Subcontractors and 1099s

Subcontractors and vendors#

A vendor is anyone you pay: a shop, a service, a supplier. Vendors are made as you add expenses, and listed on Vendors. A subcontractor is a person or company you pay to do part of the work for your clients: a vendor with the Subcontractor switch on, listed on Subcontractors with their W-9 and what you've paid them, for 1099s.

Subcontractors is a feature you can turn off, and back on, in Terms and features. The words can be changed there too (Freelancers, say), and these steps work the same.

Adding a subcontractor#

Subcontractors

Subcontractors

The people you pay to do part of the work: what they're paid, and their W-9s and 1099s.

Add Subcontractor

Subcontractors

2

Paid in 2026

$14,350.00

Contract labor and anything else bought from them

1099s

1

Paid $2,000.00 or more in 2026

SubcontractorTagsRate2026All timeLast paid

Theo MarshEditor$65.00/hr$12,600.00$21,450.00Oct 24, 2026

Quill & Ink CopyCopywriter$500.00/day$1,750.00$1,750.00Sep 30, 2026

Step 1 of 5PauseStart over

1. 1On Subcontractors, click Add Subcontractor.
2. 2Name them. Usual expense category starts at Contract labor, and the Subcontractor switch is on.
3. 3Tag what they do, and note their Cost rate, per hour or per day.
4. 4When their W-9 comes in, switch on W-9 on file, with the date and their tax ID from it.
5. 5Click Add Subcontractor. Their page adds up what you pay them against the 1099 threshold.

1. On Subcontractors, click Add Subcontractor.
2. Give their Name, and contact details if you like. Usual expense category starts at Contract labor, and fills in when you pick them on an expense.
3. Under What they do, add tags (Editor, Animator…) to tell people apart and filter the list. Cost rate, per Hour or Day, is what they charge you: a note for you, on the list and their page. EscBooks doesn't price anything with it.
4. When their W-9 arrives, switch on W-9 on file, set W-9 received, and type the Tax ID (EIN or SSN) from it.
5. Click Add Subcontractor.

Anyone you pay for Contract labor can become one: a new vendor first paid in that category starts as a subcontractor, and Vendors lists any others paid for contract labor this year, with Mark as Subcontractor.

The tax ID is kept encrypted. Their page shows its last four; Show reveals the whole number, and each time it's shown is recorded in Recent Activity.

Their cost on your projects#

EscBooks doesn't track a subcontractor's hours: it records what you pay them. There are two ways to put that against a client's work.

• Their invoice to you, as a bill. When they invoice you, enter it on Bills (or Enter Bill on their page), with the project it was for, and pay it from there. You bill the client your own price for the work. The bill is in that project's Own costs in Project Profitability: once it's paid on cash basis, or on its bill date on accrual basis. Their 1099-NEC counts what you paid them, on either basis.
• Passed on to the client, as an expense. Record what you paid them as an expense in Contract labor, for the client and project, with Bill to the client on and a markup if you add one. It waits in To Invoice for the client's next invoice.

What each leaves you:

Either way, what you pay them is an expense in Contract labor, and what the client pays you is income, each when it's paid. What you keep is the difference.

Billing their work to a client#

Expenses

Expenses

What jobs cost. Bill them back to clients with a receipt, or keep them as your own.

Add Expense

Oct 27, 2026Stock footage licenseSoftware$89.00

Oct 22, 2026Color gradingContract labor · Theo Marsh$1,040.00

Oct 18, 2026Hard drives for the shootMaterials$214.50

Step 1 of 5PauseStart over

1. 1Paid them for work on a client's job? On Expenses, click Add Expense.
2. 2Type what you paid, in Contract labor, with them as the vendor.
3. 3Pick the client and the project it was for.
4. 4Switch on Bill to the client, and set your markup. It shows what it bills as.
5. 5Click Add Expense. It waits in To Invoice beside your time, for the client's next invoice.

1. On Expenses, click Add Expense.
2. Type the Amount you paid them, pick Contract labor as the Category, and them as the Vendor.
3. Pick the Client and the Project.
4. Switch on Bill to the client. Set Markup (%) (your default, from Billing Rules, is filled in); it shows what the expense Bills as.
5. Click Add Expense. It's on To Invoice with the client's unbilled time, to add to their next invoice.

Bill to the client shows once Billing expenses to clients is on in Terms and features. Project Profitability leaves billed-back expenses out of both its Billed and Own costs columns, since the client pays them.

Paying them#

Pay their bills from Bills, where one payment can settle several of their bills. A payment without a bill (a check, ACH, wire, Zelle or a payment app) is a vendor payment: see Paying vendors. Paid by card? That's an expense like any other, with them as the vendor.

Every payment, in Contract labor or anything else you record from them, adds to Paid in this year on their page and on the list.

1099s#

A US business generally sends a 1099-NEC to each subcontractor it paid at least the year's threshold, by January 31 (one that's a corporation usually doesn't need one):

• $600 through 2025.
• $2,000 for 2026.
• From 2027, adjusted for inflation each year; the IRS's 1099-NEC instructions for that year give it.

• Each subcontractor's page has a 1099-NEC chart: what you've paid them this year, adding up against the threshold. Past it, it's marked 1099 required, with a reminder to get their W-9 first, since it has the tax ID the form needs.
• 1099s on Subcontractors counts how many you've paid the threshold or more this year.
• Reports → Taxes lists each subcontractor with what you paid them, their W-9, and whether a 1099 is likely needed, with a spreadsheet for your accountant. EscBooks doesn't file 1099s.
• Payments by card or payment app (PayPal, Venmo…) are reported by the card network or the app on a 1099-K, not on your 1099-NEC. Reports → Taxes leaves them out, in its For 1099-NEC column; the chart on their page counts them all.