payroll service

SkwerI

Treehouser
Joined
Sep 6, 2006
Messages
19,276
Location
central Florida
For the majority of my career I've worked as a sole proprietor/ subcontractor. First as a freelance climber, then as a freelance bucket truck operator. As most of you know, last year I finally decided to hire my first employee and operate as a complete tree service. I bought a chipper and chip truck and have continued to grow my own business while still doing the occasional bucket work for other tree guys.

I began paying my help just like I've always paid occasional help, cash with no real records. Since the beginning of the year I have recorded how much I've paid him in cash but not taken out any taxes. I'm not concerned with my cost or exposure in the least, so let's not go off on that tangent. I operate as a sole proprietor and pay my taxes quarterly. I will not draw a paycheck as I am the same entity as the business. My concern is for my employee and what he will face come tax time next year. I am not willing or able to manage all the paperwork and calculations and reporting required to handle payroll myself. I have done some brief Google searches on local payroll services and am looking for feedback on what I should be looking for.

I've spoken with one payroll service so far. Local, 4-5 positive reviews on Google and the cost seems very reasonable. They want $50 per month plus $10 per quarterly report and $35 plus $3.50 for each W2 at the end of the year. They offer direct deposit. Seems like a very good deal IMO.
 
How will that work? Do you pay them and they pay the employee? Do they withhold taxes? The cost seems very reasonable.
 
The company I use does all of the paperwork, tax withholding, and provides Worker's Comp insurance. Basically, I send them the hours worked every Monday afternoon for the previous week; they deduct the funds from my bank account on Thursday and direct deposits are received on Friday. The Worker's Comp rate is 17.8%, which is much lower than I could get on my own. The administrative cost for this service is about 4%. It's worth every penny for not having to deal with the bureaucratic nonsense.
 
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I have never wanted to do the W.C. thing just because of my previous experiences with them over the last 35 years but if I can get coverage for my employee that cheap then I most definitely will. I am really amazed at just how productive we are as a team compared to me working by myself. I'm grossing 3x as much as I was a year ago so I'm willing to pay a few dollars for his coverage in exchange for that.

I will sit down with somebody on Monday to go over everything and get it set up. Just looking for input on what to expect and what questions I need to be asking. Thanks Brett and Fred, keep it coming.
 
I can't help with advice at all, Brian. But I sure like hearing of the increased volume of work you are getting done with the hired help.

:thumbup:
 
WC aint cheap but its gold when you need it. Don't let your past opinions color the importance of it. You can opt of coverage and just find a disability policy for yourself in case shit gets ugly
 
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Well the company I was hoping to use left me a message today. They need a Federal taxpayer ID, not just a SS number. In other words, they will only work with you if you are incorporated. I've been a Sole Prop all my life and have no intention of incorporating now. All of the so-called benefits are to benefit the government and the accountant, not the owner. I am not willing to put my name into another 2 dozen government databank lists just so I can use a payroll service. I'll just have to keep looking and make sure my first question is "Can you work with a Sole Prop who isn't incorporated?"
 
Do you not feel concerned for your house, etc, in case of a negligence lawsuit?

Being owner-operator, you could control as close to 100% as possible. Now you have an employee moving 10,000 pounds of steel or more down the road.

You really think most people that incorporate made a mistake?

In your case of no dependents IIRC, if something happens to you, the whole operation is closed, not a big deal. For people who would have survivors, the survivors would have a sellable business if incorporated, not just equipment, as is the case with a sole proprietor.
 
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No I have never been nor will I ever be concerned about a negligence lawsuit. This is the biggest argument people use to incorporate. This is also not the topic of this thread. I wish to discuss payroll services, not incorporating. If you wish to discuss incorporating, please start another thread.
 
Brian, before you stop with that one company check just a bit more. Aside from using a social security number there is another business tax number designation. And it is without incorporating.

EIN - Employer Identification Number with the IRS. (Form SS - 4 ?)
 
Does the payroll-service group employees together to able to afford this rate for WC through a private insurance company? Is all WC through private insurers in FL?
 
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Brian, before you stop with that one company check just a bit more. Aside from using a social security number there is another business tax number designation. And it is without incorporating.

EIN - Employer Identification Number with the IRS. (Form SS - 4 ?)
Thanks, Merle. I'm googling it now.
 
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Brian, before you stop with that one company check just a bit more. Aside from using a social security number there is another business tax number designation. And it is without incorporating.

EIN - Employer Identification Number with the IRS. (Form SS - 4 ?)
Thanks, Merle. I'm googling it now.

Edit: They want a Federal ID as well as proof of federal and state unemployment taxes (RT6?). I've had enough, going to walk away from this mess. They may claim to have a rate for small employers with 1-3 employees but they damn sure want all the same requirements as a big corporation. I obviously called the wrong place.
 
The Tax Identification Number(TIN) is the same thing as an Employee Identification Number(EIN). Brian, if you have an employee, you are required to have an EIN. You don't have to incorporate; you can get one as a sole proprietor.
 
Yup. I carried wcb on employees as required here by law, but opted out for myself which was allowed. I could purchase private accident insurance that covered me 24/7 for way cheaper than compo for just at work.
 
maybe a bad question to ask.......are you with holding taxes? 1099 aint an employee. You certainly can find just an accountant to do it for you......but you will need the EIN number, and they will dang for sure follow the rules. A 1099 is a sure way to get an audit
 
Like it or not, when you hired an employee, you took on the responsibility for someone besides yourself.

Sounds like the first step on the road to becoming a socialist:D
 
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