Taking on an employee - the tax reliefs
Taking on an employee might seem very daunting but there are some great tax reliefs which make it cheaper than you may have thought.
Let’s say you wanted to take on a junior and give them a salary of £19,200 a year which is £1,600 a month. This would work out on average as follows:
£1,334.38 would be paid to your employee
£153.18 would be paid in PAYE to HMRC
£112.44 would be paid in Employee’s National Insurance Contributions (NIC) to HMRC
£0.00 in Employer’s NIC due to the Employer’s NIC Allowance which means the first £2,500 of Employer’s NIC is not payable. Before the Employer’s NIC Allowance you would of had to pay £1,552.00 on a £19,200 annual salary
Total amount paid out each month = £1,600
However this would reduce your Corporation tax bill by £320 each month so the actual overall cost to your company is only £1,280.
As a member of CMJ Accountancy you can add members of staff to your payroll and we do not charge you any additional fees.