Cost to employer of employing somone

sneekymum

Can anyone give me a guesstimate of what it would cost an employer to employ someone on £20,000 ?

The add-ons - like employer contributions, and pension, and sick leave , and holidays etc. Maybe office accommodation and a parking spot?

I'm looking to make an offer to a company who is currently advertising for an employee. An offer to outsource this role at a lower cost. (It's a specialist role that I can provide without any extra training).

There's a cost saving for starters - no need to pay for training.

The job is advertised at £20K - I'd just like some insight into what the employer would need to pay to have someone on that salary.

Angelicdevil

Try this

http://www.techscribe.co.uk/ta/cost-of-employment.htm

sneekymum

Angelicdevil wrote: »

Try this

http://www.techscribe.co.uk/ta/cost-of-employment.htm

".... the full cost of employing someone is between approximately 40% and 100% of an employee's salary, plus the salary itself."

A good start.

Angelicdevil

Sorry I can't help any further than that, I just happened to have a colleague in my office who knows a little more than me and she suggested that site.

paddyrg

Each company will have its own formula - one place I worked, they had a standard accounting overhead formula of +125% for permies, or +25% for contractors to cover desk, computer, electricity, access to the corporate network, email account, parking, heating, aircon, etc etc. There is no single answer, there never can be.

But also consider that the question whether they hire a permie vs a contractor is almost certainly much bigger than a straight cash value, it also includes personal empire building, petty politics, keeping knowledge within the company, loyalties, etc.

Brassedoff

sneekymum wrote: »

The job is advertised at £20K - I'd just like some insight into what the employer would need to pay to have someone on that salary.

Direct cost this year for someone top line @ £20K PA IS

Gross Salary £20,000.00
Pension £. 0.00
Tax. £. 2,112.00
NI. £. 1,470.24
Take home. £16,417.76
Tax free Allowances £9,440.00
Employers NIC £1,697.95
Effective tax rate =17.9%

Direct costs this year for someone taking home £20K PA

Gross Salary £25,268.00
Pension £. 0.00
Tax. £. 3,166.00
NI. £. 2,102.00
Take home. £20,000.00
Tax free Allowances £9,440.00
Employers NIC £2,42494
Effective tax rate = 20.8%

As for holiday pay just divide by 12, car park costs £322 PA. sick pay and pension they don't have to offer it. If you think you can get away with getting them on as a contractor, OK, but be very aware of the IR35 rules. If you get it wrong, or this job is your ONLY source of income, then you CANNOT use the contractors rules. You must go PAYE. You can get a few small freelance jobs by buying the business on sites such as freelancer etc. you'll need software tht fits the bill, I even use Freelancer as it ticks boxes in case the tax man comes knocking.

Good luck, if it were me, go 50/50 on what they would save. Unless of course you can do year 1 as a contractor, then get a meaty pay rise for year 2 and go PAYE for security.