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For contractors are thinking of spinning off new divisions or creating subsidiaries: If you now own 2+ entities and some employees work for both, you may be paying too much in payroll taxes without realizing it.

For contractors are thinking of spinning off new divisions or creating subsidiaries: If you now own 2+ entities and some employees work for both, you may be paying too much in payroll taxes without realizing it.

The Fix: Use a Common Paymaster

Run payroll for shared employees through one entity. This prevents both companies from paying FICA on the same employee once their combined wages exceed the Social Security wage base ($176,100 for 2025).

Quick Example

Your officer earns $250,000 total:

$150,000 from Company A

$100,000 from Company B

Without a common paymaster: both companies pay full FICA → $19,125 total.With a common paymaster: FICA is calculated once → $14,544.Savings: $4,581 on just one employee.

Multiply that across multiple high-earning staff, and the savings get big fast.

Qualification Rules

To use a common paymaster, your companies must meet all three:

50%+ of officers overlap

30%+ of employees work for both

One company owns 50%+ of the other

Tip: Pay all employees through the common paymaster for cleaner compliance.