Payroll Taxes in Prime Costs

[mandino]

I know that most people say that Payroll Taxes should be included in the prime cost figure, but are they talking about Unemployment (federal & state) as well, or are they only talking about social security and medicare employer’s taxes?

Thanks.

 

[bodegahwy]

I include unemployent in my labor cost.

 

[Daddio]

I include every cent that it costs me to have an employee. The way I see it, that is the true cost of the employee’s time.

 

[johnnymc]

Indy’s don’t pay under the table? If I owned my own place…there would be no payroll taxes.

 

[Daddio]

johnnymc:

Indy’s don’t pay under the table? If I owned my own place…there would be no payroll taxes.

I think you would be drawing an IRS target on you back. :lol:

 

[bodegahwy]

If you legitimately report your sales it makes no sense to pay under the table. All your net is considered profit and taxable to you personally. There is no advantage gained.

The folks that pay under the table almost invariably also do not fully report sales. They are also cheating on sales tax, unemployment, and work comp on top of payroll tax.

Personally, I have no respect for people that do not pay their fair share in the world.

I go back and forth on whether to call work comp insurance or labor. I have always called it insurance.

Not only will you have an IRS target on your back, your local city is pretty often the first to catch on and place a lein for sales taxes. The most likely scenario is that you get either a work comp or unemployment claim that unwinds the whole thing. One unhappy former employee making a phone call can also bring the house down on your head. This is right up there with the knucklheads that want to say that their employees are independant contractors.

 

[mandino]

bodegahwy:

If you legitimately report your sales it makes no sense to pay under the table. All your net is considered profit and taxable to you personally. There is no advantage gained. Personally, I have no respect for people that do pay their fair share in the world.

Not only will you have an IRS target on your back, your local city it pretty often the first to catch on and place a lein for sales taxes. The most likely scenario is that you get either a work comp or unemployment claim that unwinds the whole thing. One unhappy former employee making a phone call can also bring the house down on your head. This is right up there with the knucklheads that want to say that their employees are independant contractors.

I couldn’t agree more.

I consider worker’s comp as insurance. It could go either way.

 

[NicksPizza]

mandino:

I couldn’t agree more.

I consider worker’s comp as insurance. It could go either way.

In addition to trying to aspire to be a legitimate business man, dodging Workers Compensation is self-defeating. If that employee should get injured or suffer some damages, and decide to sue you for lots of $$$, then you have lost your federal/state mandated protection against employee liability suits. That rises to the level of being a moron to save a couple bucks. We run restaurants, for heaven’s sake . . . it is an injury prone industry.

IRS would come in and place liens at the same time that a judge would be leveling liability awards in the lawsuit . . . . at the same time you would be hiring a lawyer to resolve both the Chapter 7 Bankruptcy filing and the tax evasion proceedings. Still remains to be seen if local law enforcement pursues reckless endangerment type of actions.

Pay your workers comp premiums already.