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Paying 60% or 50% as a contractor is the same as what percent as an employee

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  • Paying 60% or 50% as a contractor is the same as what percent as an employee

    What does it equal out to ?


    No one believes that that it's as low as I said,so I need multiple people to confirm.

  • #2
    Originally posted by Justkeepswimming View Post
    What does it equal out to ?


    No one believes that that it's as low as I said,so I need multiple people to confirm.
    Can you rephrase the question?

    It is my understanding that if you are an IC, you don't receive a percentage. Instead, you pay a pre-arranged fixed rate per month for table rental.


    Sent from my iPad using Tapatalk

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    • #3
      It varies a lot because while Federal taxes are same, every state has different rates, or none, for state income tax, and self employment taxes vary by state plus in some states you may as an IC (legal or not) pay unemployment, disability and other taxes unique to the state and different state fees to be self employed. Generally, someone paid 60% as an IC actually nets LESS than a 50% commission employee if the IC paid taxes correctly.
      Most questions regarding GroomerTALK are answered in the Board Help Talk Forum. Thanks for coming to our community a part of PetGroomer.com https://www.petgroomer.com.

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      • #4
        As an employer, I pay roughly 10 percent (taxes only) into each employees paycheck each week. So even though I pay 50% commission, I'm paying out about 65% total. 3% alone is Workers Comp insurance, about 9% is federal tax, there's state unemployment which is about 1 1/2%.

        If you are paid as a subcontractor and you as a groomer are responsible for all your taxes, figure you need to pull out 15% to 20% of every dollar you make. So if you are paid 60% as a illegal or legal IC, you are making a whopping 40% take home pay. And at 50%, you are clearing 30%.

        For an employer, paying groomers as IC's is a win because they pay a straight 50% or up to 60% and no payroll tax, no Social Security, insurance, all they do is issue a 1099 in January and you are on your own as a groomer IC to pay the govt.

        Remember, you and your employer contribute to your Social Security retirement. I pay half, you pay half. As a IC, you as a groomer are responsible for the whole SS contribution.

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        • #5
          In addition to what Tom stated , the IRS tacks on a lovely 'self employment tax' amount to federal amount each year. It was roughly $3200 last time ( $250 a month more - how many dogs do you groom to make that each month?)

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          • #6
            I figured it out for here and if the IC doesn't get about 70% commission they would make more at 50% employee and never would I pay 70%. They just don't figure in all the self employment taxes.

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            • #7
              IF I had to pay an IC, I would not go more than 60%. That said, anyone making 50% LEGALLY is getting a very fair deal.

              Your employer is paying you 1/2 of the groom, then out of the employer's 1/2, they are paying into your SS, Workers Comp protection, unemployment protection, getting you clients, providing you with supplies like shampoo, keeping the lights on, paying rent, paying for phone and internet, paying licensing to keep the shop legal, paying insurance for the building, fixing any equipment like dryers and plumbing all to keep a groomer employed and making money.

              That's why A, a shop owner needs to be a groomer and work or B, the shop has to be high volume to make enough for the shop to pay its bills and C, bath dogs are done by hourly wage bathers so the shop makes more.

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              • #8
                Agree Tom

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