Pay rate for new employee.

[TaxmannEA]

We are going to  be hiring 2 new part-time preparers for the upcoming season.  The boss has asked me what a fair hourly rate would be, I'm sort of at a loss as in over 40 years in the business I've never been paid hourly. I either got a commission or salary. We are in a rural area in central Illinois, so the rates here are not like those in the urban areas. I just thought I'd ask here as many of you probably have the same situation.

[Pacun]

Double your state minimum wage for your area.

[Yardley CPA]

I live right outside Trenton, NJ in the suburbs of Philadelphia.  New Jersey is enacting a new law which will find it's minimum wage rise to $15.00 by 2024.  On my side of the Delaware River, the minimum wage is $7.25.  I think $20 per hour is reasonable and, in your case,  falls right in line with what Pacun suggested.  

 

 

[schirallicpa]

I'm in same boat - in NYS the minimum will be pushed to $15 soon enough so that's where I'm starting.  The hard part is - like you - I'm in a very rural area and also have not hired someone by the hour in years.  I recently loss my assistant of 13 years because we are in such a slumppy economy here in Western NY.  I really really dread dealing with a new person.

[Gail in Virginia]

Same as the answer to every tax question. It depends.  

Here in rural VA, the fast food places start people at around $8 to $8.50 per hour.  So if I hire an inexperienced teenager to make copies and answer the phone, file, etc. I am looking at that as my base pay.  If I hire someone that I am training to do bookkeeping and tax preparation, I would probably start around $10 per hour.  If it is someone who knows how to do taxes, and will require a minimum amount of supervision and training in my procedures, I would probably start at $12 to $15 per hour, depending on experience and education.  And also depending on whether they were working part time because they are picky about the hours or because I am.  If it is someone good, and I want to keep them, I would pay more than if they are just adequate and can be replaced easily. 

[Lee B]

1 hour ago, Gail in Virginia said:

Same as the answer to every tax question. It depends.  

Here in rural VA, the fast food places start people at around $8 to $8.50 per hour.  So if I hire an inexperienced teenager to make copies and answer the phone, file, etc. I am looking at that as my base pay.  If I hire someone that I am training to do bookkeeping and tax preparation, I would probably start around $10 per hour.  If it is someone who knows how to do taxes, and will require a minimum amount of supervision and training in my procedures, I would probably start at $12 to $15 per hour, depending on experience and education.  And also depending on whether they were working part time because they are picky about the hours or because I am.  If it is someone good, and I want to keep them, I would pay more than if they are just adequate and can be replaced easily. 

Wow, minimum wage in my area of Oregon will $ 12.00 per Hour July 1st. The person that you would pay $12 to $ 15 per hour, I would have to pay $ 20 to $25 per hour and I would have difficulty finding someone !

[jklcpa]

As Gail suggested, prior experience and/or skills, and the skills the job requires would all factor in.

One method you could use to see if your hourly rate is within reason:  start with the amount you would be willing to pay on an annual salary basis (based on expertise, skill set, or the cap for the position) and divide by annual working hours to arrive at an hourly rate, and compare to other jobs considering your local economy.  Adjust from there.

[Abby Normal]

It's pretty hard for anyone, anywhere in America to live on less than 30k, roughly 15/hr. The poverty rate for a single person is about 12k.

Add up rent, utilities, transportation, clothing, health care, taxes, etc. in your area and back into your own minimum wage.

We start everyone at $15/hr.

[Roberts]

I'm going to be of no help but about 5 years ago a CPA from a few miles away called me up, saw I was an EA and offered to hire me to do some tax returns for him. The guy said he could go as high as $12 an hour. I laughed, he got insulted and said I didn't have a work ethic.

Thing was, I wasn't looking for a job - he called me completely unsolicited.

[Patrick Michael]

In addition to an hourly rate, which is a little higher than minimum wage, I add a $5 per completed return bonus at the end of tax season if they stay for the entire tax  season.  I found it increased productivity, reduced turn over, and the more experienced preparers who can crank out the returns end up with a higher hourly rate at the end of the year than the going rate in this area.  

[JohnH]

20 hours ago, Roberts said:

I'm going to be of no help but about 5 years ago a CPA from a few miles away called me up, saw I was an EA and offered to hire me to do some tax returns for him. The guy said he could go as high as $12 an hour. I laughed, he got insulted and said I didn't have a work ethic.

Thing was, I wasn't looking for a job - he called me completely unsolicited.

He offers "up to" $12 an hour for an experienced EA and then accuses you of not having a work ethic?  I assume that caused you to laugh even louder.

[Catherine]

2 hours ago, JohnH said:

I assume that caused you to laugh even louder.

Or, asked him to call back once he sobers up!

[Gail in Virginia]

On 12/10/2019 at 3:28 PM, Roberts said:

I'm going to be of no help but about 5 years ago a CPA from a few miles away called me up, saw I was an EA and offered to hire me to do some tax returns for him. The guy said he could go as high as $12 an hour. I laughed, he got insulted and said I didn't have a work ethic.

Thing was, I wasn't looking for a job - he called me completely unsolicited.

For $12 an hour, I work really slowly......

[JohnH]

It hasn't always been this way, but at this stage in my life....

for $12 an hour, I'd just as soon take the time off.

[schirallicpa]

2 hours ago, Gail in Virginia said:

For $12 an hour, I work really slowly......

I have a very bad habit of accusing hourly workers of milking their time.  And apparently my daughter picked up on my cynicism at a very young age.

We were on our way to a Christmas time evening celebration in the next little town from us where we were meeting my parents.  We were running late, and then got behind a plow truck.  Now if you aren't aware, when those guys are plowing, they are supposed to go 35 mph.  But - really - we're in a hurry and we're running late!  Darn it.  

We got to the church and made our way into the pew where my parents were sitting.  It was very very quiet and lights were turned down and candles were burning.  

My daughter (She was probably six or seven y/o) - very loud "Sorry we're running late, Grampa. We got stuck behind the plow truck and you can tell they get paid by the hour!"   

People were snickering all thru the church.  I was embarrassed.