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Office of the Controller

Steps for Processing an Independent Contractor Payment

Steps for Processing an Independent Contractor Payment

The following steps will start the approval process for services to be rendered and paid by the University. Please note the "Name" field and "Tax Identification Number" (SSN, TIN, ITIN, or EIN) field MUST be the same on all forms submitted for payment.  


  • Step 1:

Form W-8BEN-E

Form W-8ECI

Form W-8IMY 

Form W-8EXP 

  • Step 2: Fill out a New Vendor Registration Form  (First-time vendors only). If NA, skip to Step 3.
  • Step 3: Complete and attach the Independent Contractor Determination Form 
  • Step 4: Attach the contract/PSA .xlsx, .pdf. ALL payments for services MUST have a written quote/agreement/contract/ that includes a scope of work. You may have a separate contract or you may complete the Professional and Personal Services Agreement (PSA). The PSA document is USM's internal personal services contract template.  Please use the following document when a separate contract exists:  .xlsx or .pdf
  • Step 5: Send all completed and applicable forms from the above steps (step 1-4) to the Controller's Office through interdepartmental mail Attention: Melody Duncan (Box no. 5143) or through email at PSAFREEMississippi for approval by the Tax Compliance Officer.
  • Step 6: For an Independent Contractor payment under $500, complete a Remittance Voucher and send to Accounts Payable through interdepartmental mail (Box no. 5104) for payment processing.
  • Step 7: For an Independent Contractor payment over $500, you’ll need to submit a Requisition Request through SOARFIN to Purchasing. Once you have a Purchase Order number and payment is due, then submit an accurate invoice to Accounts Payable for payment processing.


Addendum to existing PSA

  • If you need to make a change to extend work or increase the payment for an existing PSA, please download and complete the addendum and attach the original PSA.  Send through the original steps for approval.  There shouldn’t be more than one or two addendums that need to be made for a PSA unless it is with a separate contract.  If you continue to have changes, please term the current PO with Accounts Payable and submit a new PSA. 


Important Processing Information

  • I.R.C. Section 1441 (c) (1) The federal withholding exemption for effectively connected income does not apply to the personal services income of a Nonresident Alien. As such, a 30% federal tax withholding rate would apply.
  • The originating department should maintain a copy of all documents associated with an independent contractor payment request. If payment is $500 or more, a Requisition must be submitted before work commences to create a Purchase Order. Upon completion of services (or for each partial payment), the originating department should acknowledge performance and forward documentation to Accounts Payable in Procurement Services for payment. The department should also notate on the Remittance Voucher or Purchase Order that the original completed Professional and Personal Services Contract is in Purchasing.


Refer to The IRS Guidelines for Determining Worker Status  for specific procedures on determining employee versus independent contract status.