To better understand how FICA tax is set up, keep in mind that the FICA tax, also known as the Social Security tax, is paid equally by the employer and employee. If you're a small employer and doing your own payroll, good quotes about yoga you'll also need to stay on top of changes in employment taxes. You'll also need a policy on maternity and/or paternity leave. Unlike vacation time, the number of sick days companies offer typically doesn't increase as the years go by, and if you set a policy of not carrying over unused sick leave to the following year, be prepared for a lot of sniffles in December. Make sure you set a policy and stick to it. So, we've talked about a lot of ways to set up a good benefit program for your employees and how your benefits and perks are often more important than the salary, but what will really stand out to potential employees? Defined-contribution pension plans base your employees' benefits on the amount of money contributed to the account. The insurance rates will be evaluated every five years to account for rising (or falling) average ages of employees, so rates may fluctuate depending on the demographics of the business.

If your business has fewer than 10 employees, you probably won't be able to purchase group life insurance. Paid time off is a very highly rated benefit, especially with so many workers trying harder to balance work and family life. As an employer, you can contribute up to 25% tax deferred of your employees' annual salaries (up to $40,000), and can set the plan up at any time during the year. Employees can contribute up to 25% of their salaries or a maximum of $40,000 per year. Take into consideration the impact it would have on your company to have employees out for extended periods of time with full pay because of stored sick or vacation pay, this in addition to having to cover for the loss of their productivity. You'll still establish base pay levels, but it may be slightly lower and you will build into that base the annual or quarterly (or any other interval) bonuses, commissions, or other types of shared cash compensation. Vacation time is accrued on a monthly or quarterly basis, and most companies use a calendar year to make their recordkeeping easier.

However, you might want to tie in a specific time period prior to the employee collecting this bonus -- for example, one-half after six months and the remainder after one year of employment. In either the paid vacation or PTO situations, employees would have to request the time off in advance, except for emergencies. Let's go over some of the other benefits you can offer your employees that will give your company a competitive edge in recruiting. In addition to regular benefits packages that include health insurance, vacation, and retirement plans, employees seem to be actively seeking companies who offer more of the things they value. The alliance purchases the health plan for its members (small businesses) and has a third-party administrator manage the plan. If you have 100 or fewer employees and offer no other retirement pension plan, the Savings Incentive Match Plan for Employees (SIMPLE) IRA provides a simplified way to make contributions to a retirement plan either for yourself if you're a sole proprietor, or for your employees. Some of the types of accounts that fall into this category include: profit-sharing pension plans, money-purchase pension plans, target-benefit pension plans, stock-bonus pension plans, ESOPs, Thrift savings pension plans, and 401(k) pension plans.

Think about your workplace and consider the types of accidents that could possibly occur to help decide what types and levels of disability insurance you should cover. There are currently three main types of health coverage you can offer to your employees: traditional coverage (fee-for-service), HMO (health maintenance organization), or PPO (preferred provider organization). The last health insurance option is the preferred provider organization (PPO). Employee stock purchase plans are another option for employers who want to lure new recruits. Another thing to consider is that there is no corporate deduction when the employee exercises the option. Reasonable accommodations are another thing you need to be aware of. The good thing about profit sharing plans is that they allow you to decide if and how much your company contributes to the plan. About 40% of companies offer profit sharing plans. Phantom-stock plans operate in a similar manner as the other stock options, but the risk of sharing equity in the company isn't there. There should also be at least $1 million in coverage.