Is Your Small Business Set To Grow?

Throughout the 2020s, there has been a major rise in small businesses being established – mainly out of necessity as the world was gripped and shaken by the global pandemic. People found that they needed to change their career direction and start fresh after their regular incomes and job security was pulled from underneath them without warning. Many of these businesses have prospered and grown over the last two years and many are now preparing to take on employees for the next stage of their small business growth.

For small business owners who have never had any experience with running a business other than being catapulted into it headfirst, they may not understand how to effectively take on an employee other than themselves and what needs to be done.

From what it costs to holidays and breaks and sickness pay, handling employee onboarding and payroll for someone other than yourself can feel like a major job in itself.

Cost

With small business growth, the biggest upfront consideration is how much your new employee is going to cost your business. It is not just a case of knowing how much you are paying them by the hour to by the month – as it is not the only cost associated with them.

What you pay them has to meet the national minimum wage and increase that rate each year that the national minimum wage increases. If you choose to pay an annual salary, you will need to break it down to an hourly rate that still meets this requirement.

On top of this, you will have to pay National Insurance contributions payable on earnings over £737 per month, as well as paying pension contributions of 3% of salary on earnings over £833 per month. You may also need to work out additional hourly rates if you need your employee working extra hours. All of these considerations need to be taken into account on top of their pay.

Breaks and Holidays

Your employee will have a set amount of hours for working – such as a 9 to 5 five day week with an hour for lunch on each day. An employees’ pay and holiday will be worked out based on the working hours of the business – including if an employee only works part-time at 20 hours a week.

Employees are entitled to an uninterrupted break of at least 20 minutes if they work 6 hours or more during a day. You may not realise how much extra it costs you to pay people for their lunch break and be generous towards an employee – especially when you take on even more.

Statutory holiday pay is usually 20 days plus bank holidays, and all employees are entitled to take them. They cannot be paid if they don’t want to take it or cannot during the minimum requirement during the year. Even if they only work a few hours per week, they must take time off and be paid for it so they receive the equivalent of paid holiday each year.

At Pebbles Bookkeeping, we help every small business who wants to grow not just with small business bookkeeping solutions, but also in areas around payroll outsourcing services and every aspect of onboarding new employees for your business.

Contact our team today to discuss your small business growth and the process of hiring a new employee for your business.