We have to remember that to a small business the tax burden is more transparent. They, the sole employee (very small company), has to pay the standard federal taxes, social security, and Medicare out of their gross wages like the rest of us, but they also have to pay the employer match half of the social security and the unemployment tax.
Dear gpburdell1195,
The sole proprietor or S corp or LLC with just one worker - the owner, has the same compensation burden as for any other worker. Whether the employer side of payroll taxes eventually goes back to the worker or the customer (in the form of reduced prices), it's the same thing for the owner.
And, as a sole proprietor or an S Corp or LLC, if one doesn't officially pay oneself a salary reported on a W-2, as long as the owner pays both sides of payroll taxes, one doesn't pay unemployment insurance. That actually saves the owner a very small amount.
sitetest