This document provides a breakdown of the typical costs associated with hiring and employing an individual in the UK. It estimates the total annual cost to be around £60,374, including salary, benefits, national insurance contributions, training, equipment, and overhead allocations. Several optional and mandatory costs are listed, from recruitment fees and pension contributions to potential expenses like maternity leave, unfair dismissal claims, and sick pay. The document also calculates the number of productive working days in a year after accounting for holidays, training time, sick leave, and other wasted time.

1. Item Cost (£) Running total
(£)
Notes
Recruitment and salary
Salary £32,000.00 £32,000.00 1
Recruitment fee or advertising/selection costs £3,200.00 £35,200.00 2
Class 1 NICs (13.8% on earnings above Earnings
Threshold [£100 a week=£5200 a year])
£3,698.40 £38,898.40 3
Typical optional benefits
Company car £3,800.00 £42,698.40 4
Gym £300.00 £42,998.40
Health care £1,000.00 £43,998.40 5
Life assurance £100.00 £44,098.40
Pension £1,000.00 £45,098.40
Bonus £0.00 £45,098.40
Subtotal for NICs calculation £2,400.00
Class 1A NICs (P111D) £331.20 £45,429.60 6
Employee-specific costs
Software licences £1,200.00 £46,629.60 7
Training, CPD £1,200.00 £47,829.60 8
Workstation £9,041.00 £56,870.60 9
Apportionment of cost of business
Share of other overheads (buildings excluding
workstation areas, insurances [death-in-service, key
worker, public liability, employer's liability], …)
£1,000.00 £57,870.60 10
Depreciation on capital equipment (PC, desk, chair,
filing cabinet etc)
£0.00 £57,870.60 11
Consumables (paper, toner, coffee, toilet paper) £100.00 £57,970.60 12
Administrative overheads (non-project
administration, HR, payroll, secretarial).
£2,404.00 £60,374.60 13
Other financial and disruptive costs
Maternity/paternity leave 0 £60,374.60 14
Unfair dismissal claims 0 £60,374.60 14
Redundancy 0 £60,374.60 14
Jury service 0 £60,374.60 14
Sick leave holiday pay 0 £60,374.60 14a
Productive working days Days Running total Notes
Weekdays in a year 261 261.0 15
Holidays (25+8) 32 229.0 16
Formal training 5 224.0 17
CPD, reading, learning, self-directed training 4 220.0 18
Sick days 8.4 211.6 19
Wasted/unproductive time 42 169.3 20
Cost per day (=total costs/working days) £357
Document updated: February 2014