How Employers Can Recover $600 Per Employee in Payroll Taxes (Legally)

Michael Clark (00:00)

all W employers who have W2 employees are overpaying their matching

FICA tax by $600 per employee per year. Has nothing to do with seniority. Has nothing to do with level of income. A person could be a $25,000 employee, or $100,000 employee, or you know a $200,000 employee. It’s always going to be $600 per employee per year. So the math is very simple.

Micah Johnson (00:32)

Interesting.

Michael Clark (00:34)

Just take your employee count, multiply it times 600. That’s the amount of payroll tax that you are overpaying now.

Micah Johnson (02:13)

Hey everyone, welcome to the Real Estate Pros podcast. I’m your host, Michael Johnson. And today I’m joined by Michael Clark, who’s been making serious moves in the payroll tax strategy space. Michael, welcome in, man. Glad to have you.

Michael Clark (02:26)

Thank you for having me.

Micah Johnson (02:27)

Absolutely. I think our listeners, especially those who have established real estate businesses with 10 employees or more, really going to take a lot away from what we have to talk about today, which is literally how to get more money back for yourself and pay your employees more without actually ever spending any more money. This is pretty interesting. So let’s dig in on it. So for people who may not know you yet, what’s your main focus right now and what

Michael Clark (02:38)

Yeah.

That’s right. That’s exactly right.

Micah Johnson (02:55)

Well, it’s not really markets that you’re operating in. I guess this is nationwide. So what’s that main focus right now?

Michael Clark (03:00)

Yeah, it’s nationwide because I work with a lot of national companies and consumer products for people like Lowe’s, Home Depot, Kroger, Hy-Vee, Ralph’s out in the West Coast, Ace Hardware, Orgel Brothers, if you’ve ever heard of them. And you know in some cases, we do get every once in a while some Walmart business and things of that nature. So But from that,

Even the big boys, you know, are looking for cash. They’re looking for as much cash as possible. And it just so happens we have a program that helps them with that. And it’s called PCMP, Preventative Care Management Plan. ⁓ And one of the things I think I failed to mention earlier was I’ve actually written the only comprehensive book on PCMP. The title of the book is called PCMP, The Hidden Financial Engine.

Micah Johnson (03:39)

Okay.

Michael Clark (03:54)

And it’s at the editor for its final review right now. But so there’s a lot of articles on it, but no one’s ever came out with a comprehensive book on it. But I’m not here to promote the book. I’m here to tell people about what PCMP actually does for you, the employer. So in a nutshell, ⁓

Micah Johnson (03:57)

Okay.

Nice, congrats.

Excellent.

Michael Clark (04:15)

all W employers who have W2 employees are overpaying their matching

FICA tax by $600 per employee per year. Has nothing to do with seniority. Has nothing to do with level of income. A person could be a $25,000 employee, $25,000 employee, or $100,000 employee, or you know a $200,000 employee. It’s always going to be $600 per employee per year. So the math is very simple.

Micah Johnson (04:50)

Interesting.

Michael Clark (05:39)

Just take your employee count, multiply it times 600. That’s the amount of payroll tax that you are overpaying now.

That’s number one.

Micah Johnson (05:48)

Okay. Now this is something I haven’t heard of before. So tell me, you got a pretty interesting story about how you heard about it and even realized that it existed. So take us through what led you to even writing that book. that experience there and then dig in on more, what it helps people with today.

Michael Clark (05:56)

Yeah.

Well, number one, the reason

for the book is because I’m dealing with human human you know resource people in some cases, CFOs in some cases, small, medium sized business people. And everybody only is getting a snippet of the program. They’re not getting, they’re reading maybe a you know one column article on it.

Micah Johnson (06:17)

No, ⁓

Gotcha.

Michael Clark (06:27)

Or the CFO has more of an interest in EBITTA. Or another person has another interest in improving net operating income. So from that point, it produced. I sat back. I’m like, man, these are a lot of different types of chapters. And so I basically put it together. And I did the research on it. And there is no other complete book on it. I even have it to the point.

Micah Johnson (06:37)

Mm.

Michael Clark (06:55)

which is stepping a little bit outside of the realm here. But I actually have a chapter where PCMP can be used for NIL.

Micah Johnson (07:03)

Wow.

Michael Clark (07:04)

and, you know,

or charitable organizations, you know, things of that nature. So that’s even has its own chapter. But anyway, getting back on track PCMP, like I said, you’re overpaying as an employer, you’re matching FICA tax by $600 per employee per year, we recover that money for you. Long story short. Okay.

Micah Johnson (07:08)

Interesting.

Okay.

And how do do that?

Michael Clark (07:29)

Well, we utilize the cafeteria plan, the 125 plus the 213D Compliant Benefit Program. And that allows us to capture that money. Where this started, for some of the people who are mature enough for it, this started during, I was a valet for Congressman Albert Lee Smith in Alabama. And I had the opportunity of meeting President Reagan, but it had nothing to do with this. But

He actually started, President Reagan actually, during his reelection years, started the formation of the PCMP program. This program does not have, it has nothing to do with COVID programs or anything like this. This was started in the, what, 1984, basically, the foundation of this. But now after COVID, some of these programs that came out from COVID have all expired. And so people are looking for the next source, if you will, of, you know,

dollars. This has been around since basically, for the past 1520 years. Okay? No. ⁓ And it doesn’t Yeah, that’s the other thing. It doesn’t have an expiration date. It doesn’t have an expiration date. Yeah. So the biggest thing is, like I said, for the employer $600 per employee per year. So just take your employee account times 600. Boom. That’s how much in payroll tax you will not have to pay from this point forward.

Micah Johnson (08:34)

So let’s not go anywhere.

Yeah, that’s big.

Michael Clark (09:00)

your employees benefit in three major ways. Because we utilize the 125 plan, they actually receive lower taxable income, number one. Okay, that’s good. Number two is the 213. What that actually is, it has certain benefits in it. It has a telehealth program. It has a individual and couples counseling program in it. It has addictive services.

Micah Johnson (09:05)

Okay.

Michael Clark (09:29)

counseling in it. It has the 12 week dietary program from Mayo Clinic in it. It also has an app, which is kind of cool. I used it one time. It takes a picture of your face for about 15 to 30 seconds. And it tells you your body mass, your blood pressure and a couple other things. So now when you’re talking to your telehealth doctor, the telehealth doctor would probably like to say, gee whiz, I wish I knew your blood pressure. Well, now you do. And it’s actually pretty darn accurate. It’s amazing.

Micah Johnson (09:54)

Wow.

Michael Clark (09:57)

It’s really just fascinating. And our telehealth doctors have the ability to prescribe and order labs. Well, that sounds like health insurance, but it’s not. We’re not a health insurance company. We are not a payroll company. If you have any of these benefits in place right now, we don’t want you to remove any of it, not unless you want to. But I’m just saying, ours is just a simple add on. We need those benefits in order to recover that $600.

Micah Johnson (10:19)

Yeah.

Michael Clark (11:00)

for the employer. The other thing is, the last thing is, on the 213, is it doesn’t require a participation rate. For some of you who have either been employed by people who’ve had major medical, you’ll hear that sometimes that you have to use 10 % of the benefits that are offered, or 5%, or 15%, whatever the number is. Ours, we don’t care. I shouldn’t say we don’t care. We’re a little bit coy.

Micah Johnson (11:26)

Mm.

Michael Clark (11:29)

You know, we have to offer those benefits because it recovers the $600. OK? So it’s just there. The beautiful thing about it is there’s no premium for those services, no deductible for those services, and once again, zero participation. There is absolutely no net cost to the employer or to the employee for this entire program.

Micah Johnson (11:36)

Gotcha. So.

Michael Clark (11:58)

all of it. The last third big benefit is all your employees that are W-2 employees receive a bump in pay on a conservative basis of about $85 to $185 based on a monthly basis. We actually pay, huh?

Micah Johnson (12:16)

And how’d you get that?

and how does that happen? Dive into that.

Michael Clark (12:22)

It’s just part

of the program. It’s just the way that the government set up ⁓ the program for the bump in pay. way that because of what happens is when you take the money out for pre-tax dollars, it lowers your taxable income. So what the IRS did in their infinite wisdom is they allowed us to take what was taken out at the top of the check and in the same check, okay simultaneously,

reimburse it at the bottom. And by reimbursing at the bottom, it creates a difference, a positive difference, not a negative difference. So it creates a bump. The reason why I give a range, I have some companies that I’ve given the reports to that have their employees are getting about 225 on a monthly basis. But we quoted out, you know we use the number on 85 to $185 because it’s on a conservative basis. But the good part about that is,

Micah Johnson (12:55)

Mmm.

Michael Clark (13:21)

⁓ that does another thing for the employer. It keeps it creates retention. Because now you have an employee that’s working for you that’s having lower taxable income, extra benefits that they’re not having to pay for, nor is the employer having to pay for no no money out of his pocket. No net income out of his pocket. And a bump in pay. I’m a happy employee, at least for now.

Micah Johnson (13:43)

Right? Right. has a like, that’s the retention. That’s one of harder things to do. So any, anything to help with that. So let’s say this, a business owner calls you and says, all right, I want to do this. What’s that? What does it look like? What do they need to be prepared for? What are those next steps?

Michael Clark (13:44)

Yeah.

Yeah, good question. ⁓

One of the things that we need is a payroll census. That is the key. That’s the key piece of information we need. The reason for that is it verifies, number one, how many employees that you have that qualify under the plan. Number two, it tells us by employee, you know, the reason why we give a range is because we don’t know if an employee is married or single, if they’re claiming one, two, three dependents. We don’t know what that is.

When we get the payroll census, now we know. So when they get the report back, not only are they going to see the $600 times the number of employees that qualify and ⁓ that’s the big number for them, now we can actually show them an itemized report by employee of how much of a bump in pay they will be receiving. So we’ll have maybe one employee that will receive a bump in pay of, say, $93.15. Another employee on the report could have a bump in pay of a $115.72

Micah Johnson (15:42)

And that’s per month.

Michael Clark (15:43)

$115.72, based on a monthly basis. And we actually pay this out. You recover your funds in real time. So you take the $600. We know what that number is. And if you pay, we’ll just say just for conversation, monthly. You take $600 divided by 12. Every single month, you’re getting $50 for every employee that you have. And you’re able to keep that.

Micah Johnson (16:07)

Okay.

Michael Clark (16:09)

If you didn’t do, if you weren’t on the PCMP plan, you would continue business as usual. And what that is is you are already sending in matching FICA tax. You’re required by law to send in matching FICA tax. We’re just giving you the opportunity to send in less than you owe. It’s not 100 % of it. It’s only $600 per employee. That’s reason why it doesn’t discriminate.

Micah Johnson (16:31)

Yeah.

Michael Clark (16:35)

We’ve been working with one of the other customers that I didn’t mention to you earlier was Tractor Supply, just to give you an idea. They have 50,000 employees. Well, times 600 is $30 million in payroll tax that they won’t have to pay. Arizona State University has 14,500 employees that are on the program. That’s $8.7 million.

Micah Johnson (16:43)

Okay.

Right.

Michael Clark (16:59)

the university won’t have to pay. So this applies to any employer with W-2 employees. It just so happens in your market, excuse me.

Micah Johnson (17:02)

Yeah.

As long as you have 10, right?

Keys just being 10 employees. that the only? Gotta have info.

Michael Clark (17:15)

Yep. 10 employees

allows us to participate. 1099 employees don’t qualify, unfortunately, which I know for some people in your business that, you know, that could happen, you know, just the way it’s set out. if, yeah, if you have like management companies of HOAs and you have management companies of commercial buildings and things of this nature, all those workers, secretarial,

Micah Johnson (17:29)

Yeah, yeah, it does. There’s some that grow outside to that point though.

Michael Clark (17:44)

architectural maintenance, you know, like just regular janitorial services and think, you all those people who are incorporated into that part of the the the business of the real estate side. If they’re W two employees, they qualify.

Micah Johnson (17:49)

Mm-hmm.

That’s powerful. Okay.

Michael Clark (18:00)

OK. Yeah. So this is, like I said,

this is something that was started in the, like around 1984, the beginning of the concept. The rhetorical way of saying what they thought was, If the concept was, if we could generate more money back to the employer and to the employee, and they could contribute some of that to wellness, that’s where this kind of got started. If they could do that with wellness, then

Micah Johnson (18:25)

Hmm.

Michael Clark (18:27)

later on in the years, if an employer needed help with wellness or an employee needed help with wellness, they wouldn’t be as dependent upon the federal government itself. That was the concept. It just so happens it’s metamorphized to what we’re talking about today.

Micah Johnson (18:39)

Okay. Interesting.

but still maintains that medical piece to it. So that makes sense. If there was connected there, it’s the parts that you said not participate, but the parts that participate in the program. It’s interesting. That’s how they would have designed it. That’s fascinating.

Michael Clark (18:56)

Yes.

Yes, that’s the overall concept of how that works. But like I said, the key ingredient is receiving a payroll. We have the form, document, like ⁓ a template that you can follow. And then you just send in, you know uh or we actually have, for some people who don’t want to get involved in payroll reports, just order more of a entrepreneurial, or maybe they have the 10 employees, but that’s just something they don’t do. They can make.

a phone call to their payroll company like ADP or paychecks or what they can generate this report within 15 to 20 minutes because they’re they’re accustomed to doing this. That’s you know, they have no problem in doing it. And we get that information. We produce that report that shows you basically the total savings to your company, you know, for not only you, you yourself as the employer, but also the bump and pay for the employees.

Micah Johnson (19:36)

Okay.

Michael Clark (19:55)

And then you make your, and then after that, you make your decision. You know, do you want to, do you want to participate in the program or do you want to keep on sending in the matching FICA tax with no, with absolutely no ROI.

Micah Johnson (19:56)

That’s all.

Yeah.

I, which one? You gotta answer that one honestly, because if it’s that simple, why not take advantage of a program that exists if that’s what it’s for?

Michael Clark (20:16)

Yeah.

And some people will say, you know, I got to send this into my CPA and get advice or my legal counsel. Fine. We are by the way, our company is ranked in the top 5000 of Inc Magazine. We’re ranked I think 3,201. I’m sorry, the reversal 2,301. We’re ranked 2,301 out of the 5000. So in order to be ranked in

Micah Johnson (20:36)

Nice, congrats.

Nice.

Michael Clark (20:45)

in Ink Magazine, you have a lot of qualifications. You just can’t pop in. So we’ve been vetted by them. We’ve been vetted by the CPA journal. We’ve been vetted. So when somebody says, go to my accountant, or I’m going to call my accountant, see what he thinks, I’m going to say, go ahead, because I already know what the answer is.

Micah Johnson (20:56)

no you can’t.

Michael Clark (21:14)

He says, yeah, it’s a thing. Their job as a CPA is not to recommend. I always say sometimes, you know I wish CPAs would recommend this, but that’s not their primary function. Their function is more of a recording and reporting. They’re not necessarily advisory, per se.

Micah Johnson (21:14)

Right. Yeah.

Yeah.

Well, like I said, it’s kind of an obscure

program. Like if you didn’t know about it, you kind of didn’t know about it. So I appreciate your time today. For those that are listening that would like to touch base with you and learn more see if they may be a good fit for this. How, what’s the best way for them to find you?

Michael Clark (21:43)

Yeah.

Well, you can do one of two things. Just give me a call and I’ll repeat the number twice. It’s 602-510-6562. And once again, that’s 602-510-6562 and or by email. Email is pretty simple. It’s michael, M-I-C-H-A-E-L, at a…

W sales, S-A-L-E-S, dot C-O, not dot com, just dot C-O. And either one of those ways, and then we’ll take care of you. we have plenty of it. Everybody’s going to want information. We have all that documentation for review, not a problem.

Micah Johnson (22:29)

Gotcha. Excellent. we’ll make sure that.

Excellent, excellent. Well, Michael, I appreciate your time today. Thanks for being with me and sharing this information. For those of you out there that found… Absolutely. For those of you out there that found value in it, please like this episode, share it, let your friends know. You can save $600 per employee and pay your employees even higher. So thanks for joining us today. We’ll see you in the next episode.

Michael Clark (22:47)

Yeah, thanks for the invite.

Good.