[Mike55]

This is to help people.

If you don't like the fact that people want to do better then you, then don't read it.

Originally posted at: http://purewash.blogspot.co.uk/

The cost of employing.
There are many people out there getting incorrect information when it comes to the true cost of employing and its putting them off.

On some forums, I've seen some extremes that you need to earn x5 the employees wage to be able to cover the cover the cost.

This is rubbish.

What I intend with this post to reassure want-to-be employers that employing your first member of staff isn't as costly or hard as they think.

Everything in this post is from my experience of employing.

Anyone in any field can use this post to work out their employment costs.

I will be writing a second part of this post for the window / gutter cleaning industry next week.

So, what costs do we need to consider?


Wages

This is obvious. As I write this the current national minimum wage (2015-2016) is: £6.70 for anyone aged 21 and over.

For this example we will pay our new member of staff £7.00 per hour.

£7.00 x 40 working hours per week = £280.00

Employers national insurance
Currently, this is rated at 13.8% for employees over 21. The first £156.00 of wages per person per week isn't subject to this rate.

£280 - £156.00 = £124.00 (£124.00 is now subject to the 13.8%)

£124.00 + 13.8% = £141.11 - £124.00 = £17.11

Total cost per week: £17.11

Pensions
I have no experience with this yet, as my company doesn't need to set anything up until 2017. (this was written in early 2016)

For more information please visit: https://www.gov.uk/workplace-pensions/about-workplace-pensions

Payroll

I don't see the point in doing this yourselves to save a few quid.

For me, my accountant charged me £37.00 a month for my books and an extra £7.00 per month for each employee.

I highly recommend having an accountant when your employing as it can save time that money can't buy back.

£37.00 + £7.00 = £44.00 ÷ 4 = £11.00

Holiday pay
Each employee is owed 28 days holiday a year total.
Using the same example of £7.00 per hour for our new employee = £56.00 per day x 28 days = £1568.00 ÷ 52 weeks = £30.15

So you need to earn £30.15 per week to pay for your employees holidays. Not as bad as you thought?

Insurance
Employers liability insurance cost is different in each field.

My public liability covers everything that is worked on. Not all policy's cover this, so make sure you read the small print.

My current employers and public liability is £45.75 per month.

£45.75 ÷ 4 = £11.43 per week.

The basic cost of an employee per week.

Wages: £280.00
Employers national insurance: £17.11
Accountant and payroll: £11.00
Holiday pay: £30.15
Public and employers liability: £11.43

Total: £349.69

÷ 5 days

= £69.93 per day.

Easy peasy right?

Next is to work out the other running costs of your industry. I will be writing next week about the extra running cost in the window / general cleaning industry.

Also, I will be making an in-depth video of this post soon, so please subscribe to my YouTube channel so you don't miss it.

https://www.youtube.com/channel/UCpcOZbe7ZEm8WNRiUFi3opQ

While this post is informative James, in terms of giving a basic overview of employing costs, unfortunately it's only the tip of the iceberg in reality (although I know you are going to do a part 2 :-) ). 

The problem is if you pay anything like a half decent wage the profit margins are squeezed beyond belief....

If you factor in other costs such as the extra equipment, second van expenses (loan to buy, MOT, servicing, fuel, tax etc),  then ofcourse absorbing the VAT if you hit that (unless you can pass some on to the customers), add the profit left to your own wages if you're out working will probably mean your then paying higher rate tax on it too!  Profit margin left is shocking!

[Steven Biggs]

Clean clear . I think the moral of the story is don't pre notify your customers . You would have definately worked a lot more if not having to do that .

[dazmond]

Interesting post.

What I don't understand is how you employ someone on the books 5 days a week in this industry when you can't work 5 days a week.

Most of the time 4 full days Monday to Saturday is best you can manage.

Understand people on here do employ just interested how they manage with lost time due to bad weather;  bad enough cost yourself money let alone paying someone else.

Lee

Lee i've personally had one of the the worst winters i've ever had. Second only to the winter of 2010 when we had -15 temps for over a month. It seems to me that in January, we had a personalised storm for every week, its was either Bernie, Bertha or some other Americanism. It was also like this just before Christmas if you remember ? I pre notify my work, most of it but not all. I just had no incentive to let anyone know i'd be round tomorrow because the news weather forcast had just told me there would be 50mph gales all day and night. So i never bothered. I just resigned myself to the fact i was having a day off. Of course i don't need the money. I don't mean that in a smug way, of course i'm not a millionaire and i need my wages as much as the next man. But i do put some aside for a rainy day. And i didn't fancy going out cleaning in a storm.............So i'm behind.

Now contrast this with my mate, he's my best mate. He's the same as me, only difference is he has an employee (and obviously a lot more work!!) . He didn't want to go out either, but !!!! He has an employee, and his employee wants to go to work and have his wage at the end of the week. You know how many days he lost due to weather this winter ? Not more than two. Hard to believe eh ? When i spoke to him on the fone and i was at home due to the bad weather, he was in his van talking to me and his employee was out working because he wanted his wage. When he told his employee it was getting a bit bad, his employee said...........no its fine, i'm ok i'll keep going. And they did.

The moral of the story is that when you work for yourself like me, you can suit yourself. When you have an employee, you also have a certain responsability to them..i.e give them a full time job like they wanted. Ultimatlely i've had loads of time off in January, he's never missed a beat. Mainly down to the fact he has an employee...................go figure.

i used to be like you.sacking work off the next day if the weather was forecast bad(most of the time its not as bad as forecast),finishing early at the first sign of rain etc.i also earned considerably less money over the course of the year!what i coincidence eh?

IME it very rarely rains full on all day with strong wind.once in a blue moon.i only need to work 6 hours "on the glass" a day 5 days a week to keep up with my schedule.i also dont pre notify MOST customers.i do have to for some for access reasons but its only a small percentage.probably less than 10%.

ive even shocked myself in what weather i can work in.the other week i did 6 hours in pouring rain(posh houses too!)it was fairly windy at times and most customers paid me there and then and never even mentioned the weather.i also got a few brews.these were wealthy retired folk mostly so they were at home.

i earned £240 that day and once home and dry i had a sense of satisfaction that id kept on schedule.

when you lose a day to weather ITS LOST FOREVER!you can never catch up as it had a knock on effect on the rest of your work.if you regularly take days off due to bad weather over the course of a year it could mount up to a months income.

dont forget we all take time off  during the year (illness,van/equipment problems,holidays etc)and thats normal for all of us but most of the time weather shouldnt have much of an effect.maybe 5 days at most lost.

[SeanK]

Iv lost a pile of work because of the winter storms and over this last three weeks Iv pulled most of it back plus that's with 2 days off with man flu last week, yes if your on a 40 hour week 46 weeks of the year then its going to be a hard struggle to pull it back but
would you want to be in that situation in this game, I certainly wouldn't.
I would love to see Dazmond cleaning in storms with 60 mile an hour gusts, or better still get it on video.

[sunshine windows]

I found the original post a good read.

when you lose a day to weather ITS LOST FOREVER!you can never catch up as it had a knock on effect on the rest of your work.if you regularly take days off due to bad weather over the course of a year it could mount up to a months income.

Not the case of you don't overcrowd your work schedule. Remember Daz, work smarter not harder 

[Rich Wilts]

Exactly. It's not quite as black and white as its gone forever. Not necessarily.

Monday might be written off because unexpectantly it chucks it down. You sit in your van all day waiting for it to  pass.  It doesn't. Monday, Tuesday, Wednesday and  Thursday you work til 5.00 instead of 4.00. By the end of the week you're not behind, you've earnt a full weeks wage and all houses are done to schedule.

[CleanClear]

Interesting post.

What I don't understand is how you employ someone on the books 5 days a week in this industry when you can't work 5 days a week.

Most of the time 4 full days Monday to Saturday is best you can manage.

Understand people on here do employ just interested how they manage with lost time due to bad weather;  bad enough cost yourself money let alone paying someone else.

Lee

Lee i've personally had one of the the worst winters i've ever had.
<snip>
The moral of the story is that when you work for yourself like me, you can suit yourself. When you have an employee, you also have a certain responsability to them..i.e give them a full time job like they wanted. Ultimatlely i've had loads of time off in January, he's never missed a beat. Mainly down to the fact he has an employee...................go figure.

i used to be like you.sacking work off the next day if the weather was forecast bad(most of the time its not as bad as forecast),finishing early at the first sign of rain etc.i also earned considerably less money over the course of the year!what i coincidence eh?

IME it very rarely rains full on all day with strong wind.once in a blue moon.i only need to work 6 hours "on the glass" a day 5 days a week to keep up with my schedule.i also dont pre notify MOST customers.i do have to for some for access reasons but its only a small percentage.probably less than 10%.

ive even shocked myself in what weather i can work in.the other week i did 6 hours in pouring rain(posh houses too!)it was fairly windy at times and most customers paid me there and then and never even mentioned the weather.i also got a few brews.these were wealthy retired folk mostly so they were at home.

i earned £240 that day and once home and dry i had a sense of satisfaction that id kept on schedule.

Daz, i know all that. I'm not changing the way i operate at all. I'd sooner go boil my head than get shocked by just how bad weather i can work in.
 I was just thinking out loud really as James measures the costs of employing and i was thinking of the guy who asked the other day about ...what do you do with employees, give them shorter hours in the winter ? As it turns out having an employee can be a driving force to get out and stay out everyday.

[windowswashed]

Interesting post.

What I don't understand is how you employ someone on the books 5 days a week in this industry when you can't work 5 days a week.

Most of the time 4 full days Monday to Saturday is best you can manage.

Understand people on here do employ just interested how they manage with lost time due to bad weather;  bad enough cost yourself money let alone paying someone else.

Lee

Lee i've personally had one of the the worst winters i've ever had. Second only to the winter of 2010 when we had -15 temps for over a month. It seems to me that in January, we had a personalised storm for every week, its was either Bernie, Bertha or some other Americanism. It was also like this just before Christmas if you remember ? I pre notify my work, most of it but not all. I just had no incentive to let anyone know i'd be round tomorrow because the news weather forcast had just told me there would be 50mph gales all day and night. So i never bothered. I just resigned myself to the fact i was having a day off. Of course i don't need the money. I don't mean that in a smug way, of course i'm not a millionaire and i need my wages as much as the next man. But i do put some aside for a rainy day. And i didn't fancy going out cleaning in a storm.............So i'm behind.

Now contrast this with my mate, he's my best mate. He's the same as me, only difference is he has an employee (and obviously a lot more work!!) . He didn't want to go out either, but !!!! He has an employee, and his employee wants to go to work and have his wage at the end of the week. You know how many days he lost due to weather this winter ? Not more than two. Hard to believe eh ? When i spoke to him on the fone and i was at home due to the bad weather, he was in his van talking to me and his employee was out working because he wanted his wage. When he told his employee it was getting a bit bad, his employee said...........no its fine, i'm ok i'll keep going. And they did.

The moral of the story is that when you work for yourself like me, you can suit yourself. When you have an employee, you also have a certain responsability to them..i.e give them a full time job like they wanted. Ultimatlely i've had loads of time off in January, he's never missed a beat. Mainly down to the fact he has an employee...................go figure.

i used to be like you.sacking work off the next day if the weather was forecast bad(most of the time its not as bad as forecast),finishing early at the first sign of rain etc.i also earned considerably less money over the course of the year!what i coincidence eh?

IME it very rarely rains full on all day with strong wind.once in a blue moon.i only need to work 6 hours "on the glass" a day 5 days a week to keep up with my schedule.i also dont pre notify MOST customers.i do have to for some for access reasons but its only a small percentage.probably less than 10%.

ive even shocked myself in what weather i can work in.the other week i did 6 hours in pouring rain(posh houses too!)it was fairly windy at times and most customers paid me there and then and never even mentioned the weather.i also got a few brews.these were wealthy retired folk mostly so they were at home.

i earned £240 that day and once home and dry i had a sense of satisfaction that id kept on schedule.

when you lose a day to weather ITS LOST FOREVER!you can never catch up as it had a knock on effect on the rest of your work.if you regularly take days off due to bad weather over the course of a year it could mount up to a months income.

dont forget we all take time off  during the year (illness,van/equipment problems,holidays etc)and thats normal for all of us but most of the time weather shouldnt have much of an effect.maybe 5 days at most lost.

Spot on topic above.....when I use to employ 5 days a week, we would be out 5 days a week regardless of weather. Now I work alone I still work 5 days a week regardless of weather or i'll take 5 days a week off even in gorgeous weather, just depends if I'm too busy playing catch up and other factors. When an employee is dependant on you for wages you run it more efficiently as a business and don't judge worry about customers whinging about weather.

[lee_dewing]

8 weekly, yes I'm  waterfed pole.

I do get comments off my customers quite alot this time of year about "surprised to see you on a day like this"  so I must be fairly brave

Just not happy working out in pouring rain, surely that must make you ill?

Understand all the gortex clothing bit.

But if I had to go out everday in all weathers I think I'd be very unhappy and might even give up on being a window cleaner.

I was miserable losing time to bad weather, obviously because of lost income.

Finally put my prices up last autum and a lot less worried about lost time off work.

I don't throw the towel in straight away because of a bad weather forecast.

Even if I only go out for 2-3 hours I do.

But I think looking to go out 5 days a week every week is unrealistic.

I'm in the 4 days a week camp. (mon-sat).

But I see what Clean care says and yourself 8 weekly, having an employee makes you more focused, you find away round the pitfalls.

Unfortunately it took me along time to realise that when your self employed, it's  not how many days you can work

but how much you can make in the days that you do.

Lee

[CleanClear]

i used to be like you.sacking work off the next day if the weather was forecast bad(most of the time its not as bad as forecast),finishing early at the first sign of rain etc.i also earned considerably less money over the course of the year!what i coincidence eh?

ive even shocked myself in what weather i can work in.

And i used to be like you, thats why i don't have to go out and see how much wet i can work in. Mind you, i don't have a rent to pay, that helps. You've got it backwards Daz . You don't up your game as you get older . You're in your 40's ? Only another 20 years to go !!!   

[NWH]

If your on your own or employing someone you should be earning more than enough on working days in better weather to not have to pannick when it clouds over,2 of you out working with good work should be earning loads 2 in a van. If your on your own and you have the right work having the odd day off due to weather or a rest should never ever be a problem I would say seriously look at your work and what your earning if you disagree.

[CleanClear]

Clean clear . I think the moral of the story is don't pre notify your customers . You would have definately worked a lot more if not having to do that .

Nothing to do with pre notifying. I see the pro's and cons of pre notifying. I can still turn up for work without notifying. It just makes it easy for me to get paid, leave money out for me, unlock gates etc.. Although i do use my A frame and fence/gate hop. Working in an area where people do have genuine security concerns about people just turning up unannounced at their properties i've found it a clincher for me for getting work. I'm not chosen for my good looks 

[CleanClear]

If your on your own or employing someone you should be earning more than enough on working days in better weather to not have to pannick when it clouds over,2 of you out working with good work should be earning loads 2 in a van. If your on your own and you have the right work having the odd day off due to weather or a rest should never ever be a problem I would say seriously look at your work and what your earning if you disagree.

You'll never hear me complaining about not working    I work on my own . I'm not bothered if i have a week off . But your statement above is incorrect, you say......

2 of you out working with good work should be earning loads 2 in a van

The problem with that is that unless they are equal partners, i'll assume one is an employee. He won't be earning loads, only one of them will. The employee will be panicking at having time off. Presumably unpaid ?

[NWH]

Take it from me 2 of you in 1 van will be earning lots of money.

[CleanClear]

Take it from me 2 of you in 1 van will be earning lots of money.

I don't need to take it from you, i've done it. How will the employee earn when he's not working , thats  what we're trying to figure out ?

[NWH]

If he can't work sell his bottom.

[8weekly]

Take it from me 2 of you in 1 van will be earning lots of money.

If two men in a van earn £550, two men in two vans will earn £700.

[CleanClear]

Take it from me 2 of you in 1 van will be earning lots of money.

If two men in a van earn £550, two men in two vans will earn £700.

You raise an interesting point there 8weekly. If you're going to employ another man do you get him to help you or set him free with another van ? Also even in your example above, i'd assume you're talking about residential work and not huge commercial work where the workers are on site for hours as opposed to the few minutes it takes to do a house.

[8weekly]

Take it from me 2 of you in 1 van will be earning lots of money.

If two men in a van earn £550, two men in two vans will earn £700.

You raise an interesting point there 8weekly. If you're going to employ another man do you get him to help you or set him free with another van ? Also even in your example above, i'd assume you're talking about residential work and not huge commercial work where the workers are on site for hours as opposed to the few minutes it takes to do a house.

Yes, residential. I don'r really have experience of large commercial work, but I'd imagine it could be different with two men on one job all day.

[windowswashed]

commercial work ok two people working together, domestics pointless both being on same house, same street in opposite directions more beneficial