I’ve couple guys working for my property as apartment manager. I’m thinking of paying them minimum wage. My question is. I’m currently 1099 all of them and have them pay for each apartment unit that they are living in my property. I’d like to change them to employee and pay them minimum wage. My question is can I have them fill out time sheet for 4 hrs instade of 5-6 hrs a days and give him others compensation by let them live in each unit for free (free rent). In fact the work time is very flixible no clockin or clock out. In this case they pay less tax. I also pay less tax. Could you give the comment on the idea ? I haven’t done this but thinking of doing it sometime soon. Can I skip worker comp if I only have 2-3 managers working for me for now. I just don’t want to make mistake please advice me on which way I should do.
Your going to need help from your accountant on this.
Because a portion of their pay IS housing. If you do this wrong it could really bite you in the future when you get that nasty audit letter.
I agree that they should go to employee status once they hit a few hundred in earned income.
Who does your payroll? There are rule books on how to pay employees.
Here cowboys usually get a free house, utilities and a beef plus a monthly salary. They pay taxes on the salary. Customarily they don’t pay for the house or other benefits. I believe that is an accepted handling of taxes for cowboys. So they tell me. There may be an accepted tax handling for part-time resident apartment managers in your state.
Sorry I can’t be more help. Except for waving a huge red warning flag–do this one RIGHT! Set it up RIGHT! So go get that CPA/Tax Attorney help to set it up correctly. If there is an Apartment Owners Association there they may be able to give you advice, too.
Please enlighten us on how you dealt with this–we all could use this information.
Lodging is not included as income under the following conditions:
It’s on the employer’s premises
It’s for the employer’s convenience (so the employee can perform their job duties, like on-site on-call maintenance)
It’s required by the employer as a condition of employment.
The employee/contractor decision is a matter of facts and circumstances. Amount of payment is not one of the factors.
Contractors are in business. They have several or many customers. They provide their own tools and work space. They do not have to provide the service themselves, but may subcontract it out. They set their own schedule. They have a risk of loss.
Employees work for one employer, use the employers space and tools, must perform the work themselves, have no risk of loss, work a schedule set by the employer.