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When a US contractor’s role becomes a full-time position, Bolto converts them to a W-2 employee in one guided flow: their contractor engagement is closed out cleanly, a new employee record is created on the same login, and they’re invited to complete employee onboarding.
Before you start:
  • Conversion is for US contractors of companies enrolled in Bolto Payroll
  • The contractor must be active and have completed their contractor onboarding
  • You need an active payroll group to place them in
  • Available to Owners and Contractor Managers

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How to convert

From Payroll → Employees, open the Add employee menu and choose Convert contractor.
1

Select the contractor

Search your existing US contractors and pick the person. Their legal name, email, and work locations are pulled from their contractor record automatically.
2

Work details

Job title, employee start date, department, payroll group, work location, and whether to require I-9 verification.Bolto derives the contract end date for you: the contractor’s current contract ends the day before their employee start date (or on its own earlier end date, if the contract was already ending).
3

Compensation

Exemption status, pay type (Hourly / Annually / Piece), and amount. For hourly non-exempt employees, overtime and double-overtime rates are created automatically.
4

Review and confirm

The review screen spells out the transition — when the contract ends, when employment starts, and what the person will be asked to complete. Confirming is final: the existing contract is permanently ended and the conversion can’t be undone.

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What happens when you confirm

  1. The contractor engagement is closed out — their contract is given its end date and their contractor record is end-dated. Their payment history is preserved; they’ll still receive a 1099-NEC for the contractor portion of the year.
  2. A new employee record is created on the same Bolto login, carrying over their personal details (name, contact info, address) and work locations.
  3. Pay rates are set up, including auto-created overtime rates for hourly non-exempt employees.
  4. They’re added to the current payroll draft for their group when their start date falls in the current pay period — otherwise they’re included in the next one.
  5. They receive an onboarding email with a link to complete their employee setup.
If the payroll group has Auto-Pay enabled, adding the converted employee cancels Auto-Pay for that pay period — review and approve that payroll manually.

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What your new employee completes

Employee onboarding is a fresh start — contractor payment details don’t carry over to the employee record. They’ll be asked for:
  • Personal details and SSN
  • Tax withholding — federal W-4 and state forms
  • Bank details for direct deposit
  • Form I-9, Section 1 — if you required I-9 verification (you’ll then complete Section 2)
Until they finish, they appear under Hires in progress on the Employees overview, and they’ll block payroll approval if unresolved by the deadline — Bolto flags this on the draft.

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Good to know

  • One person, two records. After conversion, the Team Directory shows both the closed contractor record and the new employee record. Their contractor payment history stays intact.
  • W-2 and 1099-NEC in the same year. Someone converted mid-year receives both forms for that tax year — a 1099-NEC for contractor payments and a W-2 for wages.
  • Timing the switch. Pick a start date at a clean pay-period boundary when you can — it keeps the final contractor payment and the first paycheck from overlapping the same days.
  • One-way flow. There’s no employee-to-contractor conversion. If a former employee later returns as a contractor, add them through the normal contractor flow.
  • Payroll groups with Auto-Pay accept salaried compensation only — to convert someone as hourly, place them in a non-Auto-Pay group.