Employing staff

MummyMummy_2

Hello, before i start i just want to point out i have read 12 pages of a search on here, business link and the hmrc site and i still dont have an answer? Im obviously being stupid and have missed what i am looking for (as i highly doubt im the first to ask about employing staff!) so if somebody has an answer/can point me in the right direction it would be very much appreciated. Thank you!

I am considering taking on an employee (paying just over minimum wage... Well just over the october 2012 min wage that i seen on the direct gov website earlier and then commision on top) and from what i have read I need to pay the employees tax requirements... How much more do i need to pay out on top of the wages or is the tax requirements deducted from the employees wages after i pay the wages? Hopefully that makes sense to somebody somewhere?

Also, is it really just as straight forward as getting employers insurance, interviewing and choosing who i want to work for me, registering as an employer and then getting an accountant to sort the rest for me?

I understand i need to draw up a contract (with a solicitor would be ideal) and a staff handbook and that i need to allow a certain amount of paid holidays (but i can decide when the holidays are taken and if bank holidays are used too), i need to allow a break if working 6 continuous hours and drinking water needs to be available, i need to pay for sick days and i would need to pay for maternity pay if that ever came up (terrible use of phrase there!!)... Is there anything else thats part of the basics that ive missed out? Ive also read about offering silly contracted hours (but then offering 'over time') to get out of paying more holiday pay/maternity pay etc as you only pay what the employee is contracted to? Is that right/legal?

X

anamenottaken

MummyMummy wrote: »

Hello, before i start i just want to point out i have read 12 pages of a search on here, business link and the hmrc site and i still dont have an answer? Im obviously being stupid and have missed what i am looking for (as i highly doubt im the first to ask about employing staff!) so if somebody has an answer/can point me in the right direction it would be very much appreciated. Thank you!

I am considering taking on an employee (paying just over minimum wage... Well just over the october 2012 min wage that i seen on the direct gov website earlier and then commision on top) and from what i have read I need to pay the employees tax requirements... How much more do i need to pay out on top of the wages or is the tax requirements deducted from the employees wages after i pay the wages? Hopefully that makes sense to somebody somewhere?

Also, is it really just as straight forward as getting employers insurance, interviewing and choosing who i want to work for me, registering as an employer and then getting an accountant to sort the rest for me?

I understand i need to draw up a contract (with a solicitor would be ideal) and a staff handbook and that i need to allow a certain amount of paid holidays (but i can decide when the holidays are taken and if bank holidays are used too), i need to allow a break if working 6 continuous hours and drinking water needs to be available, i need to pay for sick days and i would need to pay for maternity pay if that ever came up (terrible use of phrase there!!)... Is there anything else thats part of the basics that ive missed out? Ive also read about offering silly contracted hours (but then offering 'over time') to get out of paying more holiday pay/maternity pay etc as you only pay what the employee is contracted to? Is that right/legal?

X

First you calculate the gross wages (that is what you have agreed to pay per hour).

It is the employee who actually pays any income tax (and employeE NI) - it is their income which is taxed and is subject to employee NI. The employer is simply the means HMRC uses to collect the tax from the employee and pay it over to them without the employee getting their hands on it.

As an employer you need to work out how much EmployeRs NI is due. That is your cost as an employer.

What you need are written particulars of employment - that is a statement of what the terms and conditions are. Parts of a staff handbook can form part of that. You will find the minimum requirements on sites such as you have visited. It is not necessary to involve a solicitor but an HR professional could be useful.

themull1

You don't have to pay for sick days.

MummyMummy_2

Thank you both for the help! i didnt know that about sick days, i read it as i had to pay for them.

I have just read that as an employer I need to pay 13.80% (i couldnt find that info yesterday which is why i posted this thread) of what the employee earns (if for eg. The employee earns £290.61 per week i would need to pay hmrc £40.10 which i pay on top of my other self employed taxes... Is that correct?) so from what has been said on this thread the only thing i as an employer need to pay is the employees wage and the 13.80% (plus the other benefits i mentioned above) surely it cant be that simple? X

property.advert

MummyMummy wrote: »

Thank you both for the help! i didnt know that about sick days, i read it as i had to pay for them.

I have just read that as an employer I need to pay 13.80% (i couldnt find that info yesterday which is why i posted this thread) of what the employee earns (if for eg. The employee earns £290.61 per week i would need to pay hmrc £40.10 which i pay on top of my other self employed taxes... Is that correct?) so from what has been said on this thread the only thing i as an employer need to pay is the employees wage and the 13.80% (plus the other benefits i mentioned above) surely it cant be that simple? X

You could start playing around with http://www.payroo.com/ to get some experience not only of preparing timesheets and payroll information but you could also use Payroo to do your payments to HMRC I believe. It is permanently free for small numbers of employees.

As for the amounts you need to pay, you are collecting the employee tax and NI due. You would need their P45 and knowledge of whether they had another job to generate the right figures.

You also have to pay the employer's NI as you rightly surmise, at 13.8%

As you also realise, you do need to formulate some company policies. Fairly soon you will be compelled to deal with compulsory pensions I understand and presumably have to pay away something for that after making various calculations.

The business advisory places presumably have some check list and I believe they offer free advice up to certain limits. It could well be worth you using them as a resource to save time in your search.

Owain_Moneysaver

themull1 wrote: »

You don't have to pay for sick days.

You don't have to pay full wages, but you do have to pay Statutory Sick Pay - currently £85.85 per week - to qualifying employees.

paulwf

OP you've got it broadly right - and once you have the framework in place for one employee (contract etc) taking on more staff is a piece of cake. There's a few oddities such as providing an accident book and first aid kit but this must not contain any medicines. However most of it is common sense.

Anyway, I just wanted to say from experience the best plan is to be conservative in what you offer as you can always increase benefits later. OTOH it is much harder to withdraw benefits. For example start on a zero hours contract so you can arrange a rota to suit you, and perhaps start on min wage for a probation period then increase it when you are happy with their performance.

I've had staff that I gave full sick pay or a high rate of pay and regretted it but once you offer it you can't really take it away. I now review staff performance and increase their perks over time...gives them something to aim for and it rewards the right people.

MummyMummy_2

Ive read a few people say taking on your 2nd+ employee is easier than your first. I know about accident books and first aid kits as i asked enviromental health for their advice before setting up as just myself. Ive also read that unless you have over 5 employees you dont need to have a written health and safety policy? ive not confirmed that with anybody, just what ive read.

Im worried about a zero cntract as from what ive read employees dnt have to work if you ask them to? And really i do need them to be there for all the hours i am open for walk in clients (current hours are for over 30 hours per week, but under 48 which again ive read is a cut off that employees can work?) The industry standard is minimum wage (id be looking at paying £6.25 which is just over the october min wage) and then commision over a certain amount. The work is hard And i think for doing the job they deserve more than min wage, so i def think a set commision is a good idea as it encourages staff to push themselves to earn that extra money and in the process make extra money for me too. A probationary period i have read. S a must too and it has to be reviewed at the end otherwise its legally assumed its ended and a full employment cntract has been issued? X

Mistral001

The employer does not have to pay for sickness pay. They have to pay statutary sick pay after three days if the employee has a sick note from the doctor and then claims that back from the government. So in effect the employer does not have to pay for days not worked due to sickness.

However, many companies have sick pay schemes or pay for insurance so the the Stautary Sick Pay of £80 odd per week is topped up to full salary.

property.advert

All these bells and whistles are great but they are just not really possible for the smallest of businesses moving from one man band to first employee. Pick the wrong one and before you know it, they are exploiting the system. What makes it possible in large organisations is the weighted averages which come into play over time and with scale. One problem out of one employee is a 100% hit rate.

Good comments on starting with a little and building up, as trust is built up along with loyalty.

podperson

The paye and employee NI is taken out of the employee wage and you just pay it to HMRC. The employer NI you need to pay. You don't really need an accountant to do it, I've always done it myself and it's fairly straightforward, especially if you don't have many staff. You can also get programs from the tax office to work out the deductions for you.
The min holiday entitlement for full time workers is 28 days, this can include bank holidays though. You have to pay SSP, anything over this would be agreed in the employee contract.
Employees can work over 48hrs a week if they sign a form to agree to it - I've usually been asked to sign these as standard practice when I used to do call centre work.