I hired a photographer as an Independent Contractor and pay him 25% for the photography portion of the sale. Later, as the sales increase, I’ll pay the percentage on the entire sale. If he finds and brings in a new client, I pay him 50% of the entire sale. I can’t pay an hourly wage as it would eat up to much of the sale and some of the business I do only takes 30 minuets or less, so I decided 25% of the sale (before any taxes) would be a good payment. I’ve been told 25% is too much, that I should pay 10 or 15%, but I believe in paying my employees a good wage. If the sale is $400, I pay the contractor $100. Later, I can give them an increase in percentage for a pay raise.
The main reason I set them up as an Independent Contractor instead of an employee is, THEY are responsible for paying their own taxes and I don’t have to provide benefits. All I have to do at tax time is send them a form 1099 and report it to the IRS.
I did write a contract for independent Contractors and I’ll be hiring a few more in the near future when business picks up from the advertising campaign I’m setting up. When I get it set up, I’ll explain it on the new board. I’ll also share my contracts with everyone when I get them worded the way I want them.
If you have any more questions, or there is anything I can do to assist you, please feel free to contact me. Good luck with your business.
JD Weiss
President/CEO
Weicor, LLC
http://weicor.com
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