Daniel HonanFounder, Profitable Painter CPA PLLC · I help painting contractors increase profits & cash flow while reducing taxes♦ Bookkeeping ♦ Tax

Painting Biz Owners: How to Save on Payroll Tax while rewarding your team with Performance-Based Pay

Name: Painting Biz Owners: How to Save on Payroll Tax while rewarding your team with Performance-Based Pay
Uploaded: 2023-09-14T13:15:01+00:00
Duration: 20 s
Channel: Daniel Honan
Description: In this segment, the presenters advise painting business owners on how to reduce payroll tax liabilities by replacing traditional cash bonuses with…

14 Sept 2023 · 0 min

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In this segment, the presenters advise painting business owners on how to reduce payroll tax liabilities by replacing traditional cash bonuses with non‑monetary employee appreciation events tied to performance. They suggest organizing regular (monthly, weekly, or annual) gatherings or outings for crews that consistently beat budgeted hours, allowing the business to claim an employee‑appreciation deduction instead of paying taxable bonuses. This approach not only saves on payroll taxes but also fosters team cohesion and provides a simple, repeatable way to reward high‑performing staff without complex bonus calculations.

And don't forget the increased payroll taxes. If you want to kind of save on payroll taxes, you could have an annual party or annual event in your business where you show employee appreciation, and maybe you could tie budget hours to that event. And instead of paying out monetary bonuses, you maybe do some sort of event that you would hold for the high performers that, you know, consistently beat budgets.
It's a more efficient way of using that money you've saved because, like you mentioned, don't need to worry about payroll taxes on that. Employee appreciation deduction instead of paying out bonuses.
Be maybe a monthly or weekly thing where you're just taking out the crews that beat the budget and then, um, just making it a cool thing to do instead of having to worry about the calculations of bonuses and paying all the payroll taxes.
And the team building aspect comes as a bonus to you. Underestimate the, the value in having everybody get together outside of direct work environment to build those relationships and friendships. Very important.