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The legal marijuana industry is booming, with over 321.000 people working full-time in the industry. However, there are still challenges that need to be addressed. As an owner of a marijuana-related business (MRB), among a list of important responsibilities, you also need to know how to properly manage benefits and bonuses for your employees.
Fortunately, you can rely on a growing number of cannabis payroll platforms that can help you take control of the whole process and come up with a suitable plan. Before you partner up with one of the providers, read on to learn how to handle employee incentives.
Incentive packages are known to be one of the most effective ways to show appreciation and boost the morale of your staff. Of course, there are other benefits that you can count on when you come up with a sound plan, for instance:
Offering a monetary incentive gives your employees a sense that they are included in your success. They will work harder to make sales, walk an extra mile for your clients, and enjoy their work more, knowing that they will be awarded for their effort.
Competition doesn’t have to be a bad thing if you set the boundaries and rules of fair play. If you do lead by example and reward top performers according to a list of criteria, you’re on a good way of empowering your whole team. You’ll create leaders that will share their skills and make the whole team more efficient.
You can use monthly or quarterly incentives to encourage your team to meet the mark. This might not only motivate the most hardworking or experienced team members, but also the novices and those less motivated. By doing this, you ensure that the quality and skills are equally distributed among your staff.
In the emerging and highly competitive marijuana industry, you want your MRB venture to stand out from the crowd. A low turnover rate is one of the signs of your success. A retention bonus is a safe way to keep the most accomplished staff members by your side. On top of that, you can motivate them to bring other talented budtenders to your company by offering referral and onboarding incentives.
The main decision you have to make is how you’re going to award the extra money on top of the regular paycheck. You can either go for a separate payment or issue the compensation by including it on the payroll check.
Keep in mind, as an employer, if you want to grant a certain amount, you’d first have to subtract the payroll taxes, and then gross up the incentive. When you do a gross-up, the result will be that the employee receives the exact amount after-tax deduction.
The math of bonus calculation is usually quite simple, and there’s no big difference in the marijuana industry: you can take a percentage off the basic salary, or off the sale commissions. A more complex question is the criterium, with most bonuses being based on performance.
If some of your employees did an amazing job reaching all targets on a specific project, they might be qualified for a reward. There are also bonuses that are paid on an annual basis that show your appreciation for long-time employees. Either way, you have to include the payroll taxes if you want to ensure your employees receive the full amount. Keep in mind that the bonus counts as supplemental income and is subject to a federal tax at a 22% rate.
Convenient and user-friendly payroll services can mean the difference between your MRB becoming a success or a flop. Fortunately, you can easily outsource this part of your operations to Green Leaf Business Solutions.
We can help you get acquainted with the MRB payroll process and give you the tools and information in order to avoid some of the most common payroll pitfalls. By teaming up with us, you’ll be able to optimize your HR operations, handle your banking and accounting needs with ease, and help you stay compliant with all the regulations. Join us today and we’ll be happy to help you expand and establish your place in the market!