I’m not saying that people don’t deserve a living wage, but when you add that to the cost of employee taxes, benefits, insurance and all of the risks that companies take on by hiring staff, it’s no surprise that in this economy, small business owners are thinking twice about it.
Here’s a short list of what you can expect to pay/file/provide:
- Withhold Federal income tax from the employee’s salary.
- Withhold Social Security and Medicare taxes (know as FICA–Federal Insurance Contributions Act).
- Pay an amount equal to 1 + 2, above.
- Pay federal unemployment insurance (from the Federal Unemployment Tax Act/FUTA)
- Pay state unemployment insurance.
- Pay state disability insurance.
Optional, but sometimes provided:
- Health insurance coverage (medical, dental, vision, prescription)
- Paid vacation days
- Paid sick days
- Paid personal days
- Fringe benefits
Then you have all of the personnel and “is the employee a fit?” issues to consider when actually making that hire. For more information on that topic, have a look at the article I wrote recently for The EMyth Insider, “How to Hire Employees Safely.” Don’t forget to click on the link to get your free copy of my special report, Top 10 Reasons Employees Get Fired.
This entry was posted on Thursday, March 26th, 2009 at 2:27 pm and is filed under Business Planning, Employees. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.Leave a Reply
