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    • Employee vs Contract Hire
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  • Employee vs Contract Hire
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Unlock Your Business Potential

Business Support Service Strategy

We offer comprehensive business support services tailored to your needs. Our pricing is transparent, ensuring you receive high-quality services at an affordable rate.

Monthly Service Breakdown:

✅ Bookkeeping – $50/hour x 10 hours = $500/month
✅ Administrative Work – $40/hour x 10 hours = $400/month
✅ Social Media Management – $45/hour x 8 hours = $360/month
✅ Website Upkeep – $50/hour x 3 hours = $150/month

Total Monthly Investment: $1,410

Total Annual Investment: $16,920

By outsourcing these essential business tasks, you free up valuable time to focus on growth while ensuring expert handling of your operations. Let’s streamline your business together—contact us today to get started!

Contract vs Employee

The difference between hiring an employee and contracting a person lies in the legal, financial, and operational aspects of the relationship. Here's a breakdown:

Hiring an Employee:

  1. Legal Relationship – Employees work directly for your company under an employment agreement.
  2. Control – You have control over their work hours, methods, and processes.
  3. Taxes & Benefits – You are responsible for withholding income taxes, Social Security, and Medicare. You may also need to provide benefits like health insurance, paid time off, and retirement plans.
  4. Long-Term Commitment – Employees typically work indefinitely unless terminated.
  5. Company Culture & Loyalty – Employees are part of your company’s culture and are more likely to be invested in its success.
     

Contracting a Person (Independent Contractor or Freelancer):

  1. Legal Relationship – Contractors are self-employed and work under a contract for specific tasks or projects.
  2. Control – They have more control over how they complete the work and often use their own tools and methods.
  3. Taxes & Benefits – You do not withhold taxes or provide benefits; contractors handle their own taxes.
  4. Short-Term or Project-Based – Contractors work for a defined period or project and are not considered permanent team members.
  5. Flexibility & Cost Savings – You avoid long-term commitments, payroll taxes, and benefits costs, but may pay higher hourly or project rates.

Which One is Best?

  • Hire an employee if you need someone long-term who will integrate into your business.
  • Contract a freelancer or consultant if you need specialized expertise, short-term help, or more flexibility.


Are you considering hiring or contracting for your business consulting firm?

TAX BENEFITS

When hiring an employee with a $60,000 annual salary, your business will have to pay additional payroll taxes. Here’s a breakdown of the estimated tax costs:

Employer Payroll Tax Costs for an Employee

  1. Social Security Tax (6.2%) = $3,720
  2. Medicare Tax (1.45%) = $870
  3. Federal Unemployment Tax (FUTA - 6% on first $7,000, but typically reduced to 0.6%) = $42
  4. State Unemployment Tax (SUTA) – Varies by state = Approx. $300–$1,500 (estimate $1,000 for this example) 

Total Estimated Employer Taxes for Employee = $5,632
Total Cost to Business for Employee = $65,632

Other Financial & Operational benefits

 Hiring a contractor instead of an employee can offer several financial and operational benefits to your business. Based on the provided payroll tax breakdown, here are some key advantages:

1. Cost Savings on Payroll Taxes

  • As shown in the breakdown above, hiring an employee with a $60,000 salary results in approximately $5,632 in employer payroll taxes.
  • Contractors are responsible for their own taxes, including Social Security, Medicare, and unemployment taxes. This can significantly reduce your overall labor costs.
     

2. No Benefits Expenses

  • Employees are often entitled to benefits such as health insurance, retirement contributions, paid time off, and other perks, which increase the total cost of hiring them. 
  • Contractors do not require benefits, saving your business thousands of dollars annually.
     

3. Flexibility & Scalability

  • Contractors can be hired on a project or as-needed basis, making them a great option for businesses with fluctuating workloads. 
  • Employees require ongoing compensation, even during slow periods.
     

4. Reduced Compliance & Administrative Burden

  • Employees require payroll processing, tax withholdings, compliance with labor laws, and HR management.
  • Contractors handle their own tax filings, insurance, and benefits, reducing administrative responsibilities for your business.
     

5. No Long-Term Commitment

  • Terminating an employee can be complex due to labor laws, severance, and potential legal risks.
  • Contractors work under contracts, making it easier to end agreements when the work is completed.
     

When Hiring an Employee Might Be Better

While contractors offer flexibility and cost savings, hiring an employee may be better if:

  • You need long-term, dedicated talent with company loyalty.
  • The role requires extensive training and company knowledge.
  • You want more control over work hours, process, and performance (contractors operate independently).


Would you like help determining the best hiring strategy based on your specific business needs?

Administrative Consulting

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