Health insurance costs
Question
How much does it cost to pay a employee?
Example pay someone 20 an hour. Employer has to match the income tax they pay, health insurance, cell phone, perks, vacation, unemployment insurance, payroll. What other hiddon costs are there in hiring someone? Should the emplyee expense be below 35% of revenue?
6 months ago - 1 answers
Best Answer
Chosen by Asker
Employers match the SS and Medicare. Also have to pay Unemployment (employees do not pay this, at least not in CA) and workman's comp insurance. Minimum for a rule of thumb is 15%. General rule is 25% (this accounts for insurance, payroll costs, vacations). If there is a 401k match or pension, will probably be at least 30% extra in costs. Other hidden costs are training. People are unproductive when they start. Depending on the job, this can last for months. As for the employee expense below 35% of revenue, this depends on the business. If it requires a lot of employees, then no, if a business runs more on inventory than service, then yes. 10% could be too high, it all just depends.
Source(s)
Own a business
by snpuck
6 months ago
Asker's Rating: 