Healthy margins and cutting costs are a big priority for small-business owners. Be on the lookout for hidden costs that can damage your bottom line. This list uncovers five budget busters and alternative options to save cash.

On-the-job liability — Small businesses pay out $35.6 billion every year for lawsuits, and contractors are a legal lightning rod. Make sure to have the right liability insurance protection in place.

Payroll taxes and benefits — An employee costs more than 1.3 times their actual salary when you add in benefits and payroll taxes. An employee earning $45,000 a year costs you closer to $60,000 with these hidden costs. Consider contract employees for jobs like IT, finance and administration.

Equipment depreciation —Heavy equipment loses up to 40% of its value in the first year alone, even if it still works properly. You could buy two or more used pieces for the price of a single new one.

Personal use of company vehicles — Most serious car accidents happen during evening rush hour or at night. Allowing your employees to personally use company vehicles not only increases wear and tear but also your liability. Both are unnecessary hidden costs.

Lost time — What's the value of your actual contractor work? $100 an hour? More? Don't waste their time on non-specialized tasks such as answering the phone or creating invoices.