Need help! Subcontracting?

Discussion in 'Business Operations' started by Johnson LCO, Jan 18, 2008.

  1. Johnson LCO

    Johnson LCO LawnSite Senior Member
    Posts: 336

    I own a company and work by myself the majority of the time but in some instances my former boss will call me to help him out or do work for him on my own. It is a pain in the a** to do paychecks and crap like that for it so I was wondering if i should just have him pay me as a subcontractor. He said he would pay me more if he would pay 5 dollars more per hour as a sub since he would save on workers comp, taxes, and accounting work but I was wondering what the disadvantages of this would be?
     
  2. john3253

    john3253 LawnSite Member
    Posts: 20

    Worker's Comp seems to be the biggest disadvantage. If you get injured you won't have any income from worker's comp or your business. Also you will have to pay self employment taxes on top of the normal income taxes. Hope this helps!!
     
  3. Johnson LCO

    Johnson LCO LawnSite Senior Member
    Posts: 336

    Thanks, that was what I was looking for. Do you think the extra $5 will be worth the additional tax?
     
  4. john3253

    john3253 LawnSite Member
    Posts: 20

    In my opinion no, but that all depends on your situation. If you absolutely need the extra $5 then go for it, but if the risk is to high of getting injured or something else I wouldn't do it. As far as taxes go you can go to legalzoom.com or the IRS website and figure out if that five dollars extra will cover your self employment taxes. I'm pretty sure it will being that the current rate is 15% but you should still check for yourself though, I'm not a lawyer or accountant.
     

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