When to consider hiring: the numbers to check first
Before hiring, check these three things first
Before hiring, check three things in your accounts.
Revenue to support the cost
An employee on a £30,000 salary costs the company around £33,000 once Employer National Insurance contributions (NIC) are included. You need to be confident the business generates at least that much additional revenue as a result of the hire, or that your current revenue can comfortably absorb the cost.
Sustainability of demand
A busy quarter does not justify a permanent hire. Check whether the demand driving your workload is genuinely sustainable or seasonal before committing to ongoing payroll.
Current cash position
A new employee means a payroll commitment from month one, regardless of when customers pay. Check your bank balance and your expected cash receipts for the next three months before committing.
💡 Good to know: Speak to us before hiring. We can model the financial impact on your Profit and Loss and cash flow, confirm auto-enrolment requirements, and set up the payroll. The Employment Allowance of up to £10,500 off Employer NIC per year also becomes available once you hire your first non-director employee, which changes the optimal salary calculation.
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