Worker's Comp.....

Won't the employee see that from the paystub you give him?

 

Of course not. Not all of it. Remember the employer is supposed to pay half of social security. That half is not on the paystub. Out of sight out of mind as far as most employees are concerned. Employers do the same with other costs. It means reduced wages for the employee to cover those costs. Just because it's not on your paystub as coming out of the check, or there is some 3 card Monty law saying the employer pays it, does not mean your wages don't get cut to cover it. You the employee pay for all of that. Reality you the employee pay 100% social security because of reduced wages. The money comes from somewhere.

 

Some time ago I sat down with some employes and broke down the costs I was paying for them to work for me. I am not sure they really believed me, even when I showed them in black and white. I tried to explain to them what they were really making rather than what they were taking home. Most companies allocate a certain percentage of their revenue to cover various costs, including payroll. The employer part fo social security is still a payroll cost to the company as well as workers comp. Employees don't know the actual cost because it doesn't show on their pay stub and they don't have to pay for it. Another cost is insurance. Some may think they are paying all of their insurance costs. In reality, they are probably only paying a certain percentage of the cost, if at all. With the added costs of obamacare, the cost of having employees has gone up. Beginning in January the costs will go up even more. Some of those costs are bound to be passed along in the form or higher employee contributions or lower wages to offset the higher costs. People need to take off the blinders. Some employees are of the opinion that the employer is getting rich off their backs and can just absorb the additional costs or perhaps raise their costs of the products or services they provide.

 

Never having paid employees I have no experience with it but at the same time I never had blinders on. Most employees don't get it and like you said G/MAN their eyes likely glaze over when you try to explain it. There'd be riots in the street if half of them woke up. But you give them a $500 or $1,000 "refund" once a year and they think they hit the lottery.

 

At 65K to the driver, after my share of FICA,medicare,comp,umc, and medical insurance it costs me about 82K.

 

Ya just what I was thinking, another scum bag that thinks he is above the law and will pay on a 1099. It's illegal, hope they catch you and make you pay for it.

 

WHOA there, you are not hiring an employee, you are hiring a contractor. 1099 is not for employees, so you don't pay anything other than a straight pay out of earned money. They pick up all the expenses, including the WC and a companies share of the social security crap.

 

A contractor can not drive a company truck as in the OP case, that makes him a company employee. You know an owner operator is not going to work for 25% of revenue.

 

There is nothing illegal about paying someone on a 1099. I wish we all were paid on a 1099 and had to write out a check for all those taxes out of our own bank account. I guarantee you that we would all be paying much less in taxes. When you are the one writing the check it gives you a very different perspective. The only difference in paying on a 1099 and W2 is who writes the check for all those taxes. Of course, on a 1099 you are also responsible for your full social security contributions. But, there can be some tax benefits from being paid on a 1099 which may more than offset any additional tax obligations from a 1099. Everyone should be responsible for paying all of their own taxes.