Full-time and Part-Time Employees and Taxes: No matter what the status of an employee (full-time or part-time), you as the employer are required to withhold payroll taxes (federal and state income taxes and FICA taxes) from all employees, pay for unemployment taxes and worker's compensation benefits.
A short story about treating hired help right. We all know how difficult it is to get a contractor now. Contractors cannot find reliable employees most of the time. In my county there is one contractor that stands heads and toes above the rest. He is a highly desired employer and contractor.
He pays his crews well. He throws them cash bonuses. He arrives for new jobs on time and finishes on time. He never struggles to find employees because he treats them very well. Everyone needs to keep this in mind when looking for caregivers. Treat them right and they will be happy to do their best for you.
In my area in Texas you can make $20 at a car wash or Amazon with full benefits. The LTC facilities and private hires cannot find workers at $20 per hour with hygiene tasks. So check your market rates or you’ll have constant turnover
It is best you outsource the payroll task and taxes to a payroll company liike ADP, PayChex, QuickBooks Payroll, ,or a certified payroll professional. Not all CPAs know how to handle payroll. They will do everything from A to Z for you from calculating, withholding and paying taxes, issuing paychecks or direct deposits, filing all tax forms on your behalf. You will pay a ssrvice fee to them. The money for payroll and taxes and fees will be taken out of your account directly.
The payroll company guarantees accuracy and will be liable for any errors. It is an extra cost but so worth it. You can sleep better at night and not worry about the IRS coming after you.
Currently, we're paying approximately $135 in payroll fee each pay period. Each tax quarter, we pay a little more for them to file the required tax forms.
Does that fee include your matching SS/Medi tax, state and fed unemployment and worker's comp?
Just curious because we thought it was high until we had to get a bond for unemployment, a minimum of 1,200.00 annual premium for workers comp and having to do monthly, bimonthly and quarterly payments and quarterly and annual filings. The fees were well worth it in the end and they even offered group health insurance, which we couldn't do.
Each state has their own labor and employment rules that apply to paid caregivers. I would check with your own state. If your caregiver is only doing "companion" aid, like keeping company, running errands, meal prep, light housework, laundry, etc. and nothing medical, it may be possible to consider them a contract worker, even if they are working full time. If it turns out they can be considered contract, then pay them in checks (or a way that creates a "paper" trail) and at the end of the year create a 1099 form for them and let them pay their own taxes. Otherwise, if you're a full-on employer, there's much more you have to do so I would research that and discuss with a CPA.
I would see a CPA. I worked as a substitute treasurer and did payroll. Every quarter I had to send SS (that u match), IRS and the State the money I deducted. There maybe be things u do not need to deduct like unemployment/disability insurance.
No matter what the status of an employee (full-time or part-time), you as the employer are required to withhold payroll taxes (federal and state income taxes and FICA taxes) from all employees, pay for unemployment taxes and worker's compensation benefits.
He pays his crews well. He throws them cash bonuses. He arrives for new jobs on time and finishes on time. He never struggles to find employees because he treats them very well. Everyone needs to keep this in mind when looking for caregivers. Treat them right and they will be happy to do their best for you.
The payroll company guarantees accuracy and will be liable for any errors. It is an extra cost but so worth it. You can sleep better at night and not worry about the IRS coming after you.
Currently, we're paying approximately $135 in payroll fee each pay period. Each tax quarter, we pay a little more for them to file the required tax forms.
Just curious because we thought it was high until we had to get a bond for unemployment, a minimum of 1,200.00 annual premium for workers comp and having to do monthly, bimonthly and quarterly payments and quarterly and annual filings. The fees were well worth it in the end and they even offered group health insurance, which we couldn't do.
An employee has federal taxes, SS/MEDI taxes and state taxes withheld from their earnings, everything else is a labor burden for the employer.
https://www.irs.gov/businesses/small-businesses-self-employed/family-caregivers-and-self-employment-tax