PAYROLL COSTS WHEN HIRING EMPLOYEES
After a business starts succeeding, it’s time for the business to grow and hire more employees. At that point, there’s something every New York City or State business owner gets concerned about:
- What are the Typical Payroll Costs when hiring employees?
- What are all the employer costs for payroll?
- What taxes do you pay when hiring people?
- Are there any hidden or extra fees I need to be aware of when hiring people?
In this article, I’ll go through all the payroll costs you need to be aware of when hiring employees in New York City and State.
WHAT ARE THE TYPICAL PAYROLL COSTS?
When you first hire an employee, you need to hire a payroll service.
This is to make sure the payroll taxes are paid, the employee receives the pay stub, and that you’re legal and compliant.
ESTIMATED COSTS WHEN HIRING EMPLOYEES IN NEW YORK
Here’s everything you need to be aware of:
- Payroll service: $75-150 per month
This ensures that everything is taken care of so you’re legal and compliant.
- Payroll taxes on first $142,800: 7.65%
This would be for social security and medicare taxes.
- Payroll taxes after $142,800: 1.45%
These are the typical taxes required after the cap.
- Unemployment insurance: 2-10%
2-10% of the Employee’s wages limited to the first $11,800 wages for 2021. The wage limit increases each year.
If you do a very good job of recruiting, retaining, and not letting go of employees, then the amount you pay is going to be less.
- Workers’ compensation insurance: $200+ per year
We estimate $200 per year and up per employee, depending on the type of work they perform. If they are an office worker it’s at the lower end. If they are someone that travels or performs physical work, the premiums are higher.
Before paying employees, you’d need this insurance and have to speak to an insurance broker.
Once you hire a payroll service, they usually are the ones that can also set up the workers’ comp insurance for disability or paid family leave.
- Health Insurance: $300+ per month
The cost depends on the employer.
It’s up to you and the kind of benefits you want to give your employees.
- Pension Plan: $200+ per month
People usually pay 2-3% of the employees’ salaries for this.
HOW TO STAY COMPLIANT WHEN HIRING EMPLOYEES IN NEW YORK CITY AND STATE
Although there are a lot of costs incurred when hiring employees, it is still a really important aspect of a growing business and an investment worth undertaking.
If you need help with hiring employees, staying compliant and paying the least amount of taxes possible then feel free to schedule a call with us.
If you’d like to learn how to save $10K, $20K, $50K or more in taxes each year be sure to check out this video here.