The true cost of hiring: how employee benefits impact your bottom line
Hiring a new employee is an exciting and daunting time. When you are looking at what it will cost you it’s important to look at the full cost of employment (which will include taxes, pensions, benefits) not just the salary.
Breaking down the real cost of employment
Base salary – this is often the most obvious bit that most people remember or are aware of.
Employers National Insurance Contributions (EMPNICs) – Employes must pay EMPNICs on top of wages.
Pension Contributions -auto enrolment means business must contribute to employee pensions which is usually a % charged on top of wages.
Employee benefits – Private healthcare, bonuses, and training add value and make you a more attractive or a competitive employer but they come at a cost which you should include in your calculations
Considering benefits
Offer strategic benefits – consider what employees actually value – for example flexible working or development opportunities might give you scope without increased cost.
Salary Sacrifice – these can reduce tax liabilities for both employees and employers.
Plan the costs into your cashflow – this is really important, for growing businesses, making sure you capture all the costs and add them into to your cashflow to avoid surprises.
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