Yes—you can pay contractors with Melio. Melio treats freelancers and 1099 subcontractors like vendors: you fund a payment by ACH, debit or credit card, or wire where available, and a U.S. contractor typically receives an ACH deposit or a paper check. Recipients usually do not need a Melio account. Melio is bill-pay software, not employee payroll, so it will not run W-2 withholding or payroll tax filings. Both sides must be businesses (a sole proprietor counts). Collect a Form W-9 before the first payment and track Form 1099-NEC: the IRS threshold is $600 for payments made before 2026 and $2,000 for payments made in 2026.
Disclosure: This guide is educational and may include affiliate links. We may earn a commission if you sign up through our Melio partner link, at no extra cost to you. It is not legal, tax, accounting, or financial advice. Worker classification, Form W-9 / 1099-NEC rules, and product pricing change. Verify details with the IRS, your state agencies, Melio’s pricing page, and a qualified professional before you act.
Research note: Plan prices, ACH allotments, method fees, and contractor-pay rules below were checked on melio.com/pricing, Melio’s contractors and freelancers page, its 1099 and W-9 management page, and Melio Help on November 9, 2026. The 1099-NEC threshold for payments made in 2026 comes from IRS.gov. Treat fee tables as worksheets, not quotes.
Quick answer: can you pay contractors with Melio?
Takeaway: Yes for B2B, invoice-style 1099 pay; no as a stand-in for W-2 payroll or worker classification.
Melio’s Help Center answers the question directly: you can pay freelancers and 1099 contractors, including domestic and international payees. You choose how to fund the payment (ACH, credit card, or debit card). U.S. recipients can take an ACH deposit or a paper check. International contractors receive funds in their bank accounts, in USD or local currency. They do not need a Melio account to get paid, though they can open one later to send invoices through the platform.
The same Help articles draw a hard line around employee wages. Direct payments to W-2 employees are not supported. You can still pay a payroll provider by ACH or wire if that provider accepts those methods, but Melio will not run payroll tax deposits, benefits, or Form W-2 filings. If the person is an independent contractor doing invoice work, Melio is on-topic. If you are unsure, read W-2 vs 1099 and W-9 form vs W-2 before you send money through any bill-pay tool.
What Melio can do for contractor payments
Takeaway: Melio handles contractor invoices the same way it handles vendor bills: one queue, several funding options, and optional W-9 collection on paid plans.
Think of Melio as bill-pay software that also handles contractor invoices. You add the person as a vendor, mark them as a 1099 contractor, attach or request a W-9, enter the bill, pick a funding source, and schedule the payout. As of November 9, 2026, Melio’s contractor pages list these capabilities:
- Fund by ACH, debit card, credit card, or wire where available.
- Pay a U.S. contractor by ACH or mailed check; send international payouts to a bank account (USD or local currency).
- Skip forcing the contractor to create a Melio login. They get email updates when a payment is scheduled, sent, and delivered.
- Schedule payments in advance. Card funding can add about 30–45 days of float while Melio pays the contractor (card-network limits still apply).
- Use instant or same-day transfers, a trackable fast check (Melio describes arrival within 3 business days), or overnight check when speed is worth the extra fee.
- Request W-9s, store uploads, and (on Core, Boost, and Unlimited) sync to Tax1099 for 1099 e-filing. Standard Tax1099 fees apply. Paid plans list QuickBooks Online or Xero sync; Boost/Unlimited add QuickBooks Desktop, and Unlimited lists NetSuite.
Melio sits next to your books and payroll tool; it does not replace them. See our dated Melio review for small business owners and the fee notes in Melio pricing.
What Melio does not replace
Takeaway: Melio will not classify workers, run W-2 payroll, or pay personal (non-business) payees.
Melio Help’s “What can you pay with Melio?” article, updated October 28, 2026, starts with a simple rule: both payer and payee must be businesses. A sole proprietor or single-member LLC operating as a business generally counts. A personal favor, a private landlord who is not operating as a business, or any other personal transfer does not. Melio also blocks several card-network and cash-advance patterns, including using a credit card to pay a business owner, household member, or an entity the cardholder controls.
- Worker classification stays on you. Filing a 1099 through Melio plus Tax1099 does not turn an employee into a contractor. If you set hours and supervise daily work, a bill-pay receipt will not fix that.
- Payroll features are missing on purpose. Melio does not withhold employee tax, file payroll returns, or issue Forms W-2. If you need those, use payroll software. You can still pay a payroll provider through Melio if that provider accepts ACH or wire.
For options that skip a full payroll suite, see best ways to pay 1099 contractors without payroll software. If you are comparing AP platforms, start with Melio vs BILL and Melio vs Plastiq.
How to pay a contractor invoice in Melio
Takeaway: Add the contractor as a vendor, get the W-9 on file, enter the invoice, then choose funding and delivery before you schedule.
The workflow matches paying any other vendor bill. Melio’s 1099/W-9 page describes adding a vendor, requesting or uploading a W-9, marking them as a 1099 contractor, and paying from there. A first payment usually looks like this:
- Confirm the person is a business payee. Collect their legal name, any DBA, email, and how they want to get paid. If they are acting outside a trade or business, Melio is the wrong rail.
- Add them as a vendor and mark them as a 1099 contractor before the first invoice so later totals can roll into your 1099 worksheet.
- Request or upload a Form W-9. Melio can email a digital request on Core, Boost, and Unlimited. On Go, collect the form yourself—see how to collect a W-9 from a contractor. Paid plans can extract data from an upload and run TIN validation.
- Enter the invoice. Capture the amount, invoice number, due date, and what work it covers. If you sync QuickBooks Online or Xero on a paid plan, confirm the bill lands on the right vendor and account.
- Choose how you will fund the payment. ACH is usually cheapest inside your monthly free allotment (or on Unlimited). Card funding costs about 2.9% on Melio’s public fee table and can add 30–45 days of float. See paying vendors with a credit card if float or rewards are the reason you reached for a card.
- Choose delivery. ACH deposit or paper check are the standard U.S. options. Use a fast or overnight check, instant transfer, or same-day ACH only when the due date requires it; those methods add extra fees.
- Schedule the payment and keep the receipt with the W-9. The contractor gets email status updates without logging in. Include any amounts you paid the same person outside Melio when you work on year-end 1099s.
Melio contractor payment fees (2026 snapshot)
Takeaway: Start on free Go if you send a handful of ACH payments; budget Unlimited at $64/mo if contractor ACH volume would blow past the smaller allotments.
Melio’s public pricing page on November 9, 2026 lists four self-serve plans plus invite-only Platinum. Paid plans advertise a 90-day trial; Melio says an account that does not subscribe then converts to free Go, and premium-feature data may be removed. Unlimited is listed at $64/mo, down from the $80 figure this article cited on October 21, 2026. Recheck melio.com/pricing before you enroll.
| Plan | List price (Nov 9, 2026) | Users | Free ACH / month | Contractor-relevant extras |
|---|---|---|---|---|
| Go | $0 | 1 | 5, then about $0.50 each | ACH, check, wire, card pay; no built-in W-9 request or Tax1099 sync |
| Core | $25/mo (about $20/mo billed annually) + $10/mo per extra user | Base seat + paid extras | 20, then about $0.50 each | W-9 collection, TIN validation, 1099 automation via Tax1099, QBO/Xero sync, approvals, batch pay |
| Boost | $55/mo (about $44/mo billed annually) | Extra users $10/mo in Melio’s compare grid | 50, then about $0.50 each | Core extras plus advanced roles, QuickBooks Desktop sync, vendor credits (QBO), premium phone support |
| Unlimited | $64/mo | Unlimited seats | Unlimited free ACH | Everything in Boost, plus NetSuite sync |
Method fees sit on top of the plan fee. When you fund from a bank account, Melio’s public “all transaction fees” table lists:
| Funding → delivery | Listed fee (Nov 9, 2026) |
|---|---|
| Bank → ACH | $0.50 after your free ACH allotment (Unlimited has no ACH cap) |
| Bank → standard check | $1.50 |
| Bank → fast check | $20 |
| Bank → overnight check | $50 |
| Bank → instant transfer or same-day ACH | 1% ($75 max) |
| Bank → wire | $10 |
| Bank → same-day wire | 1% ($10 min, $75 max) |
| Card → ACH or standard check | about 2.9% |
| Card → fast check / overnight / instant / same-day wire | about 2.9% plus the matching expedite fee |
| Global payments by ACH (USD / fast USD / local currency) | $20 flat (USD); 1% ($30 min, $95 max) for fast USD; conversion rates for local currency |
Count monthly contractor-plus-vendor ACH payments to pick a plan. Five or fewer, and Go can work if you collect W-9s yourself. Around 20, Core’s allotment plus W-9/1099 tools is usually cleaner. Regularly above 50, or extra seats, and Unlimited’s $64/mo unlimited ACH is easier to model than stacking $0.50 overages. Treat card funding as a cash-flow choice: 2.9% on a $3,000 invoice is $87.
Melio vs payroll tools for contractors
Takeaway: Use Melio when the contractor sends invoices you would otherwise pay like vendor bills; use payroll software when you need contractor records next to W-2 employees.
The frequent fork is Melio versus a payroll product that also pays contractors.
| Situation | Usually better fit | Why |
|---|---|---|
| A designer, bookkeeper, or subcontractor invoices you after a project | Melio | The payment is a vendor bill: ACH or a check, optional card float, and a W-9 on file. |
| You already run W-2 payroll and want contractors in the same system | Payroll software | One directory, one contractor login, and year-end contractor forms next to employee forms. |
| You need to pay W-2 wages, withhold tax, or file payroll returns | Payroll software | Melio does not support direct W-2 employee payments. |
| You want to pay an invoice with a credit card even if the contractor does not accept cards | Melio | Card-to-ACH or card-to-check is a core Melio use case (about 2.9%). |
| International contractor paid to a local bank account | Check both | Melio publicly supports international contractor payouts; payroll tools vary. Compare fees and countries in-product. |
If payroll is the better rail, start with how to pay contractors with Gusto. If invoice-style AP is the job, Melio or another tool from our comparisons keeps contractor bills next to rent, software, and suppliers.
W-9 and 1099 hygiene when you pay with Melio
Takeaway: Get a signed W-9 before the first payment, and use $2,000 as the Form 1099-NEC threshold for payments made in 2026.
Melio Help recommends securing a signed W-9 before the first contractor payment. That matches ordinary tax-compliance practice: you need the legal name, address, tax classification, and Taxpayer Identification Number for Form 1099-NEC. Paid plans can send the request, store the form, validate the TIN, and later sync eligible vendors to Tax1099. Go users can still pay contractors; they collect and store the W-9 themselves.
The reporting dollar amount changed for 2026. The IRS page “Am I required to file a Form 1099 or other information return?” states that for payments made before 2026 the Form 1099-NEC threshold is $600, and for payments made in 2026 it is $2,000. After 2026, see Publication 1099 for inflation-adjusted amounts. The 12/2026 Instructions for Forms 1099-MISC and 1099-NEC use the same $2,000 figure. If you withheld federal income tax under backup-withholding rules, you file Form 1099-NEC regardless of amount.
Two Melio-specific details are easy to miss:
- If you paid a contractor less than the threshold inside Melio but also paid them outside Melio, and the combined total meets the threshold, you still need a W-9 and may still need to file. Melio Help calls this out explicitly.
- Melio calculates annual payments against the 1099 threshold, but a Tax1099 sync includes only contractors with complete, verified W-9s. Pending forms can omit someone you paid enough. Resolve those forms before you sync, then finish e-filing with how to file Form 1099-NEC.
Melio is a payment and document workflow, not the filing itself. You remain responsible for who should receive a 1099, amounts paid through every channel, and deadlines. Copy A and the recipient copy of Form 1099-NEC are generally due January 31 of the following year.
Common mistakes to avoid
Takeaway: The expensive mistakes are skipping the W-9, treating Melio totals as your only 1099 source, and using Melio to pay people who should be on payroll.
- Paying a W-2 employee through Melio. Melio’s unsupported-payment list blocks direct employee wages. Use payroll instead.
- Sending the first payment without a W-9. Chasing a form in January is harder than collecting it at the start.
- Trusting Melio’s 1099 worksheet alone. Add checks, wires, cash apps, and any other account you used to pay the same person.
- Leaving W-9s in “pending” and then syncing to Tax1099. Incomplete forms can omit a contractor from the file.
- Defaulting every invoice to card funding. About 2.9% is rational for float or rewards on some bills and wasteful on routine contractor ACH.
- Paying a personal payee. Both sides need to be businesses. If Melio asks for a trade license, DBA, Schedule C, or business bank statement, that is the B2B rule showing up in verification.
FAQ: paying contractors with Melio
Can you pay 1099 contractors with Melio?
Yes. Melio Help states that you can pay freelancers and 1099 contractors, domestically and internationally. You fund the payment by ACH, credit card, or debit card, and U.S. contractors typically receive ACH or a paper check. Collect a W-9 first and track the IRS 1099-NEC threshold for the calendar year.
Do contractors need a Melio account?
No. Melio’s contractor and 1099 pages say recipients do not need an account to submit a W-9 or get paid. They receive email updates as the payment is scheduled, sent, and delivered. If they later create a free account, they can send you invoices through Melio.
Is Melio the same as payroll for freelancers?
No. Melio is bill-pay / accounts-payable software. It can pay a 1099 contractor and help you store W-9s, but it does not withhold employee taxes, file payroll returns, or issue Forms W-2. Direct payments to W-2 employees are not supported.
Melio or Gusto for contractors—which should I pick?
Pick Melio when the contractor invoices you like a vendor and you want ACH, check, or card-funded bill pay. Pick payroll software such as Gusto when you already run employee payroll and want contractor payments in that same system. See how to pay contractors with Gusto.
Can I fund a contractor payment with a credit card in Melio?
Yes. Melio says you can pay contractors by card even when they do not accept cards, which can add about 30–45 days of float. The public pricing table lists about 2.9% for card-funded ACH or standard check, plus extra amounts for faster delivery. Card-network rules still apply.
Will Melio file my 1099s automatically?
Not by itself, and not on every plan. Core, Boost, and Unlimited can sync data to Tax1099 for e-filing (standard Tax1099 fees apply). Go users need to upgrade for that sync. Only contractors with complete, verified W-9s are included. You still review totals, add amounts paid outside Melio, and file on time.
What is the 1099-NEC threshold for 2026?
For payments made in 2026, the IRS Form 1099-NEC threshold is $2,000. For payments made before 2026, it is $600. After 2026, check Publication 1099 for inflation-adjusted amounts. Confirm the current rule on IRS.gov before you file.
Can Melio pay international contractors?
Yes, according to Melio’s contractor pages and Help Center. International contractors receive payments to their bank accounts, in USD or local currency. Public global ACH fees on November 9, 2026 start at $20 flat for USD, with percentage-based pricing for faster USD and conversion rates for local currency. Confirm country support and the exact fee in your account before the first cross-border payment.
Related reading and next step
Takeaway: If Melio fits invoice-style contractor pay, start on Go, collect W-9s immediately, and upgrade when ACH volume or W-9/1099 tools justify it.
You can pay contractors with Melio when the work is B2B and invoice-style. Fund by ACH, check, card, or wire; keep Melio out of W-2 payroll; and treat W-9 collection plus the $2,000 2026 Form 1099-NEC threshold as part of each payment.
For fees and fit, continue with Melio pricing and our Melio review for small business owners. For the neighboring workflow, see best ways to pay 1099 contractors without payroll software and how to collect a W-9 from a contractor.
Next step: If invoice-style contractor pay is the job, try Melio on the free Go plan and run your first freelancer payment with a W-9 already on file. Get started with Melio.