Pay your 1099 contractor expenses
Add a contractor's expense bill to Xero and pay it.
Before you start
- Add a 1099 contractor to contacts
- Decide which expense account (from your chart of accounts) you'll use to pay the contractor
Add contractor's bill
- In the Accounts menu, select Purchases.
In the New menu, select Bill.
- In the From field, add the contractor's name.
- In the Account field, select the expense account you'll use to pay the contractor.
- Complete the rest of the bill according to the contractor's invoice.
- Click Approve.
- Under Make a payment, check the Amount Paid and fill out the remaining fields.
- Click Add Payment.
When you pay the contractor, make the payment through a bank account. Xero excludes payments made by credit card or third-party services (eg PayPal) from 1099 forms. It also excludes expense claims.