Do gauge fields really contribute negatively to black hole entropy?

Quantum fluctuations of matter fields contribute to the thermal entropy of black holes. For free minimally coupled scalar and spinor fields, this contribution is precisely the entanglement entropy. For gauge fields, Kabat found an extra negative divergent ``contact term'' with no known statistical interpretation. We compare this contact term to a similar term which arises for nonminimally coupled scalar fields. Although both divergences may be interpreted as terms in the Wald entropy, we point out that the contact term for gauge fields comes from a gauge-dependent ambiguity in Wald's formula. Revisiting Kabat's derivation of the contact term, we show that it is sensitive to the treatment of infrared modes. To explore these infrared issues, we consider two-dimensional compact manifolds, such as Euclidean de Sitter space, and show that the contact term arises from an incorrect treatment of zero modes. In a manifestly gauge-invariant reduced phase space quantization, the gauge field contribution to the entropy is positive, finite, and equal to the entanglement entropy.