As part of growing your business you may be considering employing your first member of staff – It’s not as simple as just working out the salary you’ll pay and taking that as your costs, there’s a lot to consider and that’s what we’re aiming to help you with in this blog.
First off, you’ve got to find that ideal person. You could use a recruitment agency and have their fees to pay or you could advertise it, again having fees to pay for advertising.
You’ll need an idea of what to pay this person before you advertise or talk to a recruitment agency, you’ll need to make sure this is at least the national minimum wage.
You’ve got to consider the National Insurance you will need to pay (check here) and how much you’ll need to pay towards their pension if their eligible for an auto-enrolment pension. There are possible additional costs to consider such as sick pay which you pay and can’t reclaim, Maternity Leave and Paternity Leave, both of which can be reclaimed.
You can also get help with your Employers National Insurance contributions with the Employment allowance. As of 2022/2023 qualifying employers can claim back up to £5,000 against their Class 1 National Insurance liability each tax year. There’s rules to who gets it, the main two being that your Class 1 National Insurance contributions need to be less than £100,000 in the previous tax year and you’ve got at least one employee who paid over the Class 1 National Insurance secondary threshold (£758 per month) and that employee is not a director of the company.
You’ll also have to ensure you’ve got employers liability insurance, training costs and additional health and safety obligations, not impossible at all but all things to consider!
So if you’ve got that far and you are happy becoming an employer is the right way forward, you’ll need to decide how you want to run your payroll. Some people will do this themselves (have a look at our blog Why I shouldn’t run my own payroll? which will help you make that decision!). Running it yourself will mean you’ve got some software costs, outsourcing to someone like ourselves mean you’ve got a fixed cost for running it each month and takes that additional work away from you. We can also take care of your pension requirements too, taking all that stress away.
Want some help working it all out? Get in touch!