Normally, you will report the total dollar amount shown on your 1099-Misc. I assume this is Box 7 of your 1099 Misc which shows $20,400. The $12,000 paid to your employee would have to be shown as a business expense in the body of your tax return. 

PEK is correct. Enter your 1099-MISC in the income section for your business for $20,400 then list your contract labor under the expense section. If using an online version, you may need to select the small drop down arrow next to Less Common Expenses to see the contract labor category.