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Taking on an employee. Do I have this correct

  • 30-12-2020 6:19pm
    #1
    tobeme2020
    Registered Users, Registered Users 2 Posts: 93 ✭✭


    Min wage is 10.10 an hour and Its an 8 hour day. 8x10.10 = 80.08 (say 80e a day for easy calculation)

    I charge 150e a day for my employee to the client working for. 750 a week.

    Out of that 750, I deduct 28%(which is 210)of thst for income tax, prsi and usc. 750-210= 540

    I'm left with 540 Minus his/her 400 weekly wage is 140 profit.

    Out of that 140 profit I deduct 28%(39.2e) for my own income tax, prsi and usc out of this profit which is 140-39= 101e

    His/her insurance for the year is 1500e. Divide that by 52 = 28.8e

    Profit is 101 - 28.8e = 72.2 profit per week.

    72.2 X 48weeks = 3465.6 profit per year.

    Holiday pay is 1200e for the 4 weeks which leaves 2265.6euro profit per year for 1 employee if it was a full 48 weeks working.


Comments

  • #2
    namenotavailablE
    Registered Users, Registered Users 2 Posts: 59,703 ✭✭✭✭namenotavailablE


    I'd suggest calculating using annual values>

    Total earnings from client in the year______________________XXXX
    Deduct:
    Gross cost of employee (incl holiday pay and employer PRSI)___(XXXX)

    Your profit___________________________________________ XXXX

    You'll pay tax/PRSI/USC on your profit.

    A couple of extra points to note:

    1. As an employer, you need to pay employer's PRSI on tip of the employee's gross pay- that doesn't appear to be factored into the above calculations. The rate is 11.05% of gross pay. So, your total cost of employing someone on an annual gross of c. €20,000 would be €22210

    2.Your calculations of tax/PRSI/USC don't appear to allow for the tax credits which an employee would have- typically, an employee could have €3300 in tax credits per year to reduce his/her PAYE deduction. There are plenty of tax calculators out there which might help- see this post for a list:

    https://www.boards.ie/vbulletin/showpost.php?p=115109605

    Free Excel net pay calculator- https://taxcalc.eu/monthlyss/Employee%20PAYE%20calculator.xlsm



  • #3
    tobeme2020
    Registered Users, Registered Users 2 Posts: 93 ✭✭tobeme2020


    namenotavailabl wrote: »
    I'd suggest calculating using annual values>

    Total earnings from client in the year______________________XXXX
    Deduct:
    Gross cost of employee (incl holiday pay and employer PRSI)___(XXXX)

    Your profit___________________________________________ XXXX

    You'll pay tax/PRSI/USC on your profit.

    A couple of extra points to note:

    1. As an employer, you need to pay employer's PRSI on tip of the employee's gross pay- that doesn't appear to be factored into the above calculations. The rate is 11.05% of gross pay. So, your total cost of employing someone on an annual gross of c. €20,000 would be €22210

    2.Your calculations of tax/PRSI/USC don't appear to allow for the tax credits which an employee would have- typically, an employee could have €3300 in tax credits per year to reduce his/her PAYE deduction. There are plenty of tax calculators out there which might help- see this post for a list:

    https://www.boards.ie/vbulletin/showpost.php?p=115109605



    I was using a weekly basis as it will be part time. One week it could be a full week, the next it could be two days and the next it could be none. Im trying to calculate how much extra it would to bring in much needed help as long as its not to excessive.


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