Employee or Contractor? Proper New-Hire Designation Is Critical

Congratulations on filling that open position! Is your new hire an employee or a contractor? Did you know that the Internal Revenue Service (IRS) offers guidance to ensure employers get the designation correct? It is important to make the distinction, because a worker’s classification determines whether an employer will withhold income taxes for each of the employees’ payments. It also determines if the employer will be obligated to contribute to Social Security, Medicare, and unemployment tax for the new hire.

For additional information on employee and contractor designations, please visit the IRS’s page on this topic (https://www.irs.gov/newsroom/understanding-employee-vs-contractor-designation).

It is important for employers to understand the difference and make the proper designation. The IRS shares, “Classifying an employee as an independent contractor with no reasonable basis for doing so makes employers liable for employment taxes. Certain employers that can provide a reasonable basis for not treating a worker as an employee may have the opportunity to avoid paying employment taxes.”

Have questions? We are happy to assist.

The Benefits of Having an Employee Handbook

Currently, there are no state or federal laws requiring a small business to have an employee handbook. However, there are many benefits for doing so!

Employee handbooks provide a quick reference guide for a variety of valuable historical organizational information, current processes (external and internal), various guidelines, and other related items. They can be as elaborate or basic as a company desires.

Having an official employee handbook provides employees with an enhanced sense of security knowing they can reference all types of information confidentially. As an employer, it also makes your policies and procedures clear to your employees.

Payroll Service Solution’s HR Services provides comprehensive employee handbooks, designed specifically for each individual small business and your unique set of specifications. Via phone consultation with a dedicated human resources (HR) professional, your content needs are isolated, and a custom handbook is then created exclusively for your needs.

Do you already have an existing employee handbook? We will evaluate your handbook and provide you with a report of update suggestions to keep your handbook current.

Set Your Company Apart by Offering Good Health Insurance

A solid, complete benefits package will make your organization more attractive to potential employees, as well play an instrumental role in retaining current team members. Good, affordable health care offerings play a premier role in making a benefits package highly desirable and will set you apart from other companies when it comes to recruiting and holding on to quality talent.

Through our long-standing partnership with Haddon Planning Group, PSS offers many wonderful group insurance plans for small businesses to choose from that include single or combination programs for:

  • Medical
  • Dental
  • Vision

The licensed professionals at Haddon Planning Group will personally provide customized assessments of your small-business needs and make recommendations for the best but most affordable options available.

The PSS Referral Bonus Program – Get In on the Rewards

Cha-ching! Here’s a big shoutout of thanks to all our awesome clients who recommended our services to another small business. And, as a token of our appreciation, were awarded a $ 50 Amazon gift card!


Miss out on this round? Don’t worry, the program is still on and so is your chance to make a referral and be rewarded. Why keep silent about the best-kept payroll secret?

Earn Your Referral Reward in Three Easy Steps

  1. Tell your friends and associates about the company and the services we offer. You can even send them this link to our home page, http://payroll-solution.com.
  2. If they express interest and/or let you know that they want to learn more, contact Nicole Christmann at Nicolec@payrollservicesolutions.com or 215-624-0922 and provide their contact information; she will then answer any of their questions and get them signed up, letting you know this has happened.
  3. When your referral successfully becomes a new customer, our team will send you a $50 Amazon Gift Card or apply your $50 credit to your account.


According to information regarding ancient pay stubs, employees in Egypt and Mesopotamia used to be paid in beer and other commodities. Imagine having to trade for your own goods and services using the contents of cases of beer instead of the funds in your paycheck!

Contact Nicole Christmann at 215-624-0922 for any questions regarding information in this newsletter. Or, you can email her at nicolec@payrollservicesolutions.com.