Do you own a business? Do you run a business? Then I recommend you follow me through this simple math and some reasonable conclusions.
Assume you have a person making a $50,000 gross salary. Assume their true cost — including health insurance, overhead, work space, computers, Internet, electric power, payroll taxes, etc. — is $80,000. That person costs your company about $40 per hour.
For that calculation, I divide the $80,000 by 49 to calculate the weekly cost of $1,633 (I take off two of the 52 weeks in a year for vacation and another for national holidays). I divide that weekly cost by 40 to get $40.82 per hour. And then for convenience I round that to $40 per hour.
So, with that hourly cost in mind, I’d ask myself these questions:
My conclusion: spend the money. Keep your technology up to date, encourage employees to get whatever books and magazines or website subscriptions help them, and combine meetings with meals a lot.
What do you think?
Comments
Hello, I just had a general question about business expenses.
As an incorporated business owner, what happens when my employees submit business expenses?
As a business owner am I liable for paying out the business expenses?
How does that work?
Sorry, this is a very simple question.
Jay, thanks for the question. I wish I had a simple answer. I’m not an attorney, though, so I’m really not qualified. What I’ve seen, from a non-attorney business owner point of view, is that these issues depend a lot on the exact circumstances. There’s no way to generalize. Tim
I am not yet very experienced person running a business, but all i can say is thats very a brilliant idea sir Tim, i’d experienced to become employee also and its very favorable for me having a lot of resources to make me become better person..happy and satisfied working in a company. that way, my loyalty is for my boss only.. In my own perception its not an Expenses its an Investments..
I always believe that employees are the backbone of the company..
[…] training the sales force as well as all other employees. However, headlines such as this one 3 Questions Business Owners Need to Ask About Employee Expenses to engaging in Google searches more often that not refer to salespersons and employees in general […]
Great read Tim:) and keeping our team leads’ technologies they use daily current is a huge money saver in our business @cazoomi