Jump to content

Paying an employee


Recommended Posts

I have been thinking for a while about trying to find a part time employee ....  the question I have is about how to set up their pay.  I was thinking about paying by the stop, they would be independant contractors and could work at their own pace for the most part.  Has anyone tried something like this?  Hourly?  Commission?  some combination?  What has worked best for others?

Link to comment
Share on other sites

I have been thinking for a while about trying to find a part time employee .... the question I have is about how to set up their pay. I was thinking about paying by the stop, they would be independant contractors and could work at their own pace for the most part. Has anyone tried something like this? Hourly? Commission? some combination? What has worked best for others?

People working for you in this industry ARE NOT independent contractors. You can set them up and pay them this way and get by for years, I know guys that have and do. BUT if you ever get audited, or more likely one of them gets mad or fired and turns you in or files for unemployment is when the trouble starts.

You WILL be held liable for all the payroll and unemployment taxes that YOU are responsible for AND all the witholding YOU should have done from your employees pay PLUS penalties, which are quite significant AND interest on the taxes AND penalties from the date they were due.

I know of one guy here locally that lost EVERYTHING, his business, his home and his marriage from the stresses of the situation.

If you are going to hire someone do it the right way and don't put all that you worked for at risk. Doing payroll is not that hard, its some additional paperwork and documentation you need to keep up with or you can hire a service to do it for you for minimal cost. If you want some additional help to DIY, let me know I'll be happy to help.

Link to comment
Share on other sites

I agree with Mission - forget the independent contractor business.  Back in the day when I had 50 plus employees we did payroll in-house and it took a fair amount of time and paper work, filings etc.  After I downsized, I used a payroll service and was surprised that they were very reasonable and handled all the filings and paper work for me for not much more than I had been paying when doing it myself.  In my case their angle was the differential in workman's comp insurance as their rate was much cheaper than mine had been.  It's well worth their fee if you're only hiring one or two people.

Link to comment
Share on other sites

If you decide to do your payroll yourself, you must be diligent in doing it on a consistent, regularly scheduled basis.  Heck, this applies even with a payroll service.  It's probably good for you to do it by hand in the beginning to understand the process, the taxes, filing schedules and to determine how much time it really takes.  If you then find your time more valuable than spending it looking up numbers in a tax table, filling out a few forms each month and writing the checks, then look into payroll services. 

 

I did my first two employees by hand, but by the time I needed three employees I didn't have the time to continue the task manually (plus I was tired of all the form filling), so I hired Paychex to do it for me at a very reasonable price.  I still had to send them the gross pay and hours worked, as well as vacation pay information, but they file all the forms and transfer all the taxes from your account to the government then print and deliver the checks on your payroll schedule.  After my introduction to Quickbooks, I used their payroll service for a few years and was very pleased with it too.

 

Remember to maintain a sufficient balance in your checking account so no taxes or payroll checks bounce - that will be embarassing.   You should also get workers compensation insurance.  The policies are very inexpensive because the burden is spread out over ever employer, especially if you have a state-sponsored workers comp you can sign up for.

Link to comment
Share on other sites

I just use my 10 year old daughter....  If she works (loads the machine and removes the money) she gets $2 per machine....  And an orange soda for the way home :)

I used my 12 year old grandson today.

 

Gave him twenty dollars and a bag of Ruffles.

Link to comment
Share on other sites

All good advise, thanks!  Donut and Cajun - keep up the good work, that is how I was raised; working in my Dad's C-store ... well, maybe I am not the best example!  Yes, I knew the contractor deal is a potential a** biter, and the wave off is appreciated, I will look into a payroll service ...

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

×
×
  • Create New...