there is no way to answer this, without knowing more about you, your situation(income, expenses, equipment) but most importantly talk to your CPA. go and have a talk with your cpa. have a nice long talk. if your cpa ca not tell you what your benefits would be go find a new cpa. i hate to say this, but you need a good cpa that knows the loopholes. he will be worth his weight in gold. as an employer you will get certain tax breaks, other wise unavailable to you without employes. you can also deduct what you pay him and his taxes you pay for him, as well as wc. paying under the table will not get you some tax breaks. it will save you a lot of time with payroll. do you have any commercial properties as they require workmans comp for employes. residential clients will not ask you for wc, they most of the time don't even ask for insurance. when i was smaller under 60k paying under the table was better. but after that i went official with payroll. if you do hire them legally it will be harder to fire them, unlike paying under the table.