Welcome to 420payroll.com!
A year and a half in visualization, planning, design and execution and today we finally get to publish our results. Please check out our newly launched web site located at 420payroll.com. Our desire to create a Cannabis friendly payroll service has culminated with our new home on the web. Please give us your feedback and ask questions. If we hear the same questions, we’ll add them to the FAQ. Welcome to 420payroll.com!
Founded in August 2016.
420payroll.com is a direct result of the feedback we heard from our cannabis clients at Webpayroll Inc. Webpayroll was launched in June of 2012 as a Mobile-first payroll service and quickly gained traction with startups and small businesses nationwide. Our experience working with Cannabis clients gave us insight to the special payroll needs of this nascent industry.
We learned that the IRS used Section 280e of the Internal Revenue Code to deny Cannabis businesses the ability to deduct normal business expenses for tax purposes. Without the ability to deduct items such as rent, utilities and payroll, Cannabis businesses found themselves paying an effective tax rate ranging from 70% to 90%. It’s a testament to the strength of the Cannabis market that these companies were able to turn a profit in spite of their huger tax burden.
Solutions have been created including costly and cumbersome options like operating two legal entities to separate costs, or using new technologies like bitcoin. 420payroll.com was created to provide alternative solutions to the 280E problem. Solutions like timekeeping apps that allow the employee to clock in and out of job functions that are Cannabis related. This allows the employer to recapture tax deductions for labor costs when the employees aren’t handling the product. We also developed a labor distribution report based on the percentage of time spent in each job function.
The other thing we learned about the Cannabis industry is that they prefer to work with other Cannabis brands. As Webpayroll, we may understand the industry but the brand is too generic to represent the image of a Cannabis friendly payroll provider. And so it was that 420payroll.com was born.
Launched in December 2017.
There was much to do to prepare the infrastructure needed to support a cloud-based payroll service provider. Luckily most of the work had already been done in setting up and developing Webpayroll. Products needed to be tweaked and services needed to be modified to accommodate the needs of our Cannabis clients.
Along the way we learned about some of the issues that Cannabis businesses had to deal with. Banking and merchant services were especially a nightmare. Fortunately there are now Cannabis friendly banks, but still no credit card processing services. One of Cannabis clients told us that that their employees were having their bank accounts closed when the bank found out their customer worked for a Cannabis business. Our solution was to provide pay cards that work like ATM debit cards. We load the card with the employee’s net pay and they can take their cash at an ATM or use it like a regular debit card.
Welcome to 420payroll.com the cannabis friendly payroll service! Please give us your feedback and ask us any questions. We’re still working on the FAQ so if your question is pertinenet, we might add it to the list.