Chapter 13: Building Your Team
After choosing a contractor and outlining a contractor agreement (refer to “Contractor Agreements” section of the course under “Contract Writing”), the obligations of the company are pretty simple. You will need the contractor to fill out a W-9 form, which essentially gives your company the necessary information about the contractor (address, SSN or EIN, etc.) to file their 1099-MISC form at the end of the year. If you’re using Quickbooks, this is made super easy by utilizing the built in “Contractors” tab. Check out the video below for how to use Quickbooks to collect W-9 information:
Hiring employees is a bit more of a hassle, and we recommend using some sort of payroll service to manage everything instead of trying to keep track of all the moving parts yourself. Quickbooks actually has an integrated payroll system that will allow you to easily manage health benefits, 401(k) plans, workers comp administration, and direct deposits for your employees for an additional monthly fee. If you don’t want to use Quickbooks, there are TONS of other payroll companies that will handle everything for you, and they generally charge 10-20% of your total payroll cost as a fee (Quickbooks is usually cheaper depending on your payroll costs with fixed fees, which is why it can be a good early move if you’re already using them for accounting and contractors).
Regardless of your payroll provider, there’s a couple forms you don’t want to miss when hiring employees. The first is form I-9, which allows you to verify that your employee is legally eligible to work in the United States. Next, you’ll need to get them to fill out a W-4 form for income tax withholding (make sure to get their social security number on this form so you have it for your records, you will need it for their W-2 at the end of the year). Both of these forms should be completed prior to your employee starting work for your company to make sure everything goes smoothly.