Independent Contractors, How to Pay
Payment method
Choosing the appropriate method for paying an independent contractor (including the payment of an honorarium) depends on several factors. Select the appropriate payment method from the options below.
Individual – U.S. Citizen
- If the recipient is a UNC Charlotte employee, use a PD-7 / Supplemental University Employment / ePAF form
- If the recipient is an employee of another NC State agency, use a CP-30 form
- For all other recipients:
- Complete an Independent Contractor Checklist and submit it to the Tax Office
- Use an eCR (electronic check request)
Individual – Foreign National / Non-U.S. Citizen
- Ask the recipient to complete the Foreign National Information Form and the Vendor Information Form – Foreign Persons (Form W-8BEN) and submit it to the Tax Office
- Complete the Independent Contractor Checklist and submit it to the Tax Office
- Use the eCR (electronic check request)
Business
- If the business is being paid under its employer identification number (EIN), it will not be classified as an independent contractor, use 49er Mart or refer to Pay for Consulting Services
Payments to Non-NC Based Companies and Individuals for Performance-related Events
Non-wage compensation of more than $1,500 during a calendar year to a non-NC resident contractor for personal services performed in NC in connection with a performance, an entertainment or athletic event, a speech, or the creation of a film, radio or television program, is subject to NC income tax withholding at the rate of 4%. This also applies to all services performed by ITIN holders. Such payments should be requested using an electronic check request (eCR). A non-NC resident contractor is defined as an individual or business not domiciled in the state of North Carolina.
How to Process Honorariums Via eCRs
- If you are reimbursing travel expenses directly and solely related to an honorarium, you can either:
- Submit the full amount to be paid via an eCR using the Payment Type of “Honorarium.” This full amount, if $600 or more, will be subject to income tax reporting for the recipient on a Form 1099-MISC. The recipient can deduct qualified business expenses on their income tax return; they should consult their own tax advisor for guidance. — OR —
- Submit two eCRs:
- Submit the taxable honorarium amount via an eCR using the Payment Type of “Honorarium.” This amount, if $600 or more, will be subject to income tax reporting for the recipient on a Form 1099-MISC.
- Submit the reimbursement for travel expenses via an eCR using the Payment Type of “Reimbursement.” Attach a copy of the approved honorarium agreement, which will serve as authorization of the travel.
Quick Links
Procedures
Forms
- Independent Contractor Checklist (ICC) Form
- Foreign National Informational Form – Student
- Foreign National Informational – Visitor
- Employee/Student Direct Pay Request (ESDPR)
- Payroll/Personnel Action Form (PD-7)
- HR Supplemental University Employment Form
- Dual Employment – Request for additional payment for work performed for other State agency (CP-30)
Questions?
Refer to the contacts listed on the Tax Office website.
Last Updated: July 1, 2020