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employer’s share of payroll taxes (7%), pay into unemployment, and take out
workers compensation insurance.
However, this financial exposure is less than you might assume, and your
assumptions may be driven by some misconceptions about the actual costs and
benefits For example:
• The costs associated with payroll are not fixed, and are proportionate
to the size of your payroll, which means the absolute cost of switching
to payroll may not be as much as you think if you have a small staff or
temporary or occasional workers.
• You can still employ people on an “as-needed” basis as W2
employees, something employers commonly misunderstand. By
making someone an employee, you do not have to commit to a certain
number of hours- all that is changing is the way you pay them for the
hours worked.
• Unless you have more than fifty employees, putting someone on
payroll will not obligate you to provide health benefits.
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