This is the 1st of a 3 part series to help you on your journey to Sugar Business Sweet Success! Whether you are new to the beauty industry or a seasoned pro, our goal is to guide you to make good decisions with your finances.
In this episode you will learn:
Episode 1: Employee or Independent Contractor
Category of Workers in a Salon/Spa
Employee
Straight Hourly Wage or Salary
Commission
Hybrid
Receives Form W-2 from employer
Income and payroll taxes are withheld
Employer pays half of federal and state federal tax
Independent Contractor
Straight Rate
Commission
Hybrid
Receives Form 1099 from salon/spa owner
No income or payroll taxes are withheld
IC is responsible for all taxes
Booth Renter
Leases space from salon/spa owner
Doesn’t usually receive compensation from salon/spa owner
Issues Form 1099 to salon/spa owner for rents paid (if $600 or more)
Responsible for all taxes
Why this matters
Employee Rights
Tax Evasion: non-payment of payroll taxes
How do I know if I am an employee or Independent contractor?
It’s all about Control!
General Tests:
Do you have to abide by their schedule?
Do you have to adhere to a dress code?
Do you have to follow specific salon training (systems and structure)?
Do you have freedom as to what services you provide and how you provide them?
Do you have to honor the salon or spa’s discounts, promotions and coupons?
Do you have to charge the salon rates?
Learn More from Kenesha Coleman, The Beauty CPA @thebeautycpa or on her info packed website The Beauty CPA!
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