Hiring an intern or some short-term help might sound like a simple way to lighten the load this summer. But if you don’t get the payroll and tax stuff right, you’re asking for an expensive mess.
We’ve seen it too many times. Someone brings on a student, a neighbor’s kid, or a part-time cousin and thinks, “It’s no big deal.” Fast-forward to tax season, and suddenly the IRS wants answers.
Here’s what you need to know before anyone clocks in.
1. If You’re Paying Them, They’re an Employee. Period.
Doesn’t matter if they’re part-time, short-term, or still learning the ropes. If you’re giving them a paycheck, the IRS says they’re a W-2 employee.
That means:
- You need a W-4 for tax withholding
- You need an I-9 to verify they can legally work
- You’re on the hook for Social Security, Medicare, and unemployment taxes
- You’ll need to issue a W-2 in January
Yes, even if they’re only working for two weeks.
2. Thinking of Skipping the Paycheck? Careful.
Unpaid internships sound nice in theory, but legally, they only work under strict conditions. Federal guidelines say the intern must benefit more than the business.
If they’re answering phones, packing boxes, posting on your social media, or doing anything that saves you time or earns you money… they should be paid. Otherwise, you risk violating labor laws.
And if you’re in a state like California or New York? The rules get even stricter.
3. Seasonal Help Still Needs Full Payroll Setup
Seasonal help still comes with all the usual responsibilities. You’ll need to withhold both federal and state income tax, pay your share of FICA taxes (that’s Social Security and Medicare), and handle unemployment insurance.
On top of that, you still need to follow labor laws, including overtime rules, even if your new hire is part-time and only sticking around for the summer.
If you don’t already have payroll set up, don’t worry. We do this stuff all the time. Just don’t wait until payday to start thinking about it.
4. Can’t I Just 1099 Them? Probably Not.
Unless that person is completely independent (setting their own hours, using their own equipment, and working without supervision) they are not a contractor.
If they show up when you tell them to, work on your systems, and follow your instructions? That’s an employee. Trying to skirt that with a 1099 opens the door to audits and penalties.
5. Make Your Life Easier by Planning Now
The biggest mistake we see? Business owners wait too long. Then they are stuck googling payroll forms the night before payday. Or worse, trying to retroactively clean up a payroll mess months later.
If you’re bringing someone on board, even short-term, let’s set it up the right way from day one. It will save you time and potentially a ton of money.
You’ve Got Enough to Manage
Hiring summer help is smart. But ignoring the payroll and tax side? That’s how a good idea turns into a costly problem.
Get the forms done. Set up payroll correctly. You don’t need to overcomplicate it, but you do need to handle it properly.
Need help getting this all sorted out before your intern starts?
Grab a spot to chat with us now and cross this off your list.
