Masonry Magazine June 2001 Page. 28
EMPLOYEES
PARTNERS IN PROFIT$
By Mark E. Battersby
To motivate their employees many companies offer a number of nonmonetary fringe benefits ranging from pension plans, health and life insurance, sick-leave pay, credit unions to health and safety programs. In fact, figures circulated by the U.S. Chamber of Commerce show that wages account for only two-thirds of a worker's earnings; the other third is in the form of fringe benefits.
Keeping in mind that, according to the U.S. Department of Labor, there are more than 5 million firms with fewer than 100 workers. However, only slightly more than one million of those so-called "small" firms offer pension plans to their employees.
One way that many masonry contractors have discovered to compete with the fringe benefits offered by larger employers is to share the wealth. Sharing the wealth or the profits of a masonry business can take many forms.
Sharing can mean giving a simple bonus to all employees. Or, far more rewarding to all concerned, that sharing might take the form of a formal "profit sharing" plan. A formal plan to share the profits of the masonry business will further increase the value of that generosity through tax breaks for both the recipient and the employer.
BASIC BONUSES
Sharing the wealth of the masonry business in the form of a bonus is, of course, a path followed by many masonry contractors. A bonus is usually tax deductible by the contractor as compensation for services performed. That same bonus in the hands of the recipient is, however, taxable income subject to withholding.
Establishing a formal plan, in whatever form chosen, can guarantee the