THE HIDDEN COSTS OF EMPLOYING AN INTERNAL BOOKKEEPER
When employing an internal bookkeeper there are many hidden costs that are not always calculated in. We have provided an example below to ensure that the following areas have been taken into account.
LATEST BUSINESS NEWS
| Base Salary This is normally the base gross wage excluding ongoing costs like Superannuation. For this example, we will use a base of $25,000 (part-time). |
$ 25,000.00 |
| Superannuation Calculated on 9.5%, on a base of $25,000. |
$ 2,375.00 |
| Annual Leave Normally four weeks (pro-rata) per year, therefore the employee only works for 48 weeks of the year for $25,000. Include annual leave costs of 7.69% (4/52). |
$ 1,922.50 |
| Sick Leave Employee gets ten days (pro-rata) sick leave per year, so include sick leave cost of 3.85% (2/52). |
$ 962.50 |
| Workers Compensation Insurance As this is a varied percentage, depending on industry (some workplaces are as high of 15% of total annual wages), 5% is used as an example here. |
$ 1,250.00 |
| Payroll Tax Even though your business may not go over the threshold to be eligible for Payroll Tax (in Victoria, this is $550,000 per year), your business should still budget for expansion. For this example, a 4.85% rate for Victoria is used. |
$ 1,212.50 |
| Recruitment The average cost of recruiting an employee, including hiring expenses, down-time and training is $5,000. If your employee stays for 2 years, this equals $2,500 per year. |
$ 2,500.00 |
Therefore, the total cost of employing an internal bookkeeper (including their base gross wage): |
$ 35,222.50 (40% higher than the initial $25,000!) |