paying empl. cash vs. check

Discussion in 'Lawn Mowing' started by gway, Mar 2, 2001.

  1. gway

    gway LawnSite Member
    Posts: 36

    all right ive been in buis now for almost 8 years and all this time ive been paying out $$ and i want to finally make the step up and get on the right track and start putting my workers (illeagals) on the books im just worried that this is gonna eat at my bottom line and i want to know if im being stuppid by paying out cash all these years and will it be ok or is it very difficult makeing the switch...HELP...
     
  2. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Posts: 1,415

    How will it eat at your bottom line? You will just have to purchase checks to pay your employees. Unless you were not paying the half of the taxes towards the employees FICA etc. If you are running an illegit business it can run into a brick wall if any official finds out. I would begin now to get your business in the right direction.
     
  3. MikeGA

    MikeGA LawnSite Member
    Posts: 101

    On your books, How were you accounting for the wages you were paying out. Were you deducting them from your gross wages, or were you paying personal income tax and ss tax on it?
     
  4. smithf36

    smithf36 LawnSite Member
    from Indiana
    Posts: 61

    I suggest getting with an accountant and going over the numbers. I would start paying it legal. It will cost you more, sort of. Figure how much you paid your help in cash. Then figure that you could have deducted that amout as an expense and not have paid taxes on all of that $$$. It didn't take long for me to realized that what I trying to save, actually cost me a little more by not being able to write it off. That's just the way I look at things.

    Joe

    [Edited by smithf36 on 03-02-2001 at 11:42 PM]
     
  5. gway

    gway LawnSite Member
    Posts: 36

    lonestar~

    sorry i didnt meen eat my bottom line what i meant was i pay myself and my partner by check and we deduct the correct $$ but when it comes to my employees weve always paid cash and now i wanna get on the straight and get them in the books but i was worried about all the deductions and my partner is afraid of all the $$ well be paying out in taxes!! ex: if an emp makes 500 in a week what is the amount approx that well be taking out and paying in taxes for all 7 emp.??
     
  6. gway

    gway LawnSite Member
    Posts: 36

    OK...one more thing...what if these emp do not have ss# to my knowledge. if they do present them to me most likely they me be from some guy out in ohio or something...do they need ss# for them to be on my books ??
     
  7. MikeGA

    MikeGA LawnSite Member
    Posts: 101

    What kinda business setup have you and your partner got? a partnership, corp, etc? I would get with an accountant because I think the wages your employees are getting boil down to being taxed at your business level (by not being deducted from the business income)or at the employee tax level.
     
  8. OBRYANMAINT

    OBRYANMAINT LawnSite Senior Member
    Posts: 555

    yes you need some info on them and part of it is the ss# wont really cost you more in dollars just your time in more paper work which is actually more dollars... i agreee with others go see acct one with experience with similar business ask other scapers in your area who they use
     
  9. LoneStarLawn

    LoneStarLawn LawnSite Bronze Member
    Posts: 1,415

    It will cost you more money...you will be paying taxes on them. But you need to become legit. If they are illegal immigrants I would suggest getting legal workers. I think someone posted that each employee would cost you about 35% more (includes taxes etc). So if his/her wages is $10 then your total cost would be $13.50.

    [Edited by LoneStarLawn on 03-03-2001 at 12:25 AM]
     
  10. awm

    awm LawnSite Gold Member
    Posts: 3,354

    For real he is just doing what some in all trades do.I know one who pays part in pot.If its a day job or temp thing
    hes paid and I DONT KNOW HIM.But for regulars I just
    dont need to worry that much.Do those right.
     

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