Payroll.. let's shed some light.

Discussion in 'Business Operations' started by bigjeeping, Mar 14, 2006.

  1. bigjeeping

    bigjeeping LawnSite Senior Member
    Messages: 903

    I would guess that 50% of the members on lawnsite have payroll set-up, have legal employees, deduct taxes, pay workers comp, social security, unemployment, etc.

    So let's shed some light and see why people people have and haven't gone the "employee-route"

    You may think that using 10-99 is ok, but it's not. If someone is routinely working for you, using your equipment, and you're in charge of them - they're an employee and the IRS sees them as an employee.

    My accountant is setting up my payroll when he's done with :dizzy: TAX SEASON :dizzy: but we didn't have much time to talk about the details, because obviously taxes were what we had in mind.

    So what are the details of having employee payroll - how much does it cost the LCO? How much can I expect to pay in social sec and unemployment.

    In a nut shell.....Is it a real ball buster?
  2. z_clark

    z_clark LawnSite Senior Member
    Messages: 369

    I use quick books and it makes it very simple. You can pay your taxes via the federal website: . We make monthly deposits, but it depends on the amount owed for how often you make deposits.

    I don't think calling employees "contractors" is the way to go....think if the auditor thought other wise.....You could be liable for %100 of all back taxes, plus possibly your employees taxes, on top of interest and late fees! YIKES!!
  3. LB1234

    LB1234 LawnSite Gold Member
    Messages: 3,208

    I use ADP and it works just fine. They are responsible for all employment taxes and the filing crap that I don't have any desire to deal with. Its pretty easy. ADP charges me somewhere around 30 bucks to process the payroll...which I do every two weeks. Teh ncall my phone, I tell them the hours, they have the check at my doorstep the following day. Not bad.
  4. Lawnmasters

    Lawnmasters LawnSite Member
    Messages: 180

    As far as what you are supposed to hold out: In my area I hold out 6% for SS, 1.45% for Medicare, these we hold out, and match the amount. The employee designates how many dependants, which tells us how much to hold out for withholding. This we do not match. I have to hold out 10% for state Unemployment, employee pays nothing in on it. Then, my liability insurance is based on how much payroll I have.

    every time I hear " I need a raise" I want to scream.

    A $7.00 employee will cost more than $10.00 by the time your done, just increase the amount for your average wage.
  5. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Messages: 7,547

    How do you figure this? Social security is 6.2%, and midicare is 1.45%, so that comes to 53 cents. Why make things sound worse than they really are?
  6. Howard Roark

    Howard Roark LawnSite Senior Member
    from Texas
    Messages: 805

    I would have to say your 50% is way off the mark.
  7. mslawn

    mslawn LawnSite Senior Member
    from LA
    Messages: 483

    Add in worker comp, unemployment, liability usually goes off payroll. Then add in the heavy periods of work when they hit time and half - it is costly.
  8. 6'7 330

    6'7 330 LawnSite Bronze Member
    Messages: 1,821

    Unemployment will all come out of your pocket.Because you are a new employer, and you don't have an employer experience rating, the state will set a new employer rating. Workers comp will be based on payroll, and come out of your pocket.You are required to pay 6.2 SS and 1.45 Medicare and your employees contribute the same amount.And then there is time and half etc etc .

    Welcome to the world of employing workers lol.
  9. bigjeeping

    bigjeeping LawnSite Senior Member
    Messages: 903

    wahhhh...... is it worth it?
  10. Littleriver1

    Littleriver1 LawnSite Senior Member
    Messages: 811

    It's an investment in your company just like purchesing a new mower or truck. The only way a new truck is worth the investment is if you put it to good use and it makes money for you. If you buy the wrong truck and you get screwed, you move on and buy another truck that you think will do the job. Employees are a pita. When you were an employee, you were a pita. It is a law that all employees are a pita. Like gravity is a natural law. The only way an employee can be considered worth it, is if they make money for you at the lowest possible cost. How many new customers do you need just to pay for the employee. If you have 50 customers and you think you need 10 more just to pay for the new guy, then when you get 11 customers you will be making money. Every thing over 11 is gravey. Just keep adding customers untill the new guy is dead or quits. Your selling the employees time. The problems start when you get over extended and the new guy quits. It is wise to have a plan B. Like a second person, like a part time person that wants to be full time. A person on a string. Some find this process the worst part of business and others find it the best part. Empolyee, employer relationships very rarely work well for long periods of time. Don't get too used to the new guy. Get used to looking for a new guy. It seems that every one is always looking for a new guy. After a while of selling an employees time it starts to get interesting. The concept of making money by selling someones time. I love free enterprise. It is an exercise in business management. Very few succeed in business on the first try. Many do restarts, some more than twice. The first employee may not work out well but that doesn't mean not to retry. A good business manager manages all the parts of the business. This is not a bridge that you will be burning behind you when you cross it. If it doesn't work out or you find that you don't have the management skills to deal with, then back out of it untill your more prepared. It's a hole new world. Only you will know if it is worth it.

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