage managers, musicians, crew | Employee (W-2) |
| The same kind of work, paid through their corporation (with an EIN) | Actors, stage managers, musicians, crew | Loan-out |
| An independent creative or professional, hired for a result | Directors, choreographers, designers, casting directors, general managers, attorneys, accountants, consultants | Contractor (1099-NEC) |
| Goods or business services, billed by invoice | Rehearsal studios, equipment rentals, printers, housing | Vendor (accounts payable) |
A loan-out and a contractor can look alike on paper. Use Loan-out for performers and crew paid through a corporation; use Contractor for independent creatives paid for a result. When it's genuinely unclear, check with your general manager.
Worker classification has real tax and legal consequences
Consult a tax or legal advisor if you're uncertain about a classification — the wrong type can mean incorrect withholding, benefits problems, and compliance exposure.
Changing Payee Type
There's no edit action for payee type — once a payee is created as an Employee, Loan-out, Contractor, or Vendor, that type is fixed. If a payee was set up with the wrong type, the fix is to create a new payee record with the correct type and archive the old one rather than trying to convert it in place; see Archiving Payees. Sort this out as early as possible — the further into onboarding or payroll a misclassified payee gets, the more cleanup a correction requires.
One person, two classifications
The same rule covers one person who does two kinds of work. Every engagement on a payee is paid and reported under that payee's single classification — Greenroom can't yet hold one person as both a W-2 employee and a 1099 contractor. The payee's Engagement & union card says so, right under the classification: "Every engagement on this payee is paid and reported this way. To pay this person under a different tax classification, use Add payee to create a separate record — Greenroom cannot yet hold one person as both a W-2 employee and a 1099 contractor." So a stage manager on a W-2 union engagement who is also engaged, separately, as a 1099 contractor is two payee records — one per classification, each with its own engagement and rates. Pay each from the record that matches how that work is paid.
Next Steps
Continue with Adding Payees to create payee records, or see Tax Information for details on tax form requirements.