Is the workload in your business seasonal? Are you thinking of hiring temporary help in the near future? If so, keep in mind there are some things to consider. What are all the costs associated with a regular employee that must be paid for the temporary worker?
1. Employer Taxes: Employers must remit payroll taxes on the wages of each employee.
- a. 6.2% Social Security
- b. 1.45% Medicare
- c. .6% Federal Unemployment (although 17 states had an additional amount they had to pay in FUTA in 2013 because the states didn’t pay back their federal loans for unemployment taxes. Many will have this penalty for 2014 as well.)
- d. Each state also has their required payroll taxes which vary by type of tax, wage base, and percentage.
2. Worker’s Compensation Insurance: Every employer must carry this insurance in the event an employee is hurt on the job. Rates are based on the job description, experience rating and earnings. Make sure you have insurance in place when hiring so you are protected in the event of an injury on the job.
3. Benefits such as vacation and sick pay are not required by law, but if you offer them in your business, your temporary employee may be subject to the same benefits .
A final consideration is if your worker is going to be under the age of 18. If so, make sure they receive the proper work permit before beginning employment. For more information on this topic, contact your state labor board, or have the student contact their school for a permit application.
Having a temporary worker can help you through the busy times, but make sure you are aware of and prepared for all of the additional costs of bringing on another employee.