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: Adding an employee only asks for their name, email, and phone. Everything else — date of birth, address, pay rate, payment method, and the I-9 — gets collected afterward, either by a manager finishing setup on the payee's page or by sending the payee a link to do it themselves. See Payee Onboarding for that process.
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 are completed directly with Check, Greenroom's payroll provider — Greenroom itself never stores filing status or withholding allowances. It's optional to complete during setup (skippable, without blocking approval), but only the payee can fill it in; a manager can't complete it on someone else's behalf.
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. If they're a single-member LLC that files under the owner's own Social Security number, the product blocks the loan-out classification outright, with guidance to add them as a Contractor instead. There's no way to create an EIN-less loan-out.
Setup: Adding a loan-out asks for the business name, a contact person's name, email, phone, and that EIN confirmation. The EIN itself, business address, pay rate, 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: Adding a contractor asks for name, email, and phone, same as an employee. A signed W-9, tax ID, pay rate, 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: Adding a vendor 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.
Tax ID: EIN.
Do all vendors need a W-9?
Greenroom's own guidance (shown when you're choosing a payee type) is that a W-9 is required before anyone can receive a 1099, but many vendors aren't actually 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. Collecting the W-9 anyway is still the safer default, since it documents which exemption applies if the question ever comes up. 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.
Next Steps
Continue with Adding Payees to create payee records, or see Tax Information for details on tax form requirements.