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Wages what do i cost my employer??
Hi can sum1 tell me for instance if i was earning �250 per week what does that cause my employer an the same for �500 thanks for your help in advance
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Your question ended up somewhat garbled, but I think it is supposed to read: "Can someone tell me what it costs my employer if I earn �250 per week, and the same for �500 per week".
Since both of these salaries are above what is known as the 'secondary threshold', the employer has to pay NI to HMRC on the earnings at a rate of 12.8%. This is an additional �32 for the �250 pw. salary, and �64 for the �500 pw. salary.
So the answers are �282 and �564 respectively.
Since both of these salaries are above what is known as the 'secondary threshold', the employer has to pay NI to HMRC on the earnings at a rate of 12.8%. This is an additional �32 for the �250 pw. salary, and �64 for the �500 pw. salary.
So the answers are �282 and �564 respectively.
Good answer. Employer NI contributions are a fairly big cost.
In addition the employer may claim there are additional 'on-costs' such as payroll administration, cleaning, training, office space, a share of management's time, ny employer pension contributions... The list can go on and on. Some employers I have worked with have used an 'on costs' figure of 50% of salary a s good rule of thumb. Some have doubled the salary cost.
It really depends on what they are trying to measure
In addition the employer may claim there are additional 'on-costs' such as payroll administration, cleaning, training, office space, a share of management's time, ny employer pension contributions... The list can go on and on. Some employers I have worked with have used an 'on costs' figure of 50% of salary a s good rule of thumb. Some have doubled the salary cost.
It really depends on what they are trying to measure
there are also other costs that need to be considered - such as holiday pay you should get paid for 52 weeks of the year but in fact only work around 46 therefore bringing the hourly rate up as the other 6 weeks pay need to be costed into the 46 worked weeks. also employers liability insurance is usually worked out on the annual payroll cost so adding probably 5% to the basic weekly wage paid as insurance premium. there are possibly other things calculated in a similar way too.
NJ is of course correct.
Income tax (whether that paid by an individual or by a business) is assessed on the income that the person or the business makes.
Say I run a corner shop. I get sales of �5000 per week and it costs me �2500 to buy in the products from the Cash&Carry that I then sell. It also costs me �500 per week in rent and heating etc. for my shop. I've made a profit (income) of (5000-2500-500) or �2000, on which I paid tax.
If I now employ you as my shopworker at �250 per week, nothing has changed except my income has gone down because I have an additional expense of paying you - �250 to you in wages, plus �32 to HMRC for the NI contribution I pay as your employer. So I have now only made (2000-282) or �1718 in profit (income). That's the way it works.
If the employer is a large company, say M&S, the same principle applies but on a much bigger scale - thousands of employees. The income is still called profit and the company pays the Government something called corporate tax on this profit.
Income tax (whether that paid by an individual or by a business) is assessed on the income that the person or the business makes.
Say I run a corner shop. I get sales of �5000 per week and it costs me �2500 to buy in the products from the Cash&Carry that I then sell. It also costs me �500 per week in rent and heating etc. for my shop. I've made a profit (income) of (5000-2500-500) or �2000, on which I paid tax.
If I now employ you as my shopworker at �250 per week, nothing has changed except my income has gone down because I have an additional expense of paying you - �250 to you in wages, plus �32 to HMRC for the NI contribution I pay as your employer. So I have now only made (2000-282) or �1718 in profit (income). That's the way it works.
If the employer is a large company, say M&S, the same principle applies but on a much bigger scale - thousands of employees. The income is still called profit and the company pays the Government something called corporate tax on this profit.
Another good answer from you buildersmate(as usual!) but i dont think you have interpreted(spelling) the question as i have. Rather than speaking in terms of (corporation) tax a business has to pay, does dee mean the tax paid as an employee ie when you are paid your wages of �500 does the company pay tax on top of that. Infact dee its YOU the employee that pays the tax. If you earn �500 (gross) you will be deducted tax from that, the amount will vary according to your tax coding, you will actually be handed over much less (nett). If you are handed �500 (nett) you will have actually earned much more than �500 (gross) as your tax and employees NI would have been already deducted.
Im a BusyBee thats excatly what i am wanting to know if i were to get a cheque for �250 and �500 (nett ) thats bring home pay, how much tax does it cost my employer i know he pays 12.8% towards NI,and how do i pay the tax i just get a cheque for wages does my employer not pay it?? ovbiously i dont have a clue but im just interested, Does the employer claim any of this back?
You get a cheque for �500 net.
Depending on your personal circumstances, your gross amount will be higher than that. The difference between the two are usually just National Insurance and Tax.
Your employer deducts that from YOU, and pays the taxman on your behalf.
He then also has to pay 12.8% of your salary to the tax man as HIS contribution to your National Insurance.
The 12.8% will come out of the profit he has made in the business. Any profit he has made, he will pay tax on but this is based on the figure he comes to AFTER he has paid you and all the other expenses.
So, to answer the question, (I think). The employer does not pay tax on your salary apart from the National Insurance. But, as previous posters have explained, this does not mean he hasn't got any extra costs of employing you.
Does that make sense?
Depending on your personal circumstances, your gross amount will be higher than that. The difference between the two are usually just National Insurance and Tax.
Your employer deducts that from YOU, and pays the taxman on your behalf.
He then also has to pay 12.8% of your salary to the tax man as HIS contribution to your National Insurance.
The 12.8% will come out of the profit he has made in the business. Any profit he has made, he will pay tax on but this is based on the figure he comes to AFTER he has paid you and all the other expenses.
So, to answer the question, (I think). The employer does not pay tax on your salary apart from the National Insurance. But, as previous posters have explained, this does not mean he hasn't got any extra costs of employing you.
Does that make sense?
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