QuickBooks defines an employee as someone you give a W-2form to at the end of the year. You pay them with paychecks and withhold taxes for them. Set up all those who fall into this category as an employee. See Types of employees for more information.
QuickBooks defines an independent contractor as someone you give a 1099-MISC form to. You pay them with regular checks, and you do not withhold taxes on their behalf.
Note: Do not set up owners and independent contractors as employees.
Paying independent contractors
Paying an owner or partner
Paying owners or partners for time worked
Paying nonemployees for time worked