Paying Contractors with Gusto 2026
The Contractor-Only Plan, 1099-NEC, and Multi-State Payments
If you pay 1099 contractors but have no W-2 employees, you don't need a full payroll plan. Here's how Gusto's Contractor-Only plan works, what it costs, how the automatic 1099-NEC filing saves your January — and how to get $300 for starting.
| Plan | Who it's for | Cost (2026) | What's included |
|---|---|---|---|
| Contractor-Only 1099 only | Businesses with contractors and no W-2 employees | ~$35/mo + $6 per contractor | ACH payments, 1099-NEC filing, self-onboarding, 120+ countries |
| Full payroll plan | Businesses with W-2 employees (and optionally contractors) | From ~$40/mo + $6 per person | Everything above, plus W-2 payroll, benefits & HR |
Pricing shown is Gusto's 2026 starting rate and changes over time; promotions sometimes waive the base fee for the first several months. Confirm current rates and plan details directly with Gusto before purchasing.
The Contractor-Only plan, and who it's for
Gusto's Contractor-Only plan exists for one specific case: you pay 1099 contractors and have no W-2 employees. As of 2026 it runs about $35/month plus $6 per contractor, and Gusto frequently waives the base fee for the first several months. Paying five contractors lands around $65/month; ten is around $95. The moment you hire a W-2 employee, you move to a regular payroll plan — the Contractor-Only tier is strictly for contractor-only businesses.
1099-NEC filing that handles itself
The real value isn't the payment — it's the paperwork. Gusto prepares and files 1099-NEC forms with the IRS automatically at year end and makes them available to your contractors. Because contractors onboard themselves through a self-service portal, their legal name, address, and TIN are collected up front — so you're not chasing W-9 details in January. That's the difference between a filing season that's a non-event and one that eats a week.
Multi-state and international contractors
U.S. contractors get paid by ACH direct deposit, and multi-state contractors are handled automatically — there's no separate setup per state for 1099 payments the way there is for W-2 payroll. Gusto also supports contractor payments in 120+ countries, so a mix of domestic and international contractors lives in one place. Contractors get Gusto Wallet access and their full payment history without you fielding "can you resend that?" emails.
How to save $300 on it
Every new Gusto customer can earn a $300 Visa card (up to $600 for teams of 10+) for running their first payroll — contractor payments included. On the Contractor-Only plan, that offsets close to a year of the base fee. It stacks with Gusto's normal pricing: you pay the standard rate and still get the card. See the full cost breakdown on our Gusto pricing page.
Contractor-only, or a full plan?
If it's purely 1099 workers today, start on Contractor-Only — it's the cheapest correct answer, and Gusto upgrades you cleanly when you add a W-2 employee. If you already have employees, a regular plan covers both from day one. Compare Gusto against other providers on our payroll comparison chart, and if you're an owner-operator, see Gusto for S-corp owners for how to pay yourself.