Are you looking to hire new employees? Are you having issues attracting people? Then you need to make your business attractive to employees. Simple to say, harder to do. Of course! Especially if you are a start up, payroll can be one of your top expenses. In order to make your business attractive for employees, you must offer them better benefits than your competition. You may be thinking that this means increasing your expenses even more. Well, not necessarily. There are multiple ways to give more using tax deductible instruments or qualified plans.
Giving new employees a signing bonus is definitely one way to make your business attractive. Many business use this in their recruiting efforts. And yes, it works. Whether it’s a $500, $1000 or more, it something that people like and can use right away. On the negative side, it is a one time deal. And even though the signing bonus is tax deductible according to the IRS rules, what about next month, year and so on?
This is how the IRS looks at signing bnuses:
“The Code and regulations provide that amounts an employer pays an employee as remuneration for employment are wages, unless a specific exception applies. … Salaries, fees, and bonuses, for example, are all wages, if paid as compensation for employment.”source: IRS.gov Document, page 6
Long Term Bonus Ideas
If you are not looking to attract temporary or seasonal employees only, then you need to consider some long term bonus ideas, which will make your business attractive for employees. One of these is a qualified retirement plan. For your executives, you can take advantage of a life insurance product to improve your SERP. A life insurance product can greatly improve your attraction to employees. And in addition, it will also increase your executives loyalty.
There are several other plans available, which could be a win win for you and your employees from the tax perspective. But those are better discussed on a more personal level.
Make Your Business Attractive For Employees
Your number one objective in business is to be profitable. In order to remain profitable, you need a reliable team. Increasing your employee commitment and loyalty levels through various benefits is a perfect way to achieve this objective. Reach out to us using the form below and we’ll have one of team members get in touch with you within 24 hours to discuss your unique needs.