LLC Tier Members: Payroll functionality — including paying contractors directly through your Collective Dashboard — is currently available only for members on the S Corp tier. If you are on the LLC tier, you can still work with contractors and pay them however you prefer (Zelle, PayPal, Venmo, check, etc.). We recommend sending all contractor payments from your business checking account to keep your bookkeeping clean and your documentation clear. For more information on contractor requirements and tax forms, see "Understanding Independent Contractors."
Onboarding and Managing Contractors at Collective (S Corp Tier Only)
You can easily invite, onboard, and manage your U.S.-based contractors directly through your Collective Dashboard. (Note: Collective Payroll currently supports only U.S.-based contractors. For international contractors, use an external payment platform.)
Go to Payroll > Contractors (1099)
Navigate to the Payroll section in your Collective Dashboard, then scroll to Contractors (1099)
Select "Manage"
This page shows your current contractors and their status (e.g., Invited, Awaiting Approval, Completed).
Add a Contractor
Click Add Contractor, then choose whether you're onboarding an individual or a business.
- Enter the name, pay type (hourly or fixed), and start date.
- Add the contractor's email address and make sure the invitation checkbox is selected.
Send the Invitation
Click Save and Continue to send your contractor an email invitation. They'll be asked to enter their own details (such as SSN/EIN, address, and bank info).
Track the Status
- Contractors will appear as Invited until they complete setup.
- Once they've entered their details, the status changes to Awaiting Approval.
Approve the Contractor
When setup is complete, you'll receive an email prompting you to review and approve the contractor in your dashboard.
- Go to the three-dot menu next to their name and select Approve Onboarding.
Resend or Remove Invitations (if needed)
If your contractor loses their invite, you can click Edit Contractor > Save and Continue to resend it. You can also remove a contractor anytime.
How to Pay Contractors at Collective (S Corp Tier Only)
You can record and send contractor payments directly through your Collective Dashboard. This ensures each contractor's payment history is tracked accurately and reported correctly for their year-end 1099 form. All payments to U.S.-based contractors—whether sent through direct deposit, check, Zelle, or another method—must be recorded in Collective Payroll.
How to Create a Contractor Payment
Go to Payroll > Contractors (1099) Click Pay. You'll see your recent payments (for the last 3, 6, or 12 months).
Select "Create contractor payment" A new window will open where you'll choose a payment date and select contractors to pay.
- Payments made through Collective Payroll use 4 business days for direct deposit.
- To ensure timely payment, schedule before 4 PM Pacific Time to count that same day as a business day.
Choose Contractors to Pay Only contractors who've completed onboarding will appear as eligible for payment.
Enter Payment Details For each contractor, enter:
- Pay type (hourly or fixed)
- Payment amount
- Optional reimbursement (e.g., expense reimbursement)
- Payment method (default is direct deposit, but you can record other methods such as check, Zelle, or Venmo)
Review Payment Summary The system will display:
- Total payment amount
- Breakdown of payment methods (direct deposit, check, etc.)
Even if part of the payment is made outside Collective (like a check), recording it ensures accurate 1099 reporting.
Save and Submit Click Save and Continue, then Submit to confirm payment.
Recording Past (Historical) Payments (S Corp Tier Only)
If you've already paid a contractor outside Collective (e.g., by check or Zelle) and need to record it for 1099 reporting:
- Go to Contractor Payments in the Dashboard > Historical Payments.
- Select the contractor and enter:
- Date paid
- Amount
- Optional reimbursement details
- Click Save and Continue, then Submit.
This ensures all contractor payments are properly tracked, regardless of how they were sent.
What if some contractor payments weren't tracked?
You must record all payments (direct deposit, check, Zelle, Venmo, etc.) in Collective Payroll.
If payments were made previously and not recorded:
- Go to Contractor Payments > Historical Payments
- Enter payment details
- Save and submit
This ensures accurate 1099 filing and year-end reporting.
Sending 1099s to contractors
If your contractor is onboarded and paid via Collective Payroll, and outside payments are recorded in Collective payroll before December 30th, then Collective will issue 1099-NEC to your contractors before January 31 of the following year.
Payment Speed & Processing Timeline
Contractor payments via Collective are on a 4 business day direct deposit schedule.
- Business day cutoff is 4 PM PST.
- Weekends and holidays extend the processing timeline.
Always determine your target deposit date and work backwards to ensure your withdrawal date aligns with your cash flow.
Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining accounting or other financial advice from an appropriate financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.