Wage costs, true cost to employer

J

johnnyg

Registered User
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Hi,

If you pay someone 12 euros an hour what is the true cost to the employer?

I need to take on someone and was wondering how much will they cost overall to pay them
 
it depends on the amount of hours you pay them. after a certain point the rate of employers prsi goes from 8.5% to 10.75% (i think it's €356).

so if you pay 20 hours, then the cost is €240 + 8.5% employers prsi = €260.40
if you pay 40 hours, then the cost is €480 + 10.75% employers prsi = €531.60
 
Bear in mind the true cost per hour is the cost of the hours paid in relation to the hours worked.
So taking billythefish's example above 40 hours per week at €480 + ER PR = €531.60
You pay that for 52 weeks = €27,643.20.
However the employee has 4 weeks holidays paid and 9 statutory public holidays so thats almost 6 weeks per year paid but not worked.
So €27,643.20 / 46wks worked / 40 hours p.w. worked = €15.02 cost for every hour the employee actually works.
Anyone looking at a service where the employee wage is part of the cost charged out needs to bear this in mind, say a maintenance person with an employee charging €xx / hr for labour. I've found a few people in that situation underpricing their charge out rate.
 
You also need to take into account the admin cost to the company to deal with this if you want a "true" cost.

For example - payroll run each week/month - how much time taken? How much the person doing this costs? Is the accountant doing this or is it in-house?

Also, with all the employer obligations, employment law, drawing up contracts etc. do you need to take advice on this? How much does this cost? Do you need to factor this in also?
 
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