Which way is profitable? -
Employee versus Out-Sourcing:
When a business
owner hire employees, each employer is working as a “Tax Collection Agent” of State and Federal
government. On each pay period, each employer must withhold Social Security Tax, Federal Income Tax, and State Income Tax
from each employee paycheck. In addition, employers are required to match employees' Social Security "contributions" and pay
Federal Unemployment Tax (FUTA).
To avoid the
additional payroll tax burden, most small business owners choose out sourcing accounting and bookkeeping tasks versus hiring
full time or part time employees.
Basically,
Out Sourcing is also economical and cost effective in terms of dollar amount paid for salaries and wages. A full time Accountant
salary ranges between $20.00 to $30.00 per hour = $3,200.00 to $4,800 per month. The same tasks can be easily performed by
an out-sourced Accountant by paying only $1000.00 per month and you can save payroll taxes too.....!
An out-sourced accountant always works
as per pre-defined scope of work outlined as per business owners needs and maintains a high level of accuracy standards. The
employer has not to worry about training, supervision and monitoring task for an out-sourced accountant.