How much does a 40K p/a employee cost?

[northernladuk]

you also forgot about bonus, + other benefits you get as
an employee like sickness pay and employment rights etc.

as a contractor you are taking a lot more risks which you have
to factor in so you can never completely compare both types purely
on money.

From what I read all he wants to know is how much the client has got in his budget for a full time guy to do a job. Olly is going to do the work instead so he is doing his homework to find out how much he can ask for so as not to blow the budget set aside for the full time guy.

He isn't trying to compare anything. Just to find out how much dollah he can twist out of the client.

[Olly]

arrrrrrrgh....ask (and then rephrase) a simple question

you're right, I did forget about bonus but I'm not sure this company does them....probably do though - so what's that 2.5%? less maybe

I mentioned sick days.

Ok once again....I'm not concerned in the slightest about the ins and outs of the costs of being a contractor.

I'm trying to figure out as best I can the direct cost of a full-time employee and by that I mean things they wouldn't pay if the FTE weren't there. HR, IT infrastructure etc etc are not factors.

There appear to be the following costs, and these costs only

1. Salary 40K
2. Pension 3% ?
3. Employees NI
4. Bonus 2% maybe (thanks BrightSpark)
5. Holidays 23 + public (someone said 12...I say it's 8)
6. Sick days (when you aren't productive) - let's say 3 but I won't include these.
7. Any training
8. Any other stuff I forgot?

[Olly]

From what I read all he wants to know is how much the client has got in his budget for a full time guy to do a job. Olly is going to do the work instead so he is doing his homework to find out how much he can ask for so as not to blow the budget set aside for the full time guy.

He isn't trying to compare anything. Just to find out how much dollah he can twist out of the client.

you got it ....please tell me though ...was I so unclear?

[northernladuk]

you got it ....please tell me though ...was I so unclear?

Erm, not really to be honest. The only reason I could think you need to know the TRUE cost of an employee to a company was to bill for it. Couldn't think of any other reason you might have asked this on here and then the line..

Question is what's an equivalent day rate to bill?

Kinda told me why.... simples...

To be fair though we do get asked something like this alot to the point that one poster had it in his sig for awhile (was that you Mal)? So I think people just jumped to a conclusion which in this case wasn't correct.

My invoice is in the post Olly, will expect payment in 15 days. There is a good chap

[Olly]

You didn't answer the question yet, just clarified it for those on top hourly rates who can only spare a moment to skim read what I wrote

I see it soooooooo much on here, for IT bods, who I thought were all about accuracy and so on, it's amazing the number of replies that bear little resemblance to the OP's query.

If my query wasn't up to IT bod standard then blame it on the Helles, no German lesson tomorrow so starting early

[northernladuk]

You didn't answer the question yet, just clarified it for those on top hourly rates who can only spare a moment to skim read what I wrote

I did answer!! I said double it!! Now pay up...

Invoice number 2 in the post.

[Olly]

I did answer!! I said double it!! Now pay up...

Invoice number 2 in the post.

Yep but that's wrong....

Ok feck it ..I'll use t'internet and do it myself
Employers NI = 5059.07
Pension at 3% = 1200
Bonus at 2% = 800
Training cost (5 days) = £2000

Ok so we'll assume you could work 229 days = 174.67 p/d
5 lost through training and 3 through illness = 1397.38

Add them all together and we get 50456.45
Divide that by 229 and we get £220.33 p/d and the company would not be out of pocket.

Hmm...I'm asking for £250....they were expecting me to invoice a 12th of 40K monthly and take "holiday" as and when but up to the permy limits...no way I'm doing it for less than £250...it's a great job in terms of learning / polishing skills but when I can get 400 plus elsewhere!

[malvolio]

I'm not oging to try and list them all but there are aound 20 components to a permie salary over and above salary and taxes, ranging from pension admin to the desk he sits at and the support cost for the PC on his desk. So figure on adding between 80% and 100% to base salary.

And you can't work a day rate from employment cost, since some of those overheads still apply, so stick to the rule of thumb that a £40k pa income equates to £320 a day assuming you want the same net.

[Olly]

I'm not oging to try and list them all but there are aound 20 components to a permie salary over and above salary and taxes, ranging from pension admin to the desk he sits at and the support cost for the PC on his desk. So figure on adding between 80% and 100% to base salary.

And you can't work a day rate from employment cost, since some of those overheads still apply, so stick to the rule of thumb that a £40k pa income equates to £320 a day assuming you want the same net.

First paragraph : one extra or less bod on their FTE count makes no difference and many still apply to contractors, e.g. IT support

Second paragraph: I just did! Help me improve it

[northernladuk]

I'm not oging to try and list them all but there are aound 20 components to a permie salary over and above salary and taxes, ranging from pension admin to the desk he sits at and the support cost for the PC on his desk. So figure on adding between 80% and 100% to base salary.

And you can't work a day rate from employment cost, since some of those overheads still apply, so stick to the rule of thumb that a £40k pa income equates to £320 a day assuming you want the same net.

And just to prove my double it rule of thumb for no reason than I chuffed its not far off...

40 *2 = 80 / 12(month) = 6.7 / 21(day) = 319 per day. Bingo!!!