If you have employees, you will have to pay employment taxes – taxes that you withhold from your employees’ wages to pay local, state, and federal taxes.

The type of state and local taxes will vary depending on your city and state, Federal taxes include the following:

• Federal income tax withholding: Withholding acts as a prepayment of tax an employee will owe at the end of the year. A refund is issued if the withholding was greater than the tax owed. To figure how much to withhold from each wage payment, use the employee’s Form W-4 and the methods described

With a virtual office, you may want to consider a Virtual Assistant (VA). A VA is a secretary that has their own virtual office. They can be hired on an as-needed basis, or for an agreed amount each day, week, or month.

The benefit of using a VA is that you only pay for the time worked and not the time waiting for a phone to ring as with traditional secretaries. In addition to flexible hours and reduced costs, VAs offer a wide range of skills. Some offer basic data entry while others can provide accounting or even web design.

When hiring a VA, be sure to see samples

Even if you know that you need the extra help, you’ll still need to consider whether you can afford to hire a new full-time employee. Remember, ‘Overheads work on two legs!’ In other words, hiring an employee means salary, benefits, taxes, and worker’s compensation. Staff is likely to be your most expensive cost, so choose well and don’t employ more than you absolutely have to.

Once you have determined how much an employee will cost, you will need to estimate how much money that employee will make in the first year. If the employee is a sales person, then you should determine how many products you believe he or she can sell in that time.