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Robert86

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Bidding a Super Market that will need 7 days a week cleaning so I will be hiring my first employee (if I get the bid) which means I need to figure out payroll. I'm trying to decide if its worth hiring someone to do it or should I do it myself? If you do it yourself what programs do you us? Also, what do I need to consider into an employees hourly wages other than what I'm paying him per hour (worker comp and such).

This is new ground for me, I've managed a lot of people but never employed people. Whatever advice you can give me is is appreciated.
 

PhilipW

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Scott W

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Income tax, social security, medicare will be the same regardless of if you do the work or an outside company like Paychex does the work. It has been a while since I did tax accounting, but I think the portion the employer pays is about 7.65% of the gross pay. Additional payroll taxes are deducted from the employee portion.

Workman's compensation differs by state, by the type of work done and by experience. Be sure you define the employee's work responsibilities in the best situation for you as long as it is accurate. For example, in one state, the cost for "janitorial services" is less than floor stripping. If you employee will be doing more than floor stripping, move him into the janitorial category.

If your company has a good safety record, your cost for workman;s comp can do down after 3 (or more) years.

Unemployment compensation also varies by state, by the fund balance in the state and by your business history. Likely cleaning service will start around 2.7 to 2.9% of payroll. But check with your state. The rate can go up or down each 6 months as the influencing factors change.

You will either have your own time to do payroll calculations, reports (probably one to state and one to federal each quarter) or expense for an outside company to do the work.

We generally figured an extra 15% for taxes and related fees.

You may also decide to provide holidays off or extra pay for holidays, vacation and such for your employee. Maybe other benefits as well.
 
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Robert86

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Quickbooks has a payroll service, has anyone used it or have any feedback on it? I'm looking at getting quickbooks for my book keeping so if their payroll service is a good service then I might just do that too.

I was able to get a lot of information just calling a local CPA office and speaking with someone. My cost of having an employee won't be as much as I was making it out to be.

Workers Comp will be about 2.5%
Social Security 6.2%
Medical 1.5%
Unemployment $45 per year
Other taxes and fees 20% should be a safe estimate.

So now to figure out what to pay. I'm actually thinking of paying a flat rate per night. $100 for one, 6 - 8 hour night (scheduled for 8 hours but the work can be completed in 6 so I would require at least 6 hours for their scheduled night). So downsides are I could save money by paying hourly and I chance that some guys will do a crappy job to get out sooner and they'd still make $100. So a well written contract and good management of my employees is necessary to mitigate this. But these two issues aside, what are some other drawback to paying like this for this type of work?
 

Common janitor

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I use an accountant. Not good with numbers.
I agree . I'd have my accountant do it . Good luck with hiring someone .
Around here the biggest stumbling blocks are these .
1 . Can they pass a drug test .
2. Will they come to work .
3. Will they show up ON TIME .
4. Will they ACTUALLY WORK .
Lady that owns a construction company was in the paper talking about this .
Trying to hire labor for pipeline work , sewer line installation . Paying $17 hr. TO START and a benefit list as long as your arm . Trouble getting help all the time .
All the Best , Ed
 

Robert86

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I agree . I'd have my accountant do it . Good luck with hiring someone .
Around here the biggest stumbling blocks are these .
1 . Can they pass a drug test .
2. Will they come to work .
3. Will they show up ON TIME .
4. Will they ACTUALLY WORK .
Lady that owns a construction company was in the paper talking about this .
Trying to hire labor for pipeline work , sewer line installation . Paying $17 hr. TO START and a benefit list as long as your arm . Trouble getting help all the time .
All the Best , Ed
I think those are the stumbling blocks everywhere. Especially when you're looking for someone to work nights. You're almost asking them to give up their life.

That's why I don't want to schedule guys for more than 4 days a week. Give them a chance to recoup and see the daylight a little. A company I work with did that about a year ago and has had productivity go up, turnover has dropped, and people just seem happier.
 

SRD

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Also waay illegaler. Good luck if you ever get audited. And if you have a 1099 employee that audit is coming
Why exactly would it be illigal? Personally I've never had 1099 workers unless I subbed another contractor but I know alot of business owners in alot of different Industries that are friends of mine tow truck drivers, carpenters, plumbers etc that 1099 their workers to my knowledge most never been audited and some have been in business 20+ years. Couple of them have been audited and it never came up. Never heard of it being an issue. My understanding its determined by how much control a person has over their work? Why would their industries be different from ours? Not trying to be an ass just curious
 
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SRD

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I've always used quickbooks payroll in the past I already use it for invoicing, sales tracking and its pretty easy to work with it also updates when payroll tax changes
 

Robert86

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Why exactly would it be illigal? Personally I've never had 1099 workers unless I subbed another contractor but I know alot of business owners in alot of different Industries that are friends of mine tow truck drivers, carpenters, plumbers etc that 1099 their workers to my knowledge most never been audited and some have been in business 20+ years. Couple of them have been audited and it never came up. Never heard of it being an issue. My understanding its determined by how much control a person has over their work? Why would their industries be different from ours? Not trying to be an ass just curious
I could be wrong here but I believe the issue is that 1099 workers are subcontractors and if you are hiring guys but then using a 1099 and calling them subcontractors to pay them, when they aren't... I think that's the problem with that idea.
 
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Common janitor

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Why exactly would it be illigal? Personally I've never had 1099 workers unless I subbed another contractor but I know alot of business owners in alot of different Industries that are friends of mine tow truck drivers, carpenters, plumbers etc that 1099 their workers to my knowledge most never been audited and some have been in business 20+ years. Couple of them have been audited and it never came up. Never heard of it being an issue. My understanding its determined by how much control a person has over their work? Why would their industries be different from ours? Not trying to be an ass just curious
All I can tell you for sure is my accountant sent out a serious sounding warning about 1099 workers and advised a sit down meeting if any of her clients had them or were thinking about it . No employees , no worries .
All the Best , Ed
 

PhilipW

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Here's a simple test to see if you may be able to 1099 an employee (a subcontractor). Note this doesn't cover every case but, these questions are a start

1. Do they provide their own equipment and tools
2. Do they set they own working hours and schedule
3. Do they carry liability insurance and workers comp for themselves

If you answer no to any of these 3 questions, they cannot be classified as 1099 subcontractors.
 

Scott W

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Here's a simple test to see if you may be able to 1099 an employee (a subcontractor). Note this doesn't cover every case but, these questions are a start

1. Do they provide their own equipment and tools
2. Do they set they own working hours and schedule
3. Do they carry liability insurance and workers comp for themselves

If you answer no to any of these 3 questions, they cannot be classified as 1099 subcontractors.
The exception to the above questions would be a worker whom you pay $600 or less in a calendar year. If that is all you pay them, it is reasonable that they also work for other people or for themselves at other times. Basically looked at as not a regular employee since such a low amount.
 

PhilipW

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The exception to the above questions would be a worker whom you pay $600 or less in a calendar year. If that is all you pay them, it is reasonable that they also work for other people or for themselves at other times. Basically looked at as not a regular employee since such a low amount.
Correct Scott- anything under 600 you actually don't have to report at all if I'm not mistaken. Of course, it's a 600 dollar deduction if you report them as a 1099
 

Robert86

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The exception to the above questions would be a worker whom you pay $600 or less in a calendar year. If that is all you pay them, it is reasonable that they also work for other people or for themselves at other times. Basically looked at as not a regular employee since such a low amount.
Welcome back Scott! Hope things weren't too smokey while you were in Montana.