Actual cost of employing somebody?
Discussion
Supposing I was able to offer someone a permanent job with a basic gross rate of £10ph, 40 hour week, any thoughts on how much that would actually cost me per hour? I don't mean an actual figure, although that would be nice, I'm more thinkijg of what things I need to take into consideration.
I know I have to allow for 4 weeks holiday, plus the national insurance, plus employer's liability insurance, anything else?
I know I have to allow for 4 weeks holiday, plus the national insurance, plus employer's liability insurance, anything else?
Odie said:
Looking at it from a different direction (that may not be helpful) if they arent going to earn you 3-4times the amount that you pay them then its not worth employing them in the first place.
How do you arrive at that conclusion? And does it apply to any particular business or generally?Odie said:
Looking at it from a different direction (that may not be helpful) if they arent going to earn you 3-4times the amount that you pay them then its not worth employing them in the first place.
LOL, what?? Explain to me how I work out if my admin clerk earns me 3/4 times more than I pay her?
Frimley111R said:
Odie said:
Looking at it from a different direction (that may not be helpful) if they arent going to earn you 3-4times the amount that you pay them then its not worth employing them in the first place.
LOL, what?? Explain to me how I work out if my admin clerk earns me 3/4 times more than I pay her?
my lot don't 
okgo said:
What he has said works for sales staff perhaps, but as said, how do you explain the cleaner makes you 3x what he costs?
Put a value on your own time i.e. if you can earn say £700 in a 7 hour day then you can earn £100 per hour, if you did the cleaning yourself if would cost you £100 per hour in effect, so paying a cleaner £10 an hour gives you a x10 return.Mr Overheads said:
okgo said:
What he has said works for sales staff perhaps, but as said, how do you explain the cleaner makes you 3x what he costs?
Put a value on your own time i.e. if you can earn say £700 in a 7 hour day then you can earn £100 per hour, if you did the cleaning yourself if would cost you £100 per hour in effect, so paying a cleaner £10 an hour gives you a x10 return.Annual cost to you would be £23,426.40.
This assumes that the employee takes 20 days holiday + 8 days bank holiday per year paid and works 40 hours per week.
Essentially 40 hours x £10 per hour x 52 weeks per annum x 12.8% to cover employers NI.
Additional costs will include cost of running their desk - ie phone, stationery etc.
This assumes that the employee takes 20 days holiday + 8 days bank holiday per year paid and works 40 hours per week.
Essentially 40 hours x £10 per hour x 52 weeks per annum x 12.8% to cover employers NI.
Additional costs will include cost of running their desk - ie phone, stationery etc.
donz29 said:
Annual cost to you would be £23,426.40.
This assumes that the employee takes 20 days holiday + 8 days bank holiday per year paid and works 40 hours per week.
Essentially 40 hours x £10 per hour x 52 weeks per annum x 12.8% to cover employers NI.
Additional costs will include cost of running their desk - ie phone, stationery etc.
Well done that man.This assumes that the employee takes 20 days holiday + 8 days bank holiday per year paid and works 40 hours per week.
Essentially 40 hours x £10 per hour x 52 weeks per annum x 12.8% to cover employers NI.
Additional costs will include cost of running their desk - ie phone, stationery etc.
So that puts about 12.5% on top of a £20800 basic salary, plus somewhere to seat them and phone them if required.
donz29 said:
Additional costs will include cost of running their desk - ie phone, stationery etc.
Add to that sick pay if you offer it, and maternity or paternity leave and/or pay.I would say the major 'cost' over their headline rate is not the Employers NI but the costs you don't see.
Fair enough, when there is work to give them they pay their own wages, but you also need to look at the cost where you will be finding them 'something' to do as there is no work to give them. That's a wasted cost.
The other factor is the cost when problems start. Lets say they are off sick for 2,3,4 days or a week. Could you do all of the work yourself, or would you have to turn custom away? Of course, not only are you losing money, you still have to pay sick pay if that is your contract.
Indeed, should they just not turn up to work one day and say they have a job somewhere else (as has happened to me...!), again, could you do all of the work, or would you be losing customers?
The outcome for me was that I learned that unless you can guarantee that they are sound and are going to have enough work full time for the foreseeable future, there is a fine line between that, and not bothering, profit wise.
Oh yes, the last factor - all the bloody forms you have to fill in an an employer...
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