Vendors and Contractors in Payroll

Vendors and contractors are processed in their own step, separate from employees and loan-outs, because they're paid differently: no tax withholding, no standing pay rate, and 1099 reporting instead of a W-2.

Understanding the Separation

Vendor and Contractor Payments

Greenroom recognizes exactly two payee types in this step: vendor and contractor.

Both must already exist as payees (with the Vendor or Contractor type set) and complete onboarding before they can be added to a run. Vendors and contractors are exempt from the I-9 requirement that applies to employees, since I-9 only covers employment eligibility for W-2 workers.

Entering a Payment

Vendors and contractors don't carry a standing pay rate the way employees do — most bill per invoice, so each payment is entered directly on the run as a one-time payment line: a name/description and a dollar amount. There's no separate "percentage-based" or "invoice-matching" payment mode; if you want the invoice number on record, put it in the description.

1099 Reporting

Contractor and vendor payments carry no tax withholding and are reported on a 1099 at year-end. Vendor payments always file as 1099-NEC. A contractor's role determines whether their payments can also use 1099-MISC — most contractor fees file NEC, while royalty-type payments or amounts beyond an advance may file MISC, depending on the role's configuration.

Representatives

Agents, managers, and lawyers are representatives — they attach to a specific employee or loan-out payee, not to a vendor/contractor record of their own. A rep's fee is calculated as a percentage of what the payee they represent earns on the run, so a rep never needs their own line-by-line pay entry; their pay follows automatically from their represented payee's pay.

The Vendors & Contractors step does show a Representatives group, listing one payable row per representative — but that row is derived from the represented payees' pay elsewhere on the run, not a separate payment you enter here.

Child Trust Accounts

Child trust (Coogan) accounts are a statutory allocation for a minor performer — a percentage of their own gross pay routed to a trust account. Because it's a payment direction for the minor's own earnings, not a separate payee, it lives with the minor's entry on the Employees & Loan-outs step, never under Vendors & Contractors.

Best Practices

• Confirm a vendor or contractor payee is fully onboarded (including a W-9 on file) before expecting them to appear as eligible on a run
• Put the invoice number or a clear description on every payment line for your own records — there's no separate invoice-matching field
• Don't look for agents, managers, or child trusts in this step — check Representatives (attached to the payee they represent) or the Employees & Loan-outs step instead
• Review vendor and contractor 1099 bucket (NEC vs. MISC) if the role is configured as MISC-capable, since it affects year-end filing

Common Issues

Next Steps

After configuring vendor payments, continue with Reviewing Payroll to verify all payments, or see Payroll Totals to understand the total breakdown.