Starting a Small Business? Clarify These Payroll Basics with Your CPA Firm

Part and parcel of starting a small business in Nashville is determining how many employees you will need, and how you will hire, manage, and—last but not least—pay them. As you set up shop, don’t forget to discuss these payroll basics with your CPA firm. They will affect your business down to the details of operations and your bottom line.

Worker classification: employees vs contractors

There are two main ways to classify your workers: employees or contractors. As opposed to employees, contractors would only work with you on specific projects, invoice you for services rendered based on an hourly rate, and receive no benefits whatsoever. Employees, on the other hand, are essential to your day-to-day operations, and receive salary and benefits. These distinctions are important not only because they impact how you’ll get the services you need, but also because they dictate the tax requirements you should fulfill.

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