Whether someone is a 1099 contractor or a W-2 employee depends on control and independence, not on what the contract says. The IRS weighs behavioral control, financial control and the relationship, and states like California apply a stricter ABC test. Here's how to decide.
Electing S corp status lets an LLC owner take part of the profit without self-employment tax. Whether that's worth it depends on your profit, a reasonable salary and the extra running costs. Here is the math at three profit levels.
Every paycheck involves taxes you withhold from the employee and taxes you pay yourself. In 2026 that's 6.2% Social Security and 1.45% Medicare from each side, federal unemployment tax on the first $7,000, state unemployment tax and income tax withholding. Here's how it all works.
Before your first employee starts, register as an employer with your state, set up payroll, and get workers' compensation. On day one, collect a W-4 and complete the I-9 within three business days, then report the hire within 20 days. Here's every step.
Use a PEO when you have a US company and want better benefits and HR help for your US employees: from $79 to $125 a month per employee. Use an EOR when you want to employ someone in a country where you have no company: around $599 a month. Here's the full comparison.
For most small businesses, Gusto is the simplest payroll to buy and run: $49 a month plus $6 per person for one state, $80 plus $12 for several. ADP and Rippling price by quote. ADP suits businesses that want a large, established provider, Rippling teams that want payroll, HR and IT in one system.