I've been looking into it, and MOST, not all, reps are considered independent contractors, which means that they are responsible for paying their own taxes. They are not considered to be your employee legally. So make sure they know this from the onset, and if they'd prefer to be considered an employee, make sure you get yourself a good lawyer who can write up legal documents for the rep to sign, and then YOU'RE responsible for taking taxes out of their paycheck. I personally am looking into having an independent rep who I pay a set commission to. I was thinking about 15% and DEFINITELY factor that into your wholesale cost, as already stated. I actually hired a friend of my cousin's who lives across the state recently to do home parties for me. We came to the agreement that she'll keep 15% of whatever she sells and she's responsible for the taxes on her earnings. But she will not be starting this until I get the proper legal paperwork together. You never know, even with family and friends, what may happen in the future...so make sure you have some good professionals to back you up!!! Good luck and congrats on being successful enough to need a rep!!!