Paying Your Coaches Correctly.
You want to pay your coaches fairly. You’re not trying to cheat anyone. But what you don’t like is having to sink so much money into W-2’s. Paying W-2’s is a financial and emotional headache. However, you also don’t want to get audited or in trouble with the IRS for tax evasion because that would be an even bigger headache. So what are you to do?
You MUST Pay Payroll Taxes.
Coaches are employees of your gym, not independent contractors. That means you have a legal obligation to pay payroll taxes. Deciding that you’re not going to pay a W-2 for no other reason than that you don’t want to pay payroll tax is not allowed. You are risking getting yourself into serious trouble if you are not paying your coaches a W-2. Any accountant who tells you otherwise is leaving you vulnerable to serious repercussions. However, there is something important to note…
Your Coaches Are More Than Just Employees.
I don’t mean this in some sentimental “our employees are family” type of way. You coaches have the basic duties that they just perform for the gym, but they also are likely doing tasks and jobs that they have a certain amount of flexibility on. If you have a coach who, for example, is a nutritionist as well, they can offer nutrition advice and assistance to clients on a schedule that THEY CONTROL.
What Does This Mean For Paying Coaches.
When it comes to tasks like that, your coaches operate as independent contractors. So for the profit your nutritionist makes off of nutrition advice, you don’t have to pay a W-2. You can pay a 1099. Doing that saves you money, and it also increases the coach’s profit. I’ve run the numbers hundreds of times, and hundreds of times this has made more money for everyone. It is choosing to be profitable. Are you courageous enough to make that choice?
To watch my full video, click below!
We will be offering a lot of advice on our page here, but we also would be happy to help you out on a more personal level. Feel free to hit us up if you need help preparing your taxes.
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