Should I add a contractor or an employee?”

I'm here to put an end to your confusion about adding an employee or contractor in QuickBooks, @prasanna_valliap.

If at the end of the year you need to file a W2 form, you can add an employee to your account. You have two options on how to add your new employee with QuickBooks Online Payroll:

• Set up some info, then invite your employee to add the rest.
• Set up and add all employee info

To add your employee, here's what you need to do:

1. Open QuickBooks Online and go to Payroll.
2. Choose Employees, then click Add an employee.
3. Enter the necessary details in the Personal Info section.
4. Input the info in each section, and then click Done.

For more insights, please check this article for your reference: Set up your new employee in QuickBooks Online Payroll.

If you're trying to file the 1099, then I suggest adding contractors into your account. By doing so, this helps track payments you make to them.

1. Go to Payroll and select Contractors (take me there).
2. Click Add a contractor.
3. Enter your contractor’s info, or select the Email this contractor checkbox so they can fill it out.
4. Once done, click Add contractor.

I'm also adding this resource for more information about the process: Set up contractors and track them for 1099s in QuickBooks.

If you're still unsure as what to add in QuickBooks, I recommend consulting your accountant. 

You’ll need to complete a few tasks before you can pay your people. Here’s a handy guide to help you get set up: Get started with QuickBooks Online Payroll.

As always, I'm just a post a way if you need more help setting up your employee or contractors in QuickBooks. Take care and have a good day!