How do I change someone from a subcontractor to an employee or vice-versa in Quickbooks?

The best thing to do in Quickbooks is a new vendor or employee. So if you had a subcontractor named John Smith, but now he's an employee, make an employee named "John J. Smith", or "John Smith - employee". You can change how his name prints on his checks when you enter his information into Quickbooks so what you use for the vendor or employee name won't matter as far as printing checks goes.

Quickbooks forces you to make someone a new vendor or employee instead of just switching them because employee and subcontractor payments need to be tracked separately in the various reports. If you are making a reimbursement payment to an employee, just do it using the employee name already in Quickbooks; reimbursing someone doesn't mean you need to consider them a subcontractor. However, be careful about reimbursing an employee for payments they made to a vendor for services - it could be construed as an attempt to help the vendor avoid reporting income by not making them subject to a 1099 from your business.

More Information: Employee vs. Subcontractor: What’s the Difference & Why You Should Care

Tagged With: 1099 Subcontractors,  Employees,  Quickbooks