You’re busy. Your business is growing. You’re thinking it’s time to hire someone to take care of a few things you’d like to have off your plate. But how do you pay employees and does it effect taxes?
Paying employees may seem like an easy task, but you want to make sure you’re spending your money wisely and staying within legal guidelines for small businesses. Here are a few tips to keep you on track:
- Know the market. Set an upper limit of what you’ll pay based on what a particular job is worth to you and set the lower limit based on what the market standard currently is.
- Consider trading services or intangibles. Lets say you’re looking to find someone to work on your website or put together a new logo and business cards for you. You might want to see if the person you’re hiring would like to swap services instead. As a blogger, you’re more than likely a good writer, and you never know – they may really be needing some new marketing copy or even some ad space to promote their business.
- Keep taxes and employee status in mind. Once you hire an employee, you’re generally required to withhold money from their pay for income tax purposes regardless of if they are paid hourly or on a salary basis. That may still be the way to go, but you may want to consider using them as an independent contractor instead. Independent contractors are self-employed individuals who sell their services to clients. They aren’t considered an employee, but a business owner themselves so they’re responsible for taking care of their own taxes.
- Offload payroll responsibilities to an expert. Keeping track of paychecks, employee hours, and withholding employee taxes can take up a lot of extra time. Stay focused on your blog and leave the accounting to payroll to an expert.
Keeping these 4 easy tips in mind will make hiring and paying employees that much easier – now back to the blogging.
To learn more about accounting for bloggers, visit these posts: