Taxes, Contracts, and Employees – Practical Advice

Today, I’m going to talk about taxes, contracts, and employees.

First, a disclaimer: I am neither an accountant nor an attorney. You should always consult one of those professionals.

I’ve been hiring VAs since 2005. My accountant marks all their salaries under the line item “subcontractors.” Because they’re in the Philippines, they don’t need a 1099. So, outside of that line item, there’s no other tax reporting needed.

There’s the W-8BEN form. It’s just something they need to fill out to tell the IRS they’re not Americans, so they don’t have any U.S. tax obligations.

Are Filipino VAs employees or subcontractors? I treat them like they’re my employees. But legally, and in every way that matters, they are subcontractors. So, there’s no standard. How you set things up in your business is up to you. You’re not legally obligated to give them 13th-month pay and all that unless you have a business in the Philippines. I just give them these benefits because I believe being generous is good—and it encourages loyalty.

Contracts and NDAs. I don’t use a contract with my people because I’m lazy and because, in my experience, they’re not really helpful. It’s not even enforceable unless you’re going to go to the Philippines to enforce it.

Your situation might be different, but if you want to use one, it’s fine. We have a sample contract in OneVAAway, plus a bunch of sample documents you can use.

But you shouldn’t worry so much. The Philippines is a super compliant country. I’ve seen hundreds of thousands of people outsource. Yes, we’ve seen problems, but most of them are the employer’s fault. Sure, there are bad Filipino workers out there, but based on our experience, most of the time the issue is with the employer.

If you have questions about outsourcing, check out my book: Outsourcing Lever. It’s free. It’s only around 100 pages. And if you want a physical copy, just pay for shipping and I’ll send you a copy of my book.

And if you want to see more videos, check out our YouTube channel or our Facebook page for more outsourcing tips. You can also check out how to get started on hiring Rockstar Virtual Assistants.

About John Jonas

John Jonas is a long-time outsourcing expert and the creator of OnlineJobs.ph.

Since 2005, John has taught hundreds of thousands of entrepreneurs how to profitably delegate to VAs in the Philippines (and get their lives back in the process).

With help from his own VAs based in the Philippines, John has created an outsourcing empire that allows him to work 17 hours/week and to spend most of his time with his wife and 5 kids.

Find John at JohnJonas.com and Facebook.

If you liked this you’ll probably also like reading

• • • Simplified Taxes- Another Way Outsourcing Saves Your Business
    • Should I Use A Contract When Hiring A Virtual Assistant? – Practical Advice
    • Do I Pay A VA Hourly or Salary? There’s A Big Difference – Practical Advice