Journey 21 · Running a businessexpandingleading
Your First Employee
“I need help but I have no idea what a person actually costs.”
You become: Someone who can employ another person properly
A wage is roughly two-thirds of what an employee costs. Payroll taxes, workers' comp, the paperwork that must exist before day one, and how to let someone go without wrecking either of you.
Understand
The true cost, and the law you are now inside.
Practice
Hiring, onboarding, paying and correcting.
Create
A properly employed person.
Evidence
A first payroll run, filed and paid on time.
Know what it really costs
People budget the wage and are ambushed by the other third.
- Understand45m
Work out the fully loaded cost
Wage, plus your half of FICA (7.65%), plus federal and state unemployment tax, plus workers' compensation premium, plus any benefits, plus payroll software. Then add the unbillable hours: training, supervision, fixing early mistakes.
You’ll have:A fully loaded cost for the role you want to fill.
- Understand30m
Check the break-even with a wage in it
Recalculate how many jobs a month you now need. Payroll is fixed and work is not — that gap is what kills growing trade businesses, not slow months.
You’ll have:An updated break-even, and months of payroll held in cash.
- Understand45m
Settle employee versus contractor in writing
The tests turn on control: who sets the hours, who supplies the tools, who can work for others. Read your state's actual test and write down which one your arrangement is and why. Misclassification is back taxes, penalties, and an uninsured injury claim.
You’ll have:A dated written classification decision.
8 more actions · 7h of work
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Do it legally
Most of this must exist before their first hour, not after.
- Create1h 30m
Register as an employer
- Create1h
Get workers' compensation in place
- Practice45m
Collect the day-one paperwork
- Create1h
Set up payroll before payday, not on it
Manage a person
Hiring is the easy half.
- Create1h
Write the job down before you advertise it
- Practice30m
Give feedback weekly, in small pieces
- Understand45m
Learn how to let someone go properly
- Evidence30m
Run one full payroll cycle on time
Tools this journey uses
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