Contractor payment software lets employers send digital payments to independent contractors and freelancers. Businesses use contractor payment software to send non-employee workers payments via direct deposit, paycards, payment processor integrations, or digital wallets. This tool helps companies comply with applicable tax codes and regulations without relying on paper checks, spreadsheets, or other payment software not traditionally designed to pay contractors.
Some contractor payment solutions focus on compensating workers within a single country, often the United States, while others facilitate sending payments internationally using multiple currencies. Companies most likely to use this software include those that rely on contractors—sometimes known as gig workers or 1099 workers—such as in healthcare, hospitality, retail, or construction industries. HR personnel use these platforms to send payments to workers and maintain tax compliance, while contractors can often access funds or track earnings through a portal within the platform.
Companies that employ contractors may also use other software to manage their contingent workforce, including freelancer management systems and contractor management software. Contractor payment software products may integrate with HR software such as core HR software or payroll software.
To qualify for inclusion in the Contractor Payment category, a product must:
Send digital payments to freelance or contract workers independent of regular payroll cycles
Contain a portal for employers to manage transactions
Automate tax compliance, such as 1099 documentation, for contractors and businesses
