First post/Subcontracting question.

Discussion in 'Business Operations' started by A1Green, Mar 16, 2005.

  1. A1Green

    A1Green LawnSite Member
    Posts: 5

    First of all I'd like to introduce myself as this is my first post.
    I've been in the business for 8 years now(wow, how time goes by huh?), live in Connecticut and primarily do lawn care. My business is basically a one man operation. I also do snow plowing.
    Anyways, I'm looking to hire someone full time this year(finally) but am wondering is subcontracting is simply the way to go. I know as far as payout, there is a difference in hiring someone under you, and subbing out some other company.
    For example, if I gross say $40,000 during the growing season(not including plowing which I gladly do myself), what is a ballpark figure to pay someone to do virtually all the labor? I figure if I sub out, then I can do it all for my accounts(mulch, clean ups, edging, plantings, etc.), than just the lawn care aspect of the business, which I still may do myself-mowing, fertilizing, and aerating.
    Any help would be most appreciated!
    Thanks in advance.

    Craig
     
  2. amw

    amw LawnSite Senior Member
    Posts: 408

    welcome to lawnsite....
     
  3. westwind

    westwind LawnSite Senior Member
    Posts: 444

    sub-contracting will let you avoid paying income tax, insurance, and liabilty on that sub. However, in turn your sub. needs to have his own insurance, liabilty, and the forsight to pay the tax. Also no workers comp., or unemployment tax.
    If you can find the right person, i would sub. but don't let them screw ya'.
    Good Luck.
     
  4. LB1234

    LB1234 LawnSite Gold Member
    Posts: 3,210

    You need to be very careful about who/what a subcontractor is. IRS has some very strict rules onthis. Don't know them of the top of my head. Basically, if you contract out the contractor can't use your equipment, you can't tell them 'how' to do the job, and you can't tell them 'when' to work.

    Again, I'm not 100% on the wording...you need to check.
     
  5. tonygreek

    tonygreek LawnSite Gold Member
    Posts: 3,480

    A1, welcome to the site. as the others have alluded to, what you seem to want to do is simply have an employee that you choose to pay as a sub. the odds are strongly in the IRS's favor that you would not pass their test. among things they cannot do is wear your logos and use your equipment.

    here's the IRS section on sub or employee:
    http://www.irs.gov/taxtopics/tc762.html
     

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