How many staff will you need to employ in your first 6 months/ year?

How many staff will you need to employ in your first 6 months/ year?

The price of people

If you are considering employing staff on a Pay as You Earn basis (PAYE) bear in mind that you will be taking on a whole host of responsibilities. Generally, as a rule, you can estimate the cost of employing a member of staff by taking their salary and doubling it! This accounts for holiday pay, sick pay, Bank Holidays, Christmas, National Insurance Contributions, accountancy fees etc. 

Stakeholder Pensions

Stakeholder pensions were introduced 06/01/2001. At present these new regulations only affect businesses which employ 5 members of staff or more.

Employers Liability Insurance

Once one employee is taken on it is required by law that the company takes out Employers Liability Insurance. The prescribed legal minimum is currently [2001] £10m of cover against bodily injury, illness or disease sustained in the course of employment.
This class of insurance is often packaged with Public Liability Insurance.
All the big insurance companies can offer this cover.


This is one way to alleviate most of the responsibilities of an employer, but there are still some legal responsibilities to be aware of. IR35 legislation has recently caused an impact on this area of employment / self- employment.

Whether you are a contractor or if you are starting a Personal Service Company (PSC), it is wise to find out how it could affect you. 

More information

An accountant or lawyer will be able to give you more detailed advice regarding employment.

Stakeholder pensions FAQ’ for employers
Inland Revenue FAQ’s on new IR35 legislation.
Advisory, Conciliation and Arbitration Service (ACAS)
Human Rights & Equality
Disability Discrimination Act (DDA)
Equal Opportunities Commission
National Minimum Wage
New Deal
Time Off for Study or Training
Working Time Regulations