Banking charges for wage payments.

[Deptford Draylons]

Out of interest , would anyone have a rough idea of what it would cost a business with around 200 employees to revert from monthly wage payments, to a weekly ?
Thanks

[trickywoo]

Depends on the bank but electronic payments shouldn't incur a charge so nothing from that point of view.

Payroll slips will obviously involve more work and if its managed by a third party will cost more but payroll is pretty cheap.

In the scheme of things as long as the cashflow can cope it shouldn't cost much more.

[2 sMoKiN bArReLs]

Every leap year the extra wages will cost you more than the bank charges

[2 sMoKiN bArReLs]

I've never heard of anybody wanting to do this? It's a real pain with all the extra processing, potential week 53, paying the extra day (usually) in a leap year, usually poorer cash flow.

[2 sMoKiN bArReLs]

Bank charges between £0-360 per annum depending on tariff
If you are in overdraft & you currently pay last day of month maybe £1,500 in interest
If it costs £5 per employee to process per payroll £3,000 per annum
Extra wage (potentially) in a leap year £15,000

Maybe

[Ean218]

2 sMoKiN bArReLs said:

Bank charges between £0-360 per annum depending on tariff
If you are in overdraft & you currently pay last day of month maybe £1,500 in interest
If it costs £5 per employee to process per payroll £3,000 per annum
Extra wage (potentially) in a leap year £15,000

Maybe

A 200 employee business is not going to get cheap business banking. At say 25p per debit they are looking at a minimum 3 weeks x 200 debits x 25p extra per month, ie £150 per month, so £1800 per annum.

As stated the other costs will soon mount up, it would be madness.

[Jockman]

2 sMoKiN bArReLs said:

I've never heard of anybody wanting to do this?

Indeed.

Pourquoi??

[dartissimus]

The supermarket cash back principle ?

It would be much easier to open a new bank account and get free banking for 12 months including paying cash in.

[2 sMoKiN bArReLs]

dartissimus said:

The supermarket cash back principle ?

It would be much easier to open a new bank account and get free banking for 12 months including paying cash in.

I doubt it would save the £15k extra wages, extra process cost or potential overdraft interest though (the bank charges are likely to be the smallest element of cost, if at all)

[red_slr]

You have lost me on the £15k extra wages?

[2 sMoKiN bArReLs]

red_slr said:

You have lost me on the £15k extra wages?

Not forced to be so, but can easily be (we don't know enough about OP's firm to say)

A simple example (ignore overtime etc)

Company A pays 200 people £20k per annum by monthly salary. This is paid monthly last day of the month in equal 1/12. In 2015 it paid £4,000,000 in wages

In 2016 it paid £4,000,000 in wages

Company B pays 200 people at the rate of £20,000 per annum. It pays weekly with reference to weekly pay dates.

In 2015 it paid £4m in wages

In 2016 it paid £4,015,355 because of the leap day falling on a working day.

Edited by 2 sMoKiN bArReLs on Tuesday 3rd January 16:59

[2 sMoKiN bArReLs]

I always thank the staff at work for them working for free on 29th February. (It always goes down well )

[red_slr]

OK you assume salary, IME of business that pays weekly they are almost always paid by the hour. Clock in, clock out.

OP would need to clarify though..

[2 sMoKiN bArReLs]

red_slr said:

OK you assume salary, IME of business that pays weekly they are almost always paid by the hour. Clock in, clock out.

OP would need to clarify though..

That's the point, exactly