Short answer: not to pay yourself, but possibly to pay your team. Here's how it works depending on who you're paying.
How do I pay myself as a Sole Proprietor?
As a Sole Proprietor, the IRS does not permit you to pay yourself using a payroll service. Instead, you'll pay yourself through Owner's Distributions, by simply transferring money from your business bank account to your personal bank account. To learn more, please see How to Pay Yourself as a Sole Proprietor – Heard. Because of this, Heard Payroll isn't available for paying yourself as a sole proprietor.
How do I pay W-2 employees?
If your practice has hired W-2 employees, you can enroll in Heard Payroll to pay them, even as a Sole Proprietor.
How do I pay contractors?
If you only work with contractors (1099 workers), a full payroll system isn't necessary. Most therapists pay contractors through a payment processing service, such as a bank transfer or Zelle.
A few things worth knowing:
- If you pay any contractor more than $600 in a year, the IRS requires you to issue them a Form 1099-NEC.
- If you pay contractors through a payroll provider, that provider will typically generate and file the 1099 forms on your behalf at year-end, as long as the payments meet the income threshold.
- Heard Payroll doesn't support contractor-only accounts. At least one W-2 employee is required to be eligible for Heard Payroll.
Which Sole Proprietor setups work with Heard Payroll?
Whether Heard Payroll will work for your practice depends on the mix of people you're paying.
✅ Only W-2 employees Heard Payroll works in this case. Onboard yourself in the system without paying yourself wages, and onboard your W-2 employees normally.
✅ A mix of contractors and W-2 employees. Heard Payroll works here, too. Onboard yourself with a $0 wage, add your W-2 employees, and then add your contractors.
🚫 Only contractors, no W-2 employees Heard Payroll isn't available in this case. As a Sole Proprietor, you can't pay yourself through payroll, and without any W-2 employees, there's no one for the payroll system to run.
Enroll in Heard Payroll
As a Sole Proprietor, on an Essential plan, you won’t have automatic access to the Payroll tab on your Heard dashboard just yet.
If you'd like to pay your W-2 employees using Heard Payroll, please reach out to our team to get started with an evaluation of your payroll needs. To read about the benefits, please see What is Heard Payroll?