Hiring first employee Help?

Discussion in 'Business Operations' started by johntx14, Mar 27, 2012.

  1. johntx14

    johntx14 LawnSite Member
    Messages: 18

    I need to know what the legal process for hiring an employee. Do i need workmans comp? how do i obtain it? Taxes? Havent a clue what i need to do. I still have time just trying to prepare for down the road. Oh yeah i'm in the state of Texas if that matters. Any info would be much appreciated.
  2. MV Property Care

    MV Property Care LawnSite Member
    Messages: 169

    I don't know what state you live in, they might be different. I live in Pennsylvania. You have to have workman's compensation Insurance and make all the necessary tax deductions including unemployment and social security. I like you was overwelmed and did not want to use quick books because it would be a learning curve and I didn't want to screw it up. I contacted a payroll company called Pay time. They are very helpful. They told me what I needed to do. I first had to get workman's comp insurance. You can go through a broker, but you should get a better deal with the insurance company that has your liability insurance. It goes by the estimated annual payroll you will be employees will be making. Usually it's about $800-1200 premium for every $10,000 in payroll.

    Next as soon as you hire an employee you have to go to the sates's goverment website and apply for a tax withholding number and a unemployment witholding number. There is a reason why you don't want to have the numbers before you get employees but I forget. If you don't already have one you will probably need an Employer Identification number. You can be a sole propriortor and use your SS# if your not a LLC or sometype of Corporation.

    The payroll service recomended that I use direct deposit since I didn't have a physical address other than my place of residence. I don't have a shop where there is a person there all the time.

    The paroll service charges about $30 a week wich is awesome, they take care of everything and they will have all tax documents at the end of the year.

    Google payroll services in your area. Hope this helps
  3. johntx14

    johntx14 LawnSite Member
    Messages: 18

    Thanx that was a tremendous help. I always try to plan ahead and this really helps. Hope you have great success.

  4. ed2hess

    ed2hess LawnSite Fanatic
    Messages: 14,546

    Just try to keep it simple. Pay the guy keep the taxes out and send them to the IRS. Give him a form at the end of year showing his wages and the taxes you took out. If somebody has a problem with that they will tell you and you can make adjustments. It is going to hard enough just trying to find somebody to work for you. Most of the people will want cash and no reporting so get ready.
  5. McFarland_Lawn_Care

    McFarland_Lawn_Care LawnSite Bronze Member
    Messages: 1,445

    IMHO have someone else do it for you, ie. your accountant or tax company or a payroll company. The peace of mind and less paperwork for you is well worth the small amount you pay for this service. You need to be out making sales and working on developing your business, not filling out paperwork to send to the state and fed. That's my view and I've been very happy doing it that way.
  6. McFarland_Lawn_Care

    McFarland_Lawn_Care LawnSite Bronze Member
    Messages: 1,445

    OH, and good luck and congratulations on your first hire and doing it the right way!!! Nice work...
  7. BestImpressions99

    BestImpressions99 LawnSite Senior Member
    Messages: 491

    Well the question you have to ask yourself is whether you're going to hire a subcontractor (1099, no workmans comp or taxes needed) or do you want a legitimate employee.

    If you want a legitimate employee you need to become licensed and insured, then you need workmans comp. I agree with McFarland, let you accountant or business help do the paperwork.
  8. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Messages: 7,961

    Having an employee opens a whole can of worms that you can not cirumvent by going the 1099 route. Many do go that route and never have any problems but it is not the correct way.

    The cost per employee is high but you may look at a payroll service to do everything for you. Many times your bank will offer this service through a company like paychex. This is the best way starting out. These services often include WC and handle all of the taxes including suta/ futa.

    You do not have to have Workers Comp in Texas. However, you are subject to 100% of the liability and disability claims without limits.

    You do need to report new hires to the state atty general too. Something about about dead beat dads.

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