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I pay my independent contractors 10% on retail they sell. Do I need to set up payroll for this

I pay my independent contractors 10% on retail they sell. Do I need to set up payroll for this? I want to be able to track who sells what, but no one sells a whole lot. 

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That all depends in what field you are operating, and if your independent contractors depending on your state are actually properly qualified as independent contracters.

Life is too short to eat boring cheese.

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Square Community Moderator

Welcome to the Seller Community🎉

 

It sounds like you're looking for advice from other sellers on this one, so hopefully someone pops in with some tips, @Lenfert04!! Feel free to get in touch with our team directly - I'm sure our Payroll team wouldn't mind walking you through some answers to your questions if you give us a call. If you'd like to reach out, please log into your Square account and head here.


Calling in reinforcements...
@DavidMellow @DaveMellow @GourmetOnWheels @JupiterGames @shopfybr @page158 @Pesso @TheTShirtLady @vinesandrushes

Valentina
Community Moderator, Square
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Best Answer

That all depends in what field you are operating, and if your independent contractors depending on your state are actually properly qualified as independent contracters.

Life is too short to eat boring cheese.

View Best Answer >

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I own a hair salon. Each girl rents a booth from me and pays weekly. I sell my products in there like shampoo etc. When my girls sell an item I pay them 10%. It’s really not very much in the end. My goal is when one of the girls makes a sale, they can log in on the iPad and type in there code. That way I can keep track of who sells what. I didn’t know if I needed to do that by payroll or if bc the percentage is so low maybe there was another way to keep track with out using payroll?

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In California this the the new law:

So to begin with, AB 5 requires any bona fide independent contractor to obtain their own, separate “business license, in addition to any required professional licenses or permits for the individual to practice in their profession.”  In addition, the contracted individual must be able to show that they have “the ability to set or negotiate their own rates for the services performed”, “the individual has the ability to set the individual’s own hours”, “the individual is customarily engaged in the same type of work performed under contract with another hiring entity or holds themselves out to other potential customers as available to perform the same type of work”, and “the individual customarily and regularly exercises discretion and independent judgment in the performance of the services.”

Beyond these general requirements for all independent contractors, AB 5 has specific elements that apply only to our industry, requiring each booth renter to show specific ways in which independence from the salon owner is further established.    

In order to be a validly classified booth renter in California, that individual must set “their own rates”, They must process “their own payments”, and be “paid directly by clients.”  Moreover, booth renters must set “their own hours of work and have sole discretion to decide the number of clients and which clients for whom they will provide services.”  They also must have “their own book of business and schedules their own appointments”, maintain “their own business license for the services offered to clients,” and “if the individual is performing services at the location of the hiring entity, then the individual issues a Form 1099 to the salon or business owner from which they rent their business space.”

Life is too short to eat boring cheese.
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Super Seller

@Lenfert04 @There’s also the new Commission Feature, so I’d definitely recommend looking into that!

Pesso
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