I am looking to hire this kid as an assistant and I am trying to figure what all the extra stuff will cost if I put him on payroll (insurance, worker’s comp, all that fun stuff). I have always just 1099ed people so I can’t even guess.
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We always figure an additional 25% of their salary and that's just for your half of social security, Medicare; FIWT and L&I. Does not include any fringe benefits.
Pretty ugly hugh!?
Regards,
Mack
"WISH IN ONE HAND, #### IN THE OTHER AND SEE WHICH FILLS UP FIRST"
"this kid" How old? Just curious.
.062 X Gross = Social Security
.0145 X Gross = Medicare
L&I (worker's comp): no doubt a biggie, check with your state. Federal Witholding not a factor, because that's money you keep out and send to the IRS. Doesn't come into effect with small paychecks.
Don't be late on your quarterly paperwork and tax payments, or it'll cost you a bundle. The joys of filing all that stuff: priceless.
Be careful with those 1099's -- make sure the folks you put in that category actually qualify under all the IRS requirements.
forestgirl -- you can take the girl out of the forest, but you can't take the forest out of the girl ;-)
Another proud member of the "I Rocked With ToolDoc Club" .... :>)
Good advice so far.
Don't forget to check unemployment tax rates in your state. Back when I was still paying people, it was beween 3 & 4% here, but it varies widely from state to state.
As to insurance, you'll have to get a quote on Workman's Comp. It can be very expensive. Having an employee may affect you hazard and liability rates, too.
Even if you can join a trade association or industry group, be sure you're sitting down when you read the health insurance quote. Again, rates vary widely from state to state and with the age of the insured, but they are all high, thanks to defensive medicine and other factors. I'm thinking about going to a vet, myself.8)
Michael R
You reply should go to Joshua. But your unemployment rate shocked me. whoa! 3-4%? Ours here in Washington is in the thousandths, not hundredths. forestgirl -- you can take the girl out of the forest, but you can't take the forest out of the girl ;-)Another proud member of the "I Rocked With ToolDoc Club" .... :>)
Sorry about the address......
Like I said, they vary widely 8)
During the twenty-odd years I was paying people, it ran from about 3.2 to 3.7%. Paid by the employer, not the employee, and of course included about 1% for the Feds, if I remember right.
I didn't pay real close attention to it because it wasn't something we could control except by keeping a good experince rate. Just checked it every time I updated costing formulas.
I'm curious, if your unemployment rate is around 5 or 6% and the tax is less than 1%, where does the state get the $$$$?
Michael R
I know next to nothing about how the UI works. Maybe the experience rate is what keeps mine down next to zero. Sorry I can't help you on that one!forestgirl -- you can take the girl out of the forest, but you can't take the forest out of the girl ;-)Another proud member of the "I Rocked With ToolDoc Club" .... :>)
In the water pump/ well drilling business, we have to charge about 2.5 times a new hire's hourly rate in order to break even. Most of this is because of all the lost time in teaching them how to use tools. If the fellow is familiar with tools, and better yet, has some idea how to organize a job and get something accomplished, 2 times his wage pays for him. However, just paying for a fellow doesn't help your company grow.
there has to be an easy way to set all this stuff up.
I use Quickbooks. You could probably use some help setting it up, but it's real easy to use once you have it.
Michael R
Good gouge on Quick Books! Get PROFESSIONAL help to set it up for you and show you which buttons to push and when. After that, all you have to do is make enough money to pay for everything.
Mack"WISH IN ONE HAND, #### IN THE OTHER AND SEE WHICH FILLS UP FIRST"
A big AMEN on getting help with Quickbooks. - lol
Last year, my wife and I started our businesses and - after hooking up with a CPA - got into Quickbooks in mid-July. He showed us some basic stuff and away we went. I've spent the last two days getting things organized for taxes and it's been a crash course in how to REALLY use Quickbooks - lol Now, I'm wishing that I had taken one of those two day courses instead of wasting my time hustling work. - lol
Like someone once said (or should have) - "This country doesn't need a fountain of youth, we need a fountain of smart"!
Dave,
Quick Books is an incredibly vast and powerful program. I've been using it for almost 7 years and I'm probably using one percent of it's capability!! Then again, I'm not real "computer friendly"! LOL
Mack"WISH IN ONE HAND, #### IN THE OTHER AND SEE WHICH FILLS UP FIRST"
My goodness, you guys, he's talking about one employee. The expense and aggravation of setting up Quick Books is way overkill. Unless, of course, getting everything else in the business set up that way is something that's wanted anyway.
PS: I use Quicken to do my "books" with. I just name the categories the same as the categories on the Schedule C of the federal tax return. I enter my checks and debit card charges, using the categories to name each expense. I'd have a separate "register" set up for credit card charges if I actually used a credit card. At the end of the year, I simply run a report that gives me the totals for all the categories.
Obviously, this wouldn't work for a large, complicated business, but Quick Books can be overly complicated for many smaller applications.
forestgirl -- you can take the girl out of the forest, but you can't take the forest out of the girl ;-)Another proud member of the "I Rocked With ToolDoc Club" .... :>)
Edited 2/25/2005 7:01 pm ET by forestgirl
If you're only going to have one employee, you really don't need a program to do it. I used to have 5-8 people working (part-time) and it was a headache, used QuickBooks. But with only one employee, it's as basic as basic can be. Just make up a time-sheet form or buy a pad of them at the office supply store. Every quarter, you'll get your state and federal forms. The calculations are easy. Fill 'em out, make copies and staple it all together.
For instance, if my current employee works 20 hours and makes $200, this is all I have to do:
$200 x .124 = $24.80 (FICA or Social Security)
$200 x .029 = 5.80 (Medicare)
$200 x .0040 = .80 (Unemployment Insurance)
20 hours x .048= .96 (L&I or Worker's Comp)
I made up the percentages for Unemployment and L&I, but you get the drift. There are only 4 calculations to do. The deductions from the paycheck are just as easy. If it seems complicated, I could make a form for you.
forestgirl -- you can take the girl out of the forest, but you can't take the forest out of the girl ;-)Another proud member of the "I Rocked With ToolDoc Club" .... :>)
Edited 2/24/2005 2:39 am ET by forestgirl
are those figures what I pay in addition to or what I take out?
I decided that if I ask another question, i'm getting an accountant.
Edited 2/24/2005 8:31 pm ET by joshuajones
My wife is a CPA. She suggests that a payroll service is the best way to handle payrolls.Don't forget you have quarterly and annual reports to the governmant. The payroll service will do those on time for you.
Those figures are what you put in when you fill our the quarterly tax forms. Drop me an email (click on my name above) and I'll send you a note and a form you can use if you want.forestgirl -- you can take the girl out of the forest, but you can't take the forest out of the girl ;-)Another proud member of the "I Rocked With ToolDoc Club" .... :>)
IRS Publication 15, Circular E, Employer Tax Guide . . . . everything you ever wanted to learn about employment tax.
Online here:
http://www.irs.gov/publications/p15/index.html
Actually you can pick through there and read up on just the things you need. Tables included! Enjoy.
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