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My wife met with the owner of a business(25-30 people strong; turnover given by employer is 3-4 million). She liked the office but when she talked with the owner about the compensation he threw her a proposition which neither she nor I are sure if its even possible. So, in her line of work, she gets a % of what the business makes each day. The owner tells her that instead of giving her x% he shall offer her x+3% and then she give him back the 3%, which he than shall then pay on her behalf to the government. This isn't the general withholding (income tax + ss + medicare) we're talking about. I suspect he's talking about the payroll tax that an employer has to pay in addition to the withholding (which he does on the employee's wages). He didn't give her any exact name for the 'tax' and neither did he say if the 3% is cumulative or just made up of 1 element.
The owner says this is completely legal. I've my doubts. Have you come across anything like this in your work life?
I don't get it either. The business pays her an additional 3% so she gets taxed on that and she has to pay the owner back the full 3%. I don't see why the employer wouldn't just keep the money and pay directly.
Makes his overal #s look low thereby reducing his liability (depending on how he's structured the whole thing). If he's suggested this then it definitely means he's see's reducing his tax liability by this way.
What I don't understand is this even legal? He claims its legal and that he's doing it with other employees.
So, other than the witholding taxes (which anyway is the employee's tax) what other payroll taxes (and what %s) does an employer have to pay from his own funds.
My wife met with the owner of a business(25-30 people strong; turnover given by employer is 3-4 million). She liked the office but when she talked with the owner about the compensation he threw her a proposition which neither she nor I are sure if its even possible. So, in her line of work, she gets a % of what the business makes each day. The owner tells her that instead of giving her x% he shall offer her x+3% and then she give him back the 3%, which he than shall then pay on her behalf to the government. This isn't the general withholding (income tax + ss + medicare) we're talking about. I suspect he's talking about the payroll tax that an employer has to pay in addition to the withholding (which he does on the employee's wages). He didn't give her any exact name for the 'tax' and neither did he say if the 3% is cumulative or just made up of 1 element.
The owner says this is completely legal. I've my doubts. Have you come across anything like this in your work life?
Counter that he gives here x+6% and she gives him 3% back. This is a negotiation. Your wife already knows he wants to hire her, so now is the time to dicker for compensation.
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