Do you have 1099 employees and are thinking about transitioning over to W2s? What are the benefits of having W2 employees? How can your practice grow with W2 employees more so than with 1099s?
In this podcast episode, I speak about how hiring W2 clinicians benefits your practice.
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In This Podcast
- 1099’s versus W2’s
- 5 reasons for hiring W2 employees
1099’s versus W2’s
The biggest difference here in the tax world has to do with the way that you define the work they do, the pay rates, and the taxes that you pay for each one.
- Typically gets paid a higher percentage for the billable time, which is the in-counseling time where they sit with clients.
- Does not get paid for work outside of their standard hours. This could be if they attend a staff meeting or a marketing event.
- Pays at least 30% taxes, and this can vary from state to state.
- Does not get benefits. You can offer benefits as an employer but those would be perks.
- A W2 employee typically gets a flat rate for every billable hour.
- The boss of a W2 employee is responsible for paying them for all the work they have completed, which includes work outside the in-counseling billable hours, such as attending staff meetings and marketing events.
- Pays less tax, around 15% in tax varying from state to state.
- Gets benefits included. If you as the employer have W2 employees you should offer them workman’s comp, depending on the laws of your state.
The overall difference between 1099 and W2s is the control that you have over the work that they are doing; the 1099s are essentially their own business that you hire to provide a service to clients in your practice whereas W2s are people that you hire and direct.
5 reasons for hiring W2 employees
- RECRUITMENT: It helps in the hiring process when people see you offer steady income and consistent benefits, they would want to come work at your practice.
- RETENTION: You have better retention with W2 employees because you are offering them a lot more than just clients, you are offering them teaching, stability, marketing, and culture to be a part of.
- CONTROL OVER DELIVERY OF SERVICES: You have some more control over the types of services that they offer, and the work they do. You can tailor it to what is best for the client.
- FINANCIAL STABILITY: Having W2s gives you more financial stability. You spend less money on tax percentages when you have W2s, and you can save money purchasing bulk supplies and so forth because everything is used by everyone.
- ABILITY TO OFFER BENEFITS: You can provide benefits to your employees which will ultimately make them work more often because they enjoy their job.
- Carole Cullen on Launching a Successful Group Practice with a Niche | FP 71
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Meet Whitney Owens
Whitney is a licensed professional counselor and owns a growing group practice in Savannah, Georgia. Along with a wealth of experience managing a practice, she also has an extensive history working in a variety of clinical and religious settings, allowing her to specialize in consulting for faith-based practices and those wanting to connect with religious organizations.
Knowing the pains and difficulties surrounding building a private practice, she started this podcast to help clinicians start, grow, and scale a faith-based practice. She has learned how to start and grow a successful practice that adheres to her own faith and values. And as a private practice consultant, she has helped many clinicians do the same.
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Faith in Practice is part of the Practice of the Practice Podcast Network, a network of podcasts that are changing the world. To hear other podcasts like Empowered and Unapologetic, Bomb Mom, Imperfect Thriving, Marketing a Practice or Beta Male Revolution, go to practiceofthepractice.com/network.