How to calculate total cost of salary to an employer

godtabh

How do you calculate the total cost of an employee to an employer? ie employer prsi contributions etc.

ie if I earn €50k (i dont!) how much does that cost my employer?

Eoin

This page says:
4.25%: Earnings up to €356 per week.
10.75%: Earnings above €356 per week.

Is this right? I didn't realise it was so high...

There are probably other factors that could determine the full cost: pension / training / sick leave / insurance etc. Some might even factor in extra utilities costs, computer equipment etc.

Not that this is the wrong forum - but you might get better responses in the Entrepreneurial & Business Management forum, as you might find more company owners there. let me know if you want me to move it.

jackofalltrades

I multiply the salary by 1.2 to get a very rough idea.
This doesn't include the cost of "housing" the employee.

godtabh

I'm due a salary increase.

I'd rather the money go towards a masters.

I know the cost of the masters. I'm trying to cost how much the pay increase will actually cost and then I want to propose that I forgo the pay rise for the company paying for the masters.

Clauric

godtabh wrote: »

I'm due a salary increase.

I'd rather the money go towards a masters.

I know the cost of the masters. I'm trying to cost how much the pay increase will actually cost and then I want to propose that I forgo the pay rise for the company paying for the masters.

I'd suggest you ask your employer to pay for your masters. et them to give you the rise, then ask to reduce your salary by the cost of the masters. Your employer will save taxes on the masters (normally an allowable expense against the P&L) as well as reducing their PRSI liabilities from your wages. Similarly, your tax and PRSI liabilities will be reduced due to your reduced salary.

You should however take into account whether you'd be better off paying for the masyets yourself and claiming the tax back and also how it might affect your pension (especially if it is an averaged annual pension or defined contribution pension, defined by salary). There might be a question of BIK, but you would need to check with Revenue and your HR/payroll dept.

godtabh

Pension doesnt come in to it

BIK also doenst apply as training/personal development related expenses are not applicable to BIK

Mrs OBumble

Eoin wrote: »

This page says:
4.25%: Earnings up to €356 per week.
10.75%: Earnings above €356 per week.

Is this right? I didn't realise it was so high...

Yes. Thereabouts anyway (I didn't check the exact values) It's one of the reasons why some lower skill industries prefer part-time employees.

tatli_lokma

Eoin wrote: »

This page says:
4.25%: Earnings up to €356 per week.
10.75%: Earnings above €356 per week.

Is this right? I didn't realise it was so high...

yes this is correct. Used to be 8.5% instead of 4.25% so it has become cheaper to employ a part timer in certain instances. It also explains why many people have been put on p/t hours under the justification that there isn't enough work for f/t, but in actual fact they are doing the same amount of work as before but in less paid hours.

Welease

It's worth nothing that the real cost may be considerably higher than you believe, but it will heavily depend on the industry, size of company, support etc.

A multinational I worked with put the average cost of an employee at around €150,000+ (irrespective of wage).. For every x amount of staff hired, they needed to hire more IT support staff, canteen staff, cleaning staff, extra desks/hardware, computers, adminstrators, HR staff, heating, extra management, lighting, bigger buildings, training both for the employee and for the extra support staff required to support them etc etc etc.... It all adds up.

godtabh

The company I work for has less than 10 employees so I expect the salary cost will be the major one and other costs will be minimum.

nbar12

godtabh wrote: »

How do you calculate the total cost of an employee to an employer? ie employer prsi contributions etc.

ie if I earn €50k (i dont!) how much does that cost my employer?

You earn €50k a year? :pac:

Tigger

1.2 times is about right for full time staff

Eoin

I think paying for a masters might appeal to them more than giving you a pay rise. I'd imagine that staff are more likely to stay in the company, at least until the course is finished anyway.

srsly78

And usually they make you sign an agreement to pay the company back for the course if you leave within X years.

RATM

Eoin wrote: »

I think paying for a masters might appeal to them more than giving you a pay rise. I'd imagine that staff are more likely to stay in the company, at least until the course is finished anyway.

Plus the employer should be able to take the cost of the Masters out of the profits before they reach the tax man, making it even more attractive. A €6k Masters will require you to earn about €7.5k pre tax to actually pay for it. But it would only cost your employer €6k and Revenuie wouldn't see the €1.5k. This is all provided the Masters is in some way related to your work of course.

godtabh

Thats what I am thinking.

The masters has been approved but my employer wont be contributing to it as it stands