Cost of Employees & insurance?

[DAPER DAWG]

I know it varies across the country, but I just want to get some general ideas from all over of how much people spend for worker's comp insurance, unemployement taxes, liablity insurance?

Are there any other costs I haven't mentioned besides salary?

I want to work up an average to put into my financial projections for my business plan for if and when I hire and employee.

I am looking for the cost of comp. for one to three part-time employees.
Thanks
Lori.

[dodger]

costs

Well here in Wi I have two part time employees, one is half time the other is about 3/4. This year my workmans comp. was about 1300. Business insurance and liability is about 500. You have to match the FICA they pay in so it will bepend on how much they earn. I rent space in a clinic so that is why my insurance is so reasonable. If you have an entire building and the things that go in it, phones, break room, washer/dryer, ect. then you have more assets to replace in case of loss. Higher premiums. A good tax person should be able to help but they don't want to talk to anyone for at least a couple of weeks right now. Talk about burned out.Good luck.

[RoosMom]

Workman's comp IS your liability insurance for your employees. Liability covers everyone else. ;-) You forgot matching employee SS and medicare payments every check. It cost me far more to have employees than it was ever worth, and I had as many as 4 at one time. I think you need to really grow your business to a fairly good size, or stay a one person operation to make a good profit. I have no employees now, and I'm better off both mentally and financially.lol 'Course, that's just me. Many enjoy having employees, and it works for them.

[angelpaws]

I have one employee and I pay worker comp is about $600ish a year. It goes by how many hours they work. Liablity ins runs about $500ish a year. Unemployment is different every quarter so it is hard to give amount of cost. I am in Nevada so that makes a differents too.

[Dawn125]

I don't know if it varies by state but I'm in Calif and I believe our workers comp is about 10%. So for every $100.00 in payroll you pay $10.00 in workers comp insurance. It doesn't matter how many employees or whether they are part time or full time. It's just figured on gross payroll. I believe FICA which is social security and medicare is 7.65% of payroll. I have no clue how much our liability insurance is but of course that will vary quite a bit depending on how much stuff you have and probably how much business you do annually.

[Chicken]

This is one of the major factors which keeps me from hiring some part time help.

Now what if you hired someone on as an independent contractor with a W9? Would you still need to provide workmans comp insurance?

[K-9 Designs]

Is the independant contractor in pet grooming kind of like booth rental for people stylist?

[RoosMom]

Is the independant contractor in pet grooming kind of like booth rental for people stylist?

Yes, exactly.

[Helly]

This is one of the major factors which keeps me from hiring some part time help.

Now what if you hired someone on as an independent contractor with a W9? Would you still need to provide workmans comp insurance?

If you hire someone, they're your employee. If someone is an independent contractor, they're renting space from you, they set their own hours, book their own appointments, collect the $$, wear whatever they want, and can even hire someone else to work in their stead. They are essencially their own boss, and they're working for themselves. And they have to provide their own work comp insurance, liability insurance, etc, because they aren't your employee.

[Gracy Rose]

Also per Independent Contractors, the IRS states that they cannot perform your main source of business (ie. in a grooming shop your IC cannot be a groomer. So, how people get around this I can't figure out).

As far as employees: I figure that it costs me $3,000 per month for employees (not counting payroll). Here in Florida: My workman's comp is $6,000 per year, My payroll tax payment is almost $5800 per quarter and my liability insurance (if they cut a dog, etc) is $3600 per year.

I have 10 employees.

[Helly]

Also per Independent Contractors, the IRS states that they cannot perform your main source of business (ie. in a grooming shop your IC cannot be a groomer. So, how people get around this I can't figure out).

I've wondered about that, too. Hospitals do it, medical clinics do it, hair dressers do it, and I suspect there are other types of businesses that do it, too. There must be some sort of loophole.

[Gracy Rose]

Something else to consider (are you willing to be fined upward of $10,000 for this IC if you are caught doing it wrong?):

As an IC, you must provide your OWN clients, if you are grooming the shop clients you are breaking the law.

As an IC, you must provide ALL of your own equipment (table, tub, towels, shampoo) if not you are breaking the law.

As an IC, you must check in and check out your own clients, Have your own Business License, file quarterly business taxes, Sign a waiver of Workman's Comp with your State, have your own business contact (phone number, etc.).

Just because it has been done this way for years does not mean it is right.

Having IC's benefit the OWNER not the IC. Self employed people pay a higher tax rate almost 28%. As an employee your boss has to pay a fair amount of it.

I know alot of people want to be IC because they can use things as deductions. BUT, you can only claim a loss for two years then you have to reorganize as a HOBBY not a job. Failing to do these things can lead to a MAJOR RED FLAG with the IRS. As everyone becomes MORE and MORE computer savvy and new computer programs are being designed it is only a matter of time before the IRS has programs that will catch all of these little things that slip by. ALSO, the IRS can go back for 10 years and screw you.

[SpikeyTheYorkie]

I wasn't going to reply, but decided I would. HOW CAN ANYONE AFFORD employees with some of the costs that are mentioned here?

I keep thinking that maybe one day I would rent the space I'm in, but on top of the rent, I'd have the taxes, the employees pay, the employees taxes, the insurance, liability, etc etc...I'd come home broke. Wouldn't I? I'd really have to jack up my prices to cover that, am I going wrong somewhere here? I've also thought about grooming out of my home once it is finished being built (yay, we finally dug the hole!), but at 28% taxes, WOW, it puts me right back where I am now, making about 50% but still having a lot of control over my prices and clientele. How frustrating.

Tammy in Utah

[DAPER DAWG]

The only reason I'm only considering even needing to hire an employee some day is because I was hoping to do doggie day care and grooming and as we all know we can't do both alone. That would be a legal nightmare waiting to happen. I was hoping the doggie day care could help fill in for the slower grooming seasons.

Nothing large just 10-16 big dogs and a few small ones for daycare.

I was hoping to start off with mostly doggie daycare Mon-Fri. and grooming on Monday and Saturday cause my hubby can help watch the daycare dogs on Monday and build up the grooming clientele and then hire a daycare attendent at least part -time so I could groom more.

The more I find out about the prices and hassles of hiring employees, I'm not so sure this is still the route I would like to take. I will make my final decision once I start getting some rental quotes from landlords.

[dodger]

partnership

Now something that hasn't been mentioned. Partnership, you can have someone come in at a percentage of the business without them making an investment They are a silent partner so to speak. Because you have the majority of the percentage you have ruling say. If they leave, they simply walk away. Of course you have them sign noncompete and nondiscloser contracts. You as the original owner and largest percentage holder run the business. They don't have to be told all the business goings on just the gross, the net, and they get their percentage. Something to think about as their is no employee, but there is someone to share the work load. The harder they work the bigger their paycheck or better equipment they will have.