Employees vs Commissions

[Herkster]

At what point are you guys looking at adding staff? How much P&C (mostly personal lines and farm, a little commercial) commissions do you want before looking for extra help? Talking in administration type work, answer phones, handle some walk in questions/payments, be licensed, but be paid hourly.

And if you are adding a producer, are they a 1099 producer or do you have them on as w2 staff? Commission splits?

 

[adjusterjack]

And if you are adding a producer, are they a 1099 producer or do you have them on as w2 staff?

That question gets answered by the IRS rules on classifying employees or independent contractors.

irs employee vs independent contractor at DuckDuckGo

 

[Hawaii Agent]

I think the decision to hire comes down to the why. I hired when my book was in the low six figures. All of the agency principals that I spoke w/ thought I was crazy. My hire was to help to take the $10/hr. work off of my plate so I could concentrate on growth (not servicing or data gathering).

In terms of having an W2 vs. 1099, I've done both. It'll depend on what you're having them do. If you're able to get a 1099 contractor, that'll make your life much, much easier. Your expenses are easy to calculate, you're not worried about benefits, etc. You should offer at least 20% more than you would a W2 to make up for the lack of benefits (and payroll taxes that you're saving). Commission splits are fine too, just make them clearly defined and make sure that they sign a do not solicit agreement

 

[Herkster]

Thanks for the input!