I want to increase an employee's pay by £2,000 per annum from £23,000 to £25,000. That is an extra £166.67 per month gross = £113.33 net to him.
So how much does that cost me? Calculation from our book keeper:
Cost per month would be £2,083.33 plus Employers NIC £196.00 Total per month £2,279.33
Current cost per month is £1,916.66 + £173.01 = £2,089.67
Total cost per year £25,076.04
So, I spend £2,276 and employee gets £1,360. Employment tax = £916. Why does anyone bother?
