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Thank you for contacting us. EzPaycheck payroll software  can work for you. I would like to suggest you add one account first for W-2 employees only, then add second account by duplicating the first one for 1099 contractors. You can refer to this article for more details

How to handle paychecks for both employees and contractors
http://www.halfpricesoft...nd-1099-Contractors.aspx 

ezPaycheck payroll software is just $89 per installation per year. It can support multiple accounts with no extra charge.

If you have not got a chance to try ezPaycheck, you are welcome to download and test drive it with no credit card needed and no obligation at
http://www.halfpricesoft.com/payroll_software_download.asp 

Let us know if you still have any other questions.

Thanks,
Casey
Please feel free to contact us directly  if you need assistance
Small Business Payroll & Tax Software Solution
https://www.halfpricesoft.com 
We just have three employees and two 1099 contractors. Can ezPaycheck works for us? How much?