For most companies, staffing is one of the more expensive aspects of operating their business.  Therefore, recognizing the right type of staff to add and then in turn providing them with the appropriate wage or salary is critical. 

It is worth the time to investigate the right size compensation for each employee. 

Additionally, there are a number of ancillary considerations with payroll including benefits and payroll related taxes.  So, spend some time here carefully analyzing the addition (or in some cases, the deletion) of staff.

You will have the ability to add benefits (or not), determine the amount of both federal and state payroll tax amounts, the amount of wage of salary increases (on an annual basis), and the amount of stock options you may award to key staff members.  Alternatively, if you do not wish to grant any stock to an employee but highly value them, you may consider awarding them with Phantom Stock as part of their compensation.

Based on your various inputs on adding staff members, their costs will be shown primarily in the COGS/COS and in the S,G & A line items on the income statement.  Additionally, any payroll taxes that are paid on a quarterly basis will be seen on the Cash Flow and Balance Sheet.

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