Tryin to hire my first employee

Discussion in 'Business Operations' started by CK82, Mar 18, 2007.

  1. CK82

    CK82 LawnSite Member
    Posts: 231

    I am looking to hire my first employee, I am going to place an ad in the local paper and should be able to find someone. I have a few questions regarding employee fees and insurance and such.

    1) Will I be paying in a lot of money towards social security, workers comp, etc? Say I pay $13/hr. will I be paying the social security and workers comp on top of that?
    2) Do you have a company do payroll for you or is it done by your own company. If its done by your company do you have a software program to do so.
    3) Can I have someone work for me as a subcontractor (1099) and be able to legally have them use my company vehicles and equipment.

    4) If so do I have them under my insurance?

    Any knowledge regarding employees and these questions would be very useful!!
     
  2. newz7151

    newz7151 LawnSite Silver Member
    from Tejas
    Posts: 2,419


    1) Yes
    2) If you've only got one employee, it will probably be easy enough to create a simple spreadsheet to calculate this for you.
    3) NO
    4) N/A due to response to 3.
     
  3. PTP

    PTP LawnSite Bronze Member
    from Tulsa
    Posts: 1,383

    Generally speaking, you can add about 20% to an employees gross and that will get you in the ballpark of what their true cost is - workers comp, social security, etc.

    You really need to see a CPA about these issues. If you mess up with these things, it will cost you a lot down the road. If you mess up with some things you will be personally liable - not just the business. Having a good CPA will save you money and headaches.
     
  4. procut

    procut LawnSite Bronze Member
    Posts: 1,853

    1. Depends on how much you consider "a lot"

    2. I do my own payroll by hand. Figure out SS FICA (6.2%) and MED FICA (1.45%). The federal and state witholdings come of charts. I use an accountant to file the quarterly reports W2 ect.

    3. No, this has been discussed over and over on LS.
     
  5. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501


    1. Add 11%
    2. I use a payroll service that offers direct deposit of emplyee's checks
    3. Absolutely not
    4. Anyone working as a sub must submit their own insurance
     
  6. CK82

    CK82 LawnSite Member
    Posts: 231

    Ok so if they (subcontractor) has there own business insurance and vehicle insurance, can they use my equipment and vehicle? Obviously if they had an accident of some sort then there insurance would have to cover this?
     
  7. newz7151

    newz7151 LawnSite Silver Member
    from Tejas
    Posts: 2,419


    NO!

    http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

    And make sure you read this statement at the bottom really well:

    Misclassification of Employees

    Consequences of treating an employee as an independent contractor. If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker. See Internal Revenue Code section 3509 for additional information.
     

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