I'm doing a home daycare, but would like to get into a separate building in the next year or so. My question is this. If I do that, I will hire a few others to help me. Maybe two other people to start. I'm curious as to how taxes work. Right not, I'm getting taxed once and the rest is my profit. A friend, who is not in business, is telling me if I hire more people I will have to pay taxes twice. For example, now if I'm getting a 100 per week child and I pay say 20 dollars in taxes. My friend is saying, I will paying more taxes on my pay than that on my pay. If anyone employees more than one person can you tell me how many times you pay tax on the income? It will help me to set a guide line. There's a big difference between getting 80 dollars after taxes and say 60.

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Assuming you are in the US, You need to research the rules for your state along with doing some research on the IRS website. You don't really get taxed twice. You pay state and federal income taxes on your net income each year when you file your taxes. When you have employees, you pay payroll taxes. Think about when someone works outside the home. They get a paycheck. On that paycheck, taxes are withheld. Their employer holds that money and sends it in to the IRS/State/SS. In addition, for some tax entities, there is an employer portion that also gets paid. If you are not up on wage laws, you will need to either spend some time researching or talk to an accountant/payroll person.

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Double taxation only comes into play if you form a C corporation. Otherwise, this is not an issue. You will need to pay all the payroll taxes when hiring employees: Social Security taxes, federal and state unemployment taxes and getting workers compensation insurance.

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