kaz
Diamond Member
- Dec 1, 2010
- 78,025
- 22,327
As an employer, I can tell you we don't pay your insurance or your taxes for you. It's subtracted from your pay, all of it, both sides. Not only do I know that from my career in management, management consulting and entrepreneurship having bought and run five businesses, but I see that today directly having sold my business and returning to management consulting.
I have three choices as a consultant:
1) W2 employee of the company I'm working for with benefits
2) W2 employee of a contracting company who pays employer payroll taxes and no other benefits
3) Corp to Corp. I sold my business assets, but I still have a corporation. I can have the company pay me like any other vendor where they withhold no taxes, my own corporation has to do that.
Interestingly enough, guess how the pay for each one varies. 3 is a higher rate than 2 which is a higher rate than 1. And if you do the math, 3 to 2 is higher by exactly the taxes they don't have to pay, and 2 is higher than one exactly by the benefits they don't have to pay.
Those of you who think you're getting a free lunch are just wrong. It's all part of the cost of employment. Couple other examples:
1) In management, you look at your "salary." We look at what we call your "loaded salary." Your loaded salary is your salary + employer side payroll taxes + benefits. We always discuss salary as loaded salary. No one cares what you take home, we care what it costs to employ you
2) If you don't justify your loaded salary in terms of company profitability, we fire you. We aren't fooled by burying costs as "employer contributions" or "unemployment insurance." We count it all and hold you accountable for it.
Stop being deceived by politicians. They know we know this. They think you don't ...
I have three choices as a consultant:
1) W2 employee of the company I'm working for with benefits
2) W2 employee of a contracting company who pays employer payroll taxes and no other benefits
3) Corp to Corp. I sold my business assets, but I still have a corporation. I can have the company pay me like any other vendor where they withhold no taxes, my own corporation has to do that.
Interestingly enough, guess how the pay for each one varies. 3 is a higher rate than 2 which is a higher rate than 1. And if you do the math, 3 to 2 is higher by exactly the taxes they don't have to pay, and 2 is higher than one exactly by the benefits they don't have to pay.
Those of you who think you're getting a free lunch are just wrong. It's all part of the cost of employment. Couple other examples:
1) In management, you look at your "salary." We look at what we call your "loaded salary." Your loaded salary is your salary + employer side payroll taxes + benefits. We always discuss salary as loaded salary. No one cares what you take home, we care what it costs to employ you
2) If you don't justify your loaded salary in terms of company profitability, we fire you. We aren't fooled by burying costs as "employer contributions" or "unemployment insurance." We count it all and hold you accountable for it.
Stop being deceived by politicians. They know we know this. They think you don't ...