The Triton
www.the-triton.com
TRITON SURVEY: Employee or contractor
Do you only employ yourself through your corp. or other crew, too?
Just me – 69.5%
Do the expenses of the boat go through your corporate account?
January 2013 C11
If you work through your corporation, do you have other clients/employers?
No – 57.4%
No – 79.4%
Some crew – 25.4%
All crew – 5.1%
Yes – 20.6%
Yes – 42.6%
Even as independents, some captains get yacht benefits SURVEY, from page C10 who tells them not just what they want to hear but what the issues and consequences are for each type of business arrangement,” said the captain of a yacht 120-140 feet. “A good accountant is worth their weight in gold,” said a captain in yachting more than 10 years. Among those who don’t use a tax professional – 17.3 percent – all are employees or independent contractors. None operate under small businesses. This was another question suggested by a captain, and perhaps we should have delved a bit deeper to learn more. If you work through your corporation, are you eligible for employer offered benefits? The largest group – 44.4 percent – are not eligible for benefits such as health insurance. About a quarter more don’t get the benefits directly but are reimbursed by the owner for such expenses. It was interesting to note that 30.2 percent of captains noted that they are eligible for employer-offered benefits, even though they are employed through their own corporation. As previously noted, it would have been interesting to learn more about how that works. We were curious to know if the “boss insists” option to that question asking why captains collect their income in a certain way was really that strict, so we asked Have any employers refused to pay or hire you through your corporation as opposed to paying/ hiring you as an employee? The bulk of respondents – 92.8 percent – said no. That left 7.2 percent of captains who have run into this situation in their careers. And because there is a perception (real or not) that U.S. captains may not earn as much in a career because
of U.S. tax rules about foreign-earned income, we wanted to know if working for U.S. employers mattered in the grand scheme of things, so we asked Is working for a U.S. employer easier or more difficult than working for a non-U.S. employer as far as the employer-employee structure is concerned? Most captains – 53.1 percent – said there was no difference. A little less than a third – 31.3 percent – said U.S. employers were easier. And about 15.6 percent of respondents said U.S. employers were more difficult. Another thing queried captains wanted to know was Do you only employ yourself through your corporate entity or do you employ other members of your crew? Most – 69.5 percent – employ just
themselves. But the bulk of the rest – 25.4 percent – employ at least some crew through their corporation. While we didn’t ask this question specifically, that portion may include many couples. Just three respondents – 5.1 percent of respondents – employ all crew through their corporation. We didn’t ask how many “all” was, but two of the three are on vessels 80-100 feet so it’s possible they are couples. One respondent, however, runs a yacht of 120-140 feet and pays all the crew through his LLC. For those captains who operate through a corporation, several wanted to know of their colleagues Do the expenses of the boat go through your corporate account? Most – 79.4 percent – do not. Still, that means more than 20 percent do.
One of the big issues for the U.S. tax man when it comes to independent contractors is whether that person has other clients. Arguably, if an independent contractor has only one client that he derives all his income from, he technically should be an employee. So we asked If you work through your corporation, do you have other clients/employers? Most – 57.4 percent of respondents – said they do not. About 42.6 percent said they do. Lucy Chabot Reed is editor of The Triton. Comments on this survey are welcome at lucy@the-triton.com. We conduct our monthly surveys online. All captains and crew members are welcome to participate. If you haven’t been invited to take our surveys and would like to be, e-mail lucy@the-triton. com to be added.