Total cost per year of min wage employee

Mrs_Arcanum

CKhalvashi wrote: »

If we’re talking 38h/week, there is no way they would earn less than £107/wk.

I noticed that this was part of the top spec, however this is a valid point!

No reason to have only one full time employee. It might make more sense to have two part time people. Can be more flexible and cheaper.

glasgowdan

Mrs_Arcanum wrote: »

No reason to have only one full time employee. It might make more sense to have two part time people. Can be more flexible and cheaper.

And you then get into dodgy territory if it looks as though you are trying to evade tax.

heathcote123

glasgowdan wrote: »

And you then get into dodgy territory if it looks as though you are trying to evade tax.

Not at all, it's a perfectly valid thing to do, and no tax is evaded.

There's no rule that says you have to organise your business in order to maximise reveuse to the taxman.

Savvy_Sue

Charityworker wrote: »

If you pay them less than £107 a week you won't be required to pay any tax, NI, sick pay or maternity leave. You won't even have to register as an employer with the HMRC or give out p45's or P60's. All you need to do is pay your employee and give them a payslip which you can type out yourself.

Even if you are registered with HMRC you can type the payslips out yourself. And it would be worth checking the thresholds at which you have to do various things.

However, even if you don't have to register, I'd suggest that it would be a good idea to keep your records as detailed and up to date as they'd need to be if you WERE registered, so that you can easily prove, if required, that you haven't been evading tax etc.

Plus, you'll know if you're getting near to the levels at which you do have to report to HMRC.

glasgowdan wrote: »

And you then get into dodgy territory if it looks as though you are trying to evade tax.

heathcote123 wrote: »

Not at all, it's a perfectly valid thing to do, and no tax is evaded.

There's no rule that says you have to organise your business in order to maximise reveuse to the taxman.

I agree with heathcote, it's a legitimate thing to do, and as Mrs A says, it can be both cheaper and more flexible. But be wary of thinking that you can get Fred to cover Freda's holidays and vice versa by working full-time in those weeks, that can get extremely complicated!

abimonster02

Charityworker wrote: »

If you pay them less than £107 a week you won't be required to pay any tax, NI, sick pay or maternity leave. You won't even have to register as an employer with the HMRC or give out p45's or P60's. All you need to do is pay your employee and give them a payslip which you can type out yourself.

Would they not have to pay NI though? Am new to all of this and am looking into what taking on employees involves.

Thanks

Mistral001

abimonster02 wrote: »

Would they not have to pay NI though? Am new to all of this and am looking into what taking on employees involves.

Thanks

If what you mean by "they" you mean employee, yes they have to pay NI which is deducted from their wage, but the employer has to pay Employer's NI in addition to this Employee NI. This is not deducted from the employee's wage but is added to the employer's costs.

Charityworker

abimonster02 wrote: »

Would they not have to pay NI though? Am new to all of this and am looking into what taking on employees involves.

Thanks

No you wouldn't. If they earn £107 a week or less no tax or NI would have to be paid by anybody. I know this as I work 16 hours a week for £6.08 per hour and neither me or my employer (who I sort the salaries out for) pays any NI or tax.

Savvy_Sue

Charityworker wrote: »

No you wouldn't. If they earn £107 a week or less no tax or NI would have to be paid by anybody. I know this as I work 16 hours a week for £6.08 per hour and neither me or my employer (who I sort the salaries out for) pays any NI or tax.

note that the employER starts to pay NI a little before the employEE has any deducted.

Those with insomnia or planning to take on employees should have a good look at the HMRC pages for new employers. I've said elsewhere that for a small number of employees it's not rocket science, and it's not too onerous, but you do have to be absolutely meticulous and keep on top of your record keeping. For some people it's better to concentrate on core activities and pay someone else to take care of the payroll!