DAYSPA is the business resource for spa & wellness professionals! Each issue covers the latest in skin care, spa treatments, wellness services and management strategies.
Issue link: https://dayspamagazine.epubxp.com/i/862953
dayspamagazine.com/freeinfo legal pad [ 80 ] • # dayspamagazine • september 2017 It's tempting for spa owners to fi ll their staff with ICs instead of employees for numerous reasons: ■ The owner can avoid withholding and paying state and federal payroll taxes; ICs must pay their own withholding. ■ There's no need to pay an employer's share of Social Security and Medicare taxes. ■ Wages can be lower. It's rare to hire ICs on a full-time basis or to pay them the same wage rate as that of employees. ■ With an IC-based staff , the spa owner isn't obliged to pay for health care and retirement benefi ts, which often add 20 percent to 30 percent to an employee's salary. There's also no need to off er vacation, holiday or sick pay. ■ There is no required overtime pay for ICs. ■ There's no need to fi le weekly or quarterly payroll tax forms, as ICs must fi le their own. ■ Workers' compensation insurance and unemployment compensation taxes are avoided. Given these costs, why should a spa owner ever consider hiring employees? Primarily because the IRS and DOL believe it's a good idea. First, it benefi ts workers to be classifi ed as employees rather than ICs: They may qualify for the above benefi ts and receive the protection of certain workplace laws, many of which may not apply to ICs. Employees also benefi t by having a portion or all of their income taxes paid by the employer. Second, the government itself benefi ts from your hiring employees, because having payroll taxes withheld and paid to the government throughout the year generates cash fl ow for it and simplifi es income tax collection. © GETTY IMAGES It benefi ts workers to be classifi ed as employees: They may qualify for benefi ts and receive the protection of workplace laws. Spa disposables, towels, waxing, manicure and pedicure supplies. ZZZVSDUHQLW\FRPRU&DOO7ROO;)UHHWRRUGHU 63$ )D[(PDLOVSDUHQLW\#\DKRRFRP