Webinar Slides: Crash Course to Hiring, Taxes, and More!
•Download as PPTX, PDF•
2 likes•3,090 views
Hiring is important and it should be empowering, not scary! In this webinar, we’ll take you through the basics of being a new employer and becoming compliant with key federal and state regulations. We’ll also give helpful pointers for both new and existing businesses, including best practices from entrepreneurs just like you.
Recommended
More Related Content
Viewers also liked
Recently uploaded
Recently uploaded (12)
Webinar Slides: Crash Course to Hiring, Taxes, and More!
- 1. Crash Course to Hiring, Taxes, and More! STEVE JOHNSEN Head of Compliance ERIN COLBERT Small Business Advocate
- 2. Questions? Twitter @ZenPayroll #FirstHire or Use GoToWebinar
- 5. Are they qualified? Will they fit our company culture? How about employee benefits? Or payroll taxes? Or just plain ol’ compensation?
- 7. In this webinar we’ll cover: ● 4 steps to preparing for your first hire ● The best payroll schedule for your business ● Differences between a contractor and an employee ● Critical legal & regulatory documents needed for employee #1 ● Employee tax, benefit, and health insurance basics
- 8. What to Do Before You Make the First Hire
- 9. What kind of corporation are you?
- 10. S Corp An S Corporation (“S Corp”) is a popular choice for many businesses. They are generally more complicated legally but can provide significant tax savings.
- 11. C Corp A C Corporation (“C Corp”) is an alternative choice to the S Corp. Unlike the S Corp, C Corps can be subject to “double taxation,” which may make them unpopular with small businesses.
- 12. LLC A Limited Liability Corporation (“LLC”) is a lightweight alternative to incorporate your business. It does not have the typical tax savings as the other options, but it is less complicated legally.
- 13. The 4 steps to preparing for your first hire: 1. Apply for a Federal Employer Identification Number (FEIN) 2. Become Compliant with Your Relevant State Departments 3. Purchase Workers’ Compensation Insurance 4. Make Sure Workers are Properly Classified
- 14. Apply for a FEIN (Federal Employment Identification Number)
- 15. Get compliant with your state
- 16. Arizona Dept. of Economic Security Arizona Dept. of Revenue California Dept. of Industrial Relations California Employment Development Dept. California Franchise Tax Board Colorado Dept. of Labor & Employment Colorado Dept. of Revenue Connecticut Dept. of Labor Connecticut Dept. of Revenue Services Florida Dept. of Economic Opportunity Florida Dept. of Revenue Georgia Dept. of Labor Georgia Dept. of Revenue Illinois Dept. of Employment Security Illinois Dept. of Revenue Massachusetts Dept. of Revenue Massachusetts Labor & Workforce Dev. Nevada Dept. of Employment, Training & Rehabilitation Nevada Dept. of Taxation New York Dept. of Labor New York Dept. of Taxation & Finance North Carolina Dept. of Labor North Carolina Dept. of Revenue Tennessee Labor and Workforce Dev. Texas Workforce Commission Utah Dept. of Workforce Services Utah State Tax Commission Washington Dept. of Labor & Industries
- 17. ZenPayroll automatically manages your state payroll-related tax payments and filings.
- 21. What to Do On Your Employee’s First Day
- 22. Celebrate!
- 23. Create a memorable first day Throw a welcome party Prepare a desk gift Make a warm introduction Have dinner together Pull some office pranks
- 24. What about the legal stuff?
- 25. Form I-9 Verifies eligibility to work in the US. You don’t need to submit the form, but must keep it on file (digital is ok) as long as they are employed, a minimum of 3 years from the hire date or 1 year from the term date, whichever is longer.
- 26. Form W-4 Form to determine an employee’s tax withholding. Must be completed by the employee and does not need to be submitted. Keep on file a minimum of 4 years. Best practice to update annually.
- 27. State Reporting Each state has a department to report your new hire name, address, and social security number. Depending on the state, you may have a few to 90 days to submit this information.
- 30. Important Taxes, Legal, and Regulatory Issues for Your First Hire
- 31. Do you know the taxes and obligations for your first hire?
- 32. Calculated according to: 1. Marital status 2. Number of allowances claimed on Form W-4 3. CompensationWithhold Taxes
- 33. Deposit Taxes and File Returns
- 34. Determine if employees are subject to overtime laws.
- 36. Pre-Tax Health Benefits Under section 125, employees can deduct insurance premiums pre-tax and set aside pre-tax funds for healthcare and medical expenses. Employers can also see a significant decrease in company payroll tax.
- 37. Retirement Benefits There are some advantages to starting a retirement plan for your employees including tax-deductible contributions, access to various tax credits or incentives for starting a plan, and attracting and retaining employees.
- 38. Fringe benefits could be tax-free: ● Commuter benefits ● Employer-provided cell phones ● Meals ● Athletic facilities
- 39. What To look For in Your First Hire
- 40. What are you looking for in your #FirstHire?
- 41. CHARLOTTE GENEVIER (CEO/Founder, The Cotery) A startup’s first hire needs to have three things: self-motivation, alignment of vision, and resilience.
- 42. JONATHAN JUNKER (Co-Founder, Graypants) For us, personality is everything. My advice is to find someone you really enjoy being around. And find people you really look up to. I look up to the people I work with more than anybody.
- 43. ALEX LIPSCOMB (President, ALL MAVEN) The best kind of person you can hire is someone who’s not only passionate about your company, but who wants to grow with your business.
Editor's Notes
- This session will be recorded and we’ll send you a copy of the recording after the webinar Jake Lammert is here to answer questions you have.
- Poll: How many employees do you have? I’m thinking of hiring my first employee 1-4 employees 5-10 employees 10+ employees
- Hiring your first employee can be nerve-wracking.
- All this can be overwhelming but it doesn’t have to be. We’re here to help.
- We’ll spend the next 30 minutes going through preparing for your first hire, helping you to determine the best payroll schedule for your business, explaining the differences between and employee and a contractor (and the implications of improper classification). We’ll look at all the critical legal and regulatory documents you’ll need and review some tax, benefit, and health insurance basics. We’ll wrap up with questions and those interested can stay on for a 5 minute demo of ZenPayroll.
- First, understand what type of corporation you are.
- An S Corporation (“S Corp”) is a popular choice for many businesses. They are generally more complicated legally but can provide significant tax savings. Most large companies in the US are S Corps. In 2010 there were about 4.5 million S Corps estimated to be in the U.S. We often see S Corps having just one or two owners on the payroll only.
- A C Corporation (“C Corp”) is an alternative choice to the S Corp. Unlike the S Corp, C Corps can be subject to “double taxation,” which may make them unpopular with small businesses. The business gets taxed on revenue and then individuals get taxed on income earned (i.e. salaries).
- A Limited Liability Corporation (“LLC”) is a lightweight alternative to incorporate your business. It does not have the typical tax savings as the other options, but it is less complicated legally.
- If you plan on running payroll through a payroll provider, you’ll likely need a FEIN because your Social Security Number is not sufficient. Note: sole proprietorships do not need a FEIN, but partnerships do. Sole Proprietorships will most likely need to apply for an FEIN when they hire their first employee so that a payroll provider like ZenPayroll can process your payroll.
- As an employer, you’ll need to register your company with your state.
- Each state is different. Every state has 1-3 departments thatt handle compliance with state tax collection, unemployment, disability, etc. In California for example, the Employment Development Department (EDD) handles both tax collection and labor and workforce laws like unemployment. In New York, the Department of Taxation and Finance manages your withholding tax while the Department of Labor manages labor and workforce. Most often, there are two agencies in each state where unemployment tax and withholding tax both get paid to separately based on separate deposit frequencies and quarterly reports.
- ZenPayroll automatically manages your state payroll-related tax payments and filings, but you’ll need to register your business in your state first. Make sure you register with your state’s Secretary of State office as well as all employment agencies
- Every state has its own set of workers’ compensation rules. The National Federation of Independent Business (NFIB) has a page that summarizes each state’s policy, but be sure to check your local state regulation directly to see if you have to set up a policy for your first employee. California is one state where you need workers’ comp for your first hire. Not having a policy set up by the first day your employee starts working can result in fines and penalties.
- It may feel like a lot of work to hire an employee, so you’re probably thinking…”why don’t I just bring on independent contractors so I don’t have to deal with all of this?” Good question! Sometimes a contractor is a good fit, but be careful because your contractor may legally be classified as an employee and that misclassification can cost your business in fines and unpaid tax liabilities. I’ll let all of you read up the differences between contractors and employees on your own time. Remember, we’ll be sending this slide deck out to you shortly after the webinar. The major difference between the two tax wise is that employers face employer paid taxes based on an employee’s income while the contractors pay these taxes themselves. This is why the IRS has been cracking down on misclassification.
- Are they being hired for a temporary project? Can they choose where and when the work is performed? Do they use their own materials for the work performed? Is the worker paid a flat fee or hourly rate that is invoiced to the company? If you answered no to any of these questions, you likely need to classify your worker as an employee.
- You’ve reached a big milestone for your business! Only 22% of companies in the US actually have employees.
- Make it a memorable first day for the employee. You could throw a welcome party or prepare a desk gift. At ZenPayroll we give every employee a “welcome watermelon” and take a team photo. We also walk them around the office and introduce them to team mates and have them talk to customers.
- This form verifies that the employee is legally capable of working in the US. It involves you as the business owner to verify certain forms of identification in person for you employee before both signing the form.
- Your employee will also need to fill out Form W-4 to determine their tax withholding (Note: You cannot do this on their behalf). The W-4 does not need to be submitted anywhere, but each company is legally required to keep every employee’s W-4 on file for a minimum of four years. Only modern payroll providers like ZenPayroll manage your withholding taxes on behalf of you and your employee. A withholding tax is a pay-as-you-go tax to the IRS and can be calculated through the W-4 and their IRS withholding calculator. These three things determine how much you withhold for your employee: Marital status The number of allowances claimed on the W-4 Compensation (Note: This may depend on the State where your employee receives payroll.) Employees who anticipate a full refund may be exempt from withholding. This is different from employees who are a special kind of exempt, like clergy or certain visa holders.
- What are acceptable forms of identification used to complete the I-9 form? A driver’s license A passport A library card A social security card or birth certificate A, B & D are all acceptable
- Some states require a minimum pay period. For example, Connecticut requires a weekly payroll. You can always pay more frequently, but not less. It’s important to note that some payroll providers will charge more for more frequent payrolls, We do not, the price is the same regardless of your pay schedule.
- A withholding tax is a pay-as-you-go tax to the IRS and can be calculated through the W-4 and the IRS withholding calculator. There are 3 things that determine how much you need to withhold for your employee: (1) their marital status (2) the number of allowances they claimed on their W-4 (the higher the number, the less is withheld), and (3) their compensation (which could vary depending on which state the employee receives pay in)
- There are different due dates for the taxes you’ve withheld for your employee. Your payroll provider will match these due dates to your payroll schedule. Some taxes are also due quarterly and annually, depending on local or state regulations. We highly recommend choosing a modern, online payroll provider to stay compliant and make sure all your taxes get paid accurately and on-time. Over 40% of small businesses get fined an average of $850 each year for payroll-tax related issues - the most common we see is missed or late payments.
- Overtime laws differ across local and state regions. A non-exempt employee is paid hourly and is most impacted by overtime. An exempt employee is not paid by hour, but depending on your city and state, likely has a minimum salary. As a rule, you should always follow the minimum wage law that is the most favorable to the employee. Check your local and state departments of labor to make sure you’re being compliant for your non-exempt and exempt employees.
- A section 125 plan provides employers the option to offer taxable and nontaxable benefits. Section 125 can be beneficial for employees and employers. Since the employees are receiving these benefits pre-tax, these premiums are also not subject to Social Security and Medicare tax.
- For a small business, there are some advantages to starting a retirement plan for your employee including tax-deductible contributions to the plan, access to various tax credits or incentives for starting a plan, and attracting and retaining employees.
- Non-wage benefits provided to employees. Examples of these benefits include: housing (employer-provided or employer-paid), group insurance (health, dental, life etc.), disability income protection, retirement benefits, daycare, tuition reimbursement, sick leave, vacation (paid and non-paid), social security, profit sharing, funding of education, and other specialized benefits.
- We asked our customers and Twitter followers what they are looking for in their first hire. Here’s what they had to say. You can weigh in by using hash-tag #FirstHire
- We’re going to take a few minutes to answer questions and then jump into a 5-minute demo of ZenPayroll. To learn more, visit our website at zenpayroll.com and you’ll get your first 2 months free. Launch into demo