Vendor - 1099 Employees in Enterprise

1099 Employees Vendor Setup

There are two basic types of vendors:

  • "Subcontractors" or 3rd party staffing agencies - In the case of the 3rd party agency, your staffing company pays the agency and that agency is responsible for paying and preparing W2s for the employee. For Information on these click here.
  • "1099 Employees" - In the case of the 1099 employee, your staffing company pays the employee but the employee is responsible for its own 1099.

 In both cases, the client is not responsible for the taxes of the 1099 employee or employees of the 3rd party staffing company.

*Note* Within Enterprise, the difference between 1099 employees and staffing agencies is something called a "Pseudo AIdent." Staffing agencies have one; 1099 employees do not. 


Creating a Vendor

 To create a vendor,  go to 'all options' and select 'vendors': 

 This will bring you to vendor record in Enterprise. Select the '+' icon in the upper right-hand corner to create a new vendor:


This will open the 'Vendor Quick Add' wizard. Below are the required fields for setting up the 1099 employee:

  •  Fill in the 'Company ID' and the 'Full Company Name' with the name of the company. The 'Company ID' has a limit of 15 characters and be used for the employees SSN. For a 1099 employee, the employee's full name should be used for the 'Full Company Name':
               
  •  Company Type List- Select "Vendor" for a 1099 employee.
  • Pay Beginning- This field will prevent cutting any checks to the 1099 employee/vendor until the outlined day.
  • Pay Delay - For a 1099 employee this field should be set to  "0".


  • *Important*  Fill in all addresses, corporate/local/remittance, these will be used in the generation of 1099's. If the local address and remittance address are the same as the corporate address, you can select the 'copy' icon so the local and remittance addresses will fill in automatically. If they are not the same, fill in the local & remittance addresses manually.

 Once all required fields are satisfied, select the 'Save' icon.


 You will now be brought to the 'details' page for the newly created 1099 employee "Vendor" record. 

*Note- A 1099 employee will/must also have an employee record. More on this will be detailed in greater detailed further below

  • For 1099 employees, on the right-hand side under 'government req,' two boxes will be checked: "Is Vendor" and "Generate 1099."

  •  *For independent contractors (1099 employees) only* Do not create a Pseudo Aident.

WARNING: The new vendor will only show in drop-down lists after your login credentials have been refreshed, so either refresh your hierarchy or log out and back in again.


Linking  a 1099 Employee to an Employee Record

Now that a vendor exists, the independent record still needs an employee record. This record will be assigned to orders just like a W2 employee but has visible markers on its employee record as well as its assignments that will help identify its status. Additionally, transactions for this record will experience payroll differently and will be processed through a 'SubPay' Payroll run.

To begin, create an employee record in the same way that you would for a W2 employee. Because the client is not responsible for taxes, the SSN and address are not important. (The SSN will fill in with all 0's.)


Under the 'details' page on the new employee, on the right-hand side, is a field for 'Vendor'. This field will link this employee to the employee record from before. Select the vendor that corresponds to this employee. This is the step that transforms this record from a taxable W2 Employee to a non-taxable 1099 employee.

On the Avatar will appear an icon labelled "Subcontractor."

*Note* If you create an assignment for the 1099 employee without filling in the Vendor field on the employee record, you will create an assignment whose timecard will be for a W2 employee, and you cannot change it back. You will have to close the assignment, link the vendor and then create a new one from a record with the correct information.



Processing Payroll

Processing payroll for 1099 employees and subcontractors will be processed by special payroll runs. They are:

  • SubPay- This payroll run is used for transactions for 1099 employees. Employees will receive a check without any taxes taken out.
  • SubPush- This is a payroll run used to take transactions from employees that are setup as belonging to the third party staffing agency or subcontractor and push them out to the Pseudo AIdent created for the staffing agency. Think of them as pretend checks that will be processed and pushed into subpaycon.
  • Subpaycons- This is a payroll run used after all subpush payroll runs are complete and after the invoicing for the client is complete to create a consolidated check for the subcontractor. It should be made up of all transactions that were pushed with subpush for that staffing company. The checkstub can be viewed on the subcontractor/staffing agencies pseudo AIdent.

When it comes time to process payroll:

For a 1099 employee, process them through a 'SubPay' payroll run type. This payroll run functions similarly to a  normal 'checkrun' payroll run with the exception that it will only pull employees that have non W2- transactions.


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