Posted on 15th February 2016 by Accountant
Most small businesses might be asking, if they can afford to employ somebody. Basically if you pay employee minimum wage of €9.15 per hour, it will actually cost you €10 per hour (includes wage, public holiday, annual leave, PRSI) and employee will work only 90% of time; 10% of time is entitlement to annual leave and public holiday.
Your accountant’s fee may raise. Processing payroll up to 5 employees might be free, if you are paying agreed monthly fee by direct debit, otherwise the payroll fee could be around €5 per each employee (if employees are paid monthly) or around €3 per employee (if they are paid weekly). Yearly cost for payroll process might be around €60 per year for each monthly paid employee or €156 yearly for each weekly paid employee.
Full-time employee, 7.5 working hours per day, 37.5 hours per week, minimum wage €9.15 per hour
| Basic pay payments to employee | |
|---|---|
| Minimum wage per day | € 69 |
| Minimum wage per week | € 343 |
| 232 real working days per year cost | € 15,921 |
| 9 days of public holiday per year cost | € 618 |
| 20 days of annual leave cost | € 1,373 |
| Basic wage per year subtotal | € 17,911 |
| Employer’s PRSI 8.5% cost | € 1,522 |
| Total wage cost per year | € 19,434 |
| Average working hours per week | 33 |
| Average working hours per day | 7 |
| Average wage cost per week | € 374 |
| Average wage cost per day | € 75 |
| Real wage cost per hour | € 10 |
Employee will actually work only 7 hours per day (instead of 7.5 hours) and 33 hours per week (instead of 37.5 hours), because the employee will be entitled to 9 days of paid public holidays and 20 days of paid annual leave. You will paid extra for 29 days (218 hours) per year of no work days for employee, which will cost you € 1,990 (for annual leave+public holiday).
Part-time employee, 4 working hours per day, 20 hours per week, minimum wage €9.15 per hour
| Basic pay payments to employee | |
|---|---|
| Minimum wage per day | €37 |
| Minimum wage per week | €183 |
| 232 real working days per year cost | €8,491 |
| 9 days of public holiday per year cost | €329 |
| Annual leave is 8% of worked hours | €679 |
| Basic wage per year subtotal | €9,500 |
| Employer’s PRSI 8.5% cost | €807 |
| Total wage cost per year | €10,307 |
| Average working hours per week | 18 |
| Average working hours per day | 3.6 |
| Average wage cost per week | €198 |
| Average wage cost per day | €40 |
| Real wage cost per hour | €10 |
Employee will actually work only 3.6 hours per day (instead of 4 hours) and 18 hours per week (instead of 20 hours), because the employee will be entitled to 9 days of paid public holidays and 20 days of paid annual leave. You will paid extra for 27 days (110 hours) per year of no work days for employee, which will cost you € 1,009 (for annual leave+public holiday).
Part-time employee, 1.4 working hours per day, 7 hours per week, minimum wage €9.15 per hour
| Basic pay payments to employee | |
|---|---|
| Minimum wage per day | €13 |
| Minimum wage per week | €64.05 |
| 241 real working days per year cost | €3,087.21 |
| Employee does not qualify for paid public holiday (working less than 8 hours per week) | |
| Annual leave is 8% of worked hours | €247 |
| Basic wage per year subtotal | €3,334 |
| Employer’s PRSI 8.5% cost | €283 |
| Total wage cost per year | €3,618 |
| Average working hours per week | 6 |
| Average working hours per day | 1 |
| Average wage cost per week | €70 |
| Average wage cost per day | €14 |
| Real wage cost per hour | €10 |
Employee will actually work only 6 hours per week (instead of 7 hours), because the employee will be entitled to 20 days of paid annual leave and will not qualify for paid public holidays, because he/she is working less than 8 hours per week. You will paid extra for 19 days (27 hours) per year of no work days for employee, which will cost you € 247 (for annual leave).