I added the contractor payout option, but it seems contractors need a paid QB account to receive direct deposits. This doesn't seem right... is it?

Hi there, Dan.

Welcome to the community page. Let me provide you with clarifications about the process of paying your contractors with direct deposit in QuickBooks Online.

When you set up your contractors in your QBO account, they'll receive an email or the onboarding link you've mentioned to enter their information. This way, you won't need to enter their information on your behalf, and they'll automatically have a QuickBooks Self-Employed limited account for free but not limited to a 30-day free trial.

Ensure that your contractor didn't sign up or subscribe to any QuickBooks services so they don't have to pay for anything or start a QuickBooks free trial. Please note that your contractor should have a QuickBooks Self-Employed account instead of a QuickBooks Online free trial account.

After that, you'll need to add your company's bank details and your contractor's direct deposit info so you can start paying them.

You can always post here on the community page if you have additional concerns besides setting up a contractor in QuickBooks Online. I'm here to help any time.