updated (2020) costs of taking on a first employee

[deezyboy]

Morning all,

Currently in a situation where my full time, self employed (yes i know that shouldn't have been done) guy is leaving next week and I need to find a full time guy to cover and replace him.  Ideally I would carry on down the self employed route but nobody wants this for less then £160 a day which is do-able for nice tree days, but we also do a bit of odds and sods and log splitting etc where it isn't quite as doable, so I am now having to look down the line of a PAYE roll to cover all bases and have a guy in every day (1 less thing for me to worry about)

This is quite a big jump for my little business so just looking for advice, realistic fee's and costs so that i can gauge how sustainable it would be. I've read elsewhere on this forum that i need to budget 4X their annual pay cheque in terms of training, PPE, Holiday pay, sick pay etc.... all of which I receive none ? 
As cheesey as it sounds but my mum is a qualified accountant so she can help me/volunteer to do admin and paperwork to an extent, but just looking for recent and updated charges and costs to help my decision.

Thanks, Ben 

[doobin]

4x sounds excessive. My guy doesn't cost me anything like that and I look after him well. At a guess I'd say 1.5 to 2x their wage.

 

Employers liability is a legal requirement, so don't forget that. PPE is a one off cost if you don't have stuff already in their size. If you can find a good guy who actually wants a steady job, it's a weight off your mind and you'll wonder why you bothered with entitled prima donna subbies for so long.

 

 

Edited August 9, 2020 by doobin

[eggsarascal]

At twice their wage you might as well get a prima Donna subby in, let's suggest you pay someone on the books £15/hour, he's costing you £30/hour, 8 hours at £30=£240/day. From what I've read here Most subbies are cheaper than that.

[donnk]

subby all day long. way cheaper. no hol pay, sick pay, grief.

[Bunzena]

It's a shame that the cost of a full time employee is so much.  

 

I can see both sides of the argument.  The need to pay a decent minimum wage, a pension contribution, NI, statutory maternity/paternity, etc. - is a good thing for the employee.

 

But the financial commitment for a small [any?] business is significant - and likely to increase.

 

Hence the growth on zero-hours contracts and 'freelancing' across the economy as a whole.  Government employment legislation makes the whole thing pretty finely balanced.

 

Our approach has been the freelance route.  It does have it's issues - but it does give us the flexibility we need.  And that, in the end, swayed things for us.

 

Every situation is different - but it's a really tough call. 

 

I think if you can find someone who is honest, motivated, sees the world of work the way you do - then full time employment - and all the investment you will have to make - works.

 

But - in our experience - people like this aren't ten a penny.

[eggsarascal]

39 minutes ago, Bunzena said:

It's a shame that the cost of a full time employee is so much.  

 

I can see both sides of the argument.  The need to pay a decent minimum wage, a pension contribution, NI, statutory maternity/paternity, etc. - is a good thing for the employee.

 

But the financial commitment for a small [any?] business is significant - and likely to increase.

 

Hence the growth on zero-hours contracts and 'freelancing' across the economy as a whole.  Government employment legislation makes the whole thing pretty finely balanced.

 

Our approach has been the freelance route.  It does have it's issues - but it does give us the flexibility we need.  And that, in the end, swayed things for us.

 

Every situation is different - but it's a really tough call. 

 

I think if you can find someone who is honest, motivated, sees the world of work the way you do - then full time employment - and all the investment you will have to make - works.

 

But - in our experience - people like this aren't ten a penny.

There are millions of people like 'that', they turn out for an employer day in day out. People rarely change jobs if the wages and conditions are ok.

It took me until my 30's to realise how much money other people were earning from my labour. Anyone who's got the ambition, and motivation as the boss will be the boss.

[deezyboy]

Ok thanks. So unfortunately it looks like employing is a last resort effectively for a small business, due to the costs etc? As annoying and problematic as it is, a one off cost to pay a subbies invoice as required far outweighs the total bills involved with employing 

[dumper]

My lads are employed I work on 2x pay to cover costs, which is more expensive than a free lancer but I have work to cover them and like that I don’t worry if they will be available to work or don’t want to go to certain jobs

You will have to pay certain costs anyway insurance is cheaper if they are employed, and vehicles are expensive to insure if your labour is not direct 

 

[topchippyles]

No one mention redundancy if things go quiet or a change in circumstances ?

[eggsarascal]

3 minutes ago, topchippyles said:

No one mention redundancy if things go quiet or a change in circumstances ?

Company goes bump, no redundancy.