What does minimum wage cost per month?
Discussion
Apologies for the naive question. Looking at the cost of having an employee per month to see if its worth moving the business to the next level (ie. out of the spare room) or not.
Whats the actual cost of having an employee on the minimum wage?
They are on an hourly rate of £5.93/hour, say 6 days per week with one day off, there's the UK working time directive, employers NI etc.
This will be "employee number 1" - well, apart from me, in my limited company, just trying to cost out over a year what it actually means in terms of raw numbers to have one (other) person on the payroll to work out if it is cost effective to take on more work or not.
Any advice from existing employers gratefully received. Apparently I need to talk to BusinessLink too ?
Whats the actual cost of having an employee on the minimum wage?
They are on an hourly rate of £5.93/hour, say 6 days per week with one day off, there's the UK working time directive, employers NI etc.
This will be "employee number 1" - well, apart from me, in my limited company, just trying to cost out over a year what it actually means in terms of raw numbers to have one (other) person on the payroll to work out if it is cost effective to take on more work or not.
Any advice from existing employers gratefully received. Apparently I need to talk to BusinessLink too ?
Well, assuming a 37 hour week you're looking at a base salary of £11,409.32
Employers NI Contributions would be £728.38 per annum.
Edit: There is also the things to consider that you may otherwise not.
Effect on cashflow? If it's just you, you could pay yourself less (or nothing) one month if cashflow is dry and make it up the following month. With an employee, you cannot do this. You have responsibilities as an employer which you would need to consider.
Would it not be more sensible to employ someone on a part time basis?
Lastly, the minimum wage is low. What do you want this person to do? We pay our cleaners substantially more than the minimum wage. Even part time studenty jobs often pay considerably more than the £5.93/hour.
Employers NI Contributions would be £728.38 per annum.
Edit: There is also the things to consider that you may otherwise not.
Effect on cashflow? If it's just you, you could pay yourself less (or nothing) one month if cashflow is dry and make it up the following month. With an employee, you cannot do this. You have responsibilities as an employer which you would need to consider.
Would it not be more sensible to employ someone on a part time basis?
Lastly, the minimum wage is low. What do you want this person to do? We pay our cleaners substantially more than the minimum wage. Even part time studenty jobs often pay considerably more than the £5.93/hour.
Edited by Merlot on Saturday 2nd October 15:10
mattdaniels said:
Thanks for the info. Presumably the salary figure is before HMRC have taken their slice?
Yes, that is before they have taken their slice but it is what you would pay (along with the Employers NI). The employee would receive ~£816 after tax assuming no other deductions.Edited by mattdaniels on Sunday 3rd October 08:12
mattdaniels said:
Boing.
Anyone?
If you employ someone on minimum wage you are unlikely to get someone of a decent calibre. Being an employer I've interviewed a lot at the lowish end and the large majority are wasters. Out of the last 'round' of getting new employees, this is the 'best' out of about 100 applicants and 30 interviews, I had to sack one after 6 weeks and the other upped and left to work in a bar in Magaluf after ten.Anyone?
My advice:
Go halfway. Not sure if you need someone full time? Then you probably don't. Get someone, maybe a mum or someone with kids at school and offer them part time hours at more than minimum wage. They will do more than a waster will in a full day.
You'll find that a lot easier.
Also, if you keep their wages/hours below a certain level, they won't have to pay tax or NI, and you won't have to pay employers NI either.
Then, if you need to expand? Get another one.
Merlot said:
Lastly, the minimum wage is low. What do you want this person to do? We pay our cleaners substantially more than the minimum wage. Even part time studenty jobs often pay considerably more than the £5.93/hour.
Wish I'd seen these jobs when I was a student - they almost all paid less than that because min wage for 21 and under is £4.77 Edited by Merlot on Saturday 2nd October 15:10
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