Prepare to hire your first employee
Dear FSB: I am opening a new office. What documents should I prepare the necessary first to praise your employees?
– Denise Haney, Orem, Utah
Denise Love, documents, you need depends on what kind of people you plan to rent, according to Ken Fakler, director of the SBDC in Orem, Utah.
In the eyes of the IRS, there are two types of employees: the regular and independent subcontractors. If you decide to hire independent contractors, “to ensure that they are considered as sub-contractors and not as employees, and you have lower taxes, Fakler said.” IRS rules very specific on this subject, that you do not pay, they can by the hour. “Arrival at the IRS, before you decide, because it takes you back, and invite you to come back for taxes, if they recognize that your evtl real, and not an employee of a subcontractor. Throw yourself on the website of the IRS, in which the fundamental differences between independent contractors and employees as well as links to more ” information.
Even if you do not have to pay pension benefits to part-time workers regular employees, Utah, the state requires that the installation file of documentation and payment of benefits for workers in the insurance disease each employee, full time or part time, “your kids,” Fakler. “The only people that you do not have to pay the owners of the business,” said Fakler. “They are not obliged to take out medical insurance for workers, but if your company does not offer this benefit, most insurance classify an employee who works 29 hours or less of” part-time “, says it.
Employees and taxation
In Utah County, the employer is obliged by the Confederation and the authorities of taxes, FICA and Medicare deductions from employees. “You have to pay seven percent FICA (Bundesanstalt für Arbeit Contributions Act taxes, the payroll tax) for employees, Utah and unemployment taxes. It can be between a half percent to eight percent of the total payroll. This can be very, very expensive, “he said.” Employees are expensive. Keep in mind that what you pay workers, you add another 15-30 percent for taxes and social benefits, and that is what it costs to the employer. ”
Once you hire an independent party, they complete a W9 keep on file, Fakler said. At the end of each year, copies of 1099 sent to subcontracting and the IRS. Employees must underway W4 forms, access to its deductions and exemptions. At the end of the year, you with a staff member W2. This implies an annual salary of the employee and the amount of taxes from its settlement cheque. The SBDC Orem Office document prepared packages for employers who are willing, employees and subcontractors. “They contain all that is the tax forms the backdrop and other forms of testing,” said Fakler. “Either you go to the state’s Web site and file,” says Greg Panic Hello, Utah State Director of Small Business Centers. “Here you will find information on unemployment insurance and taxes on the website and actually recording new people. It is a powerful tool. Utah is a business-friendly.
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