How Much does it cost to employ someone?
Discussion
Hi,
Just a Quick Question,
What would it cost me as a business to employ someone at minimum wage for a 40hr week ( hidden costs that im probably un-aware of )
(£5.73p/hr £229.20p/wk £916.8p/mth)*
so far, everyone i have used has been a subbie, so they invoice me, and i pay, they all deal with their own tax. this suits me as i'd rather no get entangled in the minefield that is employment law!
Just a Quick Question,
What would it cost me as a business to employ someone at minimum wage for a 40hr week ( hidden costs that im probably un-aware of )
(£5.73p/hr £229.20p/wk £916.8p/mth)*
so far, everyone i have used has been a subbie, so they invoice me, and i pay, they all deal with their own tax. this suits me as i'd rather no get entangled in the minefield that is employment law!
- as of oct 1st 2008
The salary you quote comes to £11,918 per year Gross.
As an employer, you will also need to pay Employer's NI contributions on top of the £11,918.
This would come to an additional £825 per year.
Of course, the employee will not receive £11,918 as PAYE and Employee's Ni will also need to be deducted from the salary and paid overt to the Revenue by you as the employer.
As an employer, you will also need to pay Employer's NI contributions on top of the £11,918.
This would come to an additional £825 per year.
Of course, the employee will not receive £11,918 as PAYE and Employee's Ni will also need to be deducted from the salary and paid overt to the Revenue by you as the employer.
As EricMc mentions, you need to add in your part of the NI too. We generally allow 10% as a rule of thumb for this, but exact figures depend on their salary.
You *must* have Employer's Liability Insurance. Provided your company doesn't do anything high risk it would be < £200/year.
Most small companies outsource their payroll too, it can be a real PITA to handle it when you take into account student loan repayments, NI, employer's NI, previous tax codes etc. Budget £25/month for this - although you can get it cheaper.
That's about it. I assume you've taken into account the cost of tools/desk for them to sit etc, and aren't worried about extra power for the kettle to make more tea.
You *must* have Employer's Liability Insurance. Provided your company doesn't do anything high risk it would be < £200/year.
Most small companies outsource their payroll too, it can be a real PITA to handle it when you take into account student loan repayments, NI, employer's NI, previous tax codes etc. Budget £25/month for this - although you can get it cheaper.
That's about it. I assume you've taken into account the cost of tools/desk for them to sit etc, and aren't worried about extra power for the kettle to make more tea.
As has been pointed out, there are lots of hiddeen costs beyond the tax and NI implications.
Employer's liability insurance
Health and Safety implementations
Drafting employment contracts
Administering non PAYE/NI factors relating to the employee - such as student loans etc
Is your business already registered for PAYE? If so, adding an additional bod onto the payroll is not a massive change.
If you are not yet registered for PAYE, you will find it all a bit overwhelming, unless you pass the work on to your accountant or some other outside agent.
Employer's liability insurance
Health and Safety implementations
Drafting employment contracts
Administering non PAYE/NI factors relating to the employee - such as student loans etc
Is your business already registered for PAYE? If so, adding an additional bod onto the payroll is not a massive change.
If you are not yet registered for PAYE, you will find it all a bit overwhelming, unless you pass the work on to your accountant or some other outside agent.
no not registered for PAYE at all.
i dont plan on employing anyone until 1st Nov, but just arming my self with the important details.
also, is every single penny that i spend employing someone tax deductible?
Job positions will simply be minimum wage @ 40hrs
unfortunately the profession my seem high risk to the insurers, its leaflet distribution, so risk of falling injury and dog bites ( lol ) is higher than for your average office worker.
as it stands i plan to have x2 full time members of staff brought in over the course of the next 12mths once i get there, ill probbably do my own payroll to save a few bob, but until then ill go with the outsource option. i barely have enuff time to run the business as it is lol.
i dont plan on employing anyone until 1st Nov, but just arming my self with the important details.
also, is every single penny that i spend employing someone tax deductible?
Job positions will simply be minimum wage @ 40hrs
unfortunately the profession my seem high risk to the insurers, its leaflet distribution, so risk of falling injury and dog bites ( lol ) is higher than for your average office worker.
as it stands i plan to have x2 full time members of staff brought in over the course of the next 12mths once i get there, ill probbably do my own payroll to save a few bob, but until then ill go with the outsource option. i barely have enuff time to run the business as it is lol.
Edited by SystemParanoia on Wednesday 17th September 08:48
* Begins attacking google for more information *
Thing is, i was talking to someone i know that runs a security firm ( we have the same resource... people ) and he tells me that doing that will only work for 3mths, if after that time, im the only business paying them any money, then they are classed as an employee ?
is that correct?
Thing is, i was talking to someone i know that runs a security firm ( we have the same resource... people ) and he tells me that doing that will only work for 3mths, if after that time, im the only business paying them any money, then they are classed as an employee ?
is that correct?
I Currently Trade from home, and i do have additional desk space and computer terminal.
But they will be spending 99% of their time out distributing, if not with me then on their own.
when not distributing, i will have at least 3hrs worth of admin work that i could off load onto them everyday, so they will never be idol.
i will be getting a unit in the very near future, but my primary objective at the moment is to get a crew van for my new member of staff to hoon about in.
everything is made so much harder by the fact i can only act with money i have. borrowing is not an option availible to me at any point in the near future that i can see.
But they will be spending 99% of their time out distributing, if not with me then on their own.
when not distributing, i will have at least 3hrs worth of admin work that i could off load onto them everyday, so they will never be idol.
i will be getting a unit in the very near future, but my primary objective at the moment is to get a crew van for my new member of staff to hoon about in.
everything is made so much harder by the fact i can only act with money i have. borrowing is not an option availible to me at any point in the near future that i can see.
SystemParanoia said:
* Begins attacking google for more information *
Thing is, i was talking to someone i know that runs a security firm ( we have the same resource... people ) and he tells me that doing that will only work for 3mths, if after that time, im the only business paying them any money, then they are classed as an employee ?
is that correct?
If an individual works for you in the manner of an employee (you supply the van and the fuel, you give him his instructions for the day, you have the power to hire and fire etc etc etc), then the Revenue will view that individual as an employee rather than a self-employed individual. The length of time the indiviual works for you is not a main factor, it's the WAY he works for you and the way you "control" his work that determines his status.Thing is, i was talking to someone i know that runs a security firm ( we have the same resource... people ) and he tells me that doing that will only work for 3mths, if after that time, im the only business paying them any money, then they are classed as an employee ?
is that correct?
Don't forget, there are many "part time" employees out there.
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