Money that you take from the business to cover your own personal living expenses is known as 'Drawings'. This should not be included here, but will be dealt with elsewhere in the cash flow.
Before you can make an estimate of the wages you will pay each month to your employees you will need to identify the work that must be done and how many people - if any - will be needed to do it.
You might need staff to:
- work in the gallery when you're not there - perhaps because you're working on your own art pieces
- provide any specialist services you decide to offer in-house such as picture framing
- hang pictures, put together displays and take responsibility for the appearance of the outlet
- answer the telephone and deal with mail order and internet sales
- keep the business records and do other administrative jobs
The wages you pay your staff will depend to some extent on what is the going rate in your area. The Annual Survey of Hours and Earnings (ASHE), which is carried out by the government, gives average weekly wages (national and regional) for a wide range of different types of job. The Survey is available online on the Office for National Statistics (ONS) website.
- you could use a combination of full and part-time staff - you might, for example, need someone to work at weekends. Part-time work is often attractive to students (art students may be particularly keen to work part-time in your gallery and could make very knowledgeable and enthusiastic employees)
- you may need extra temporary staff at certain times - for example during holiday periods if you're located in a busy tourist area
- the National Minimum Wage Act sets a minimum amount that you must pay your staff. Workers aged 25 and over receive a Living Wage premium on top of the standard National Minimum Wage
- there is employment legislation that you should be aware of
- you will have to pay employer's National Insurance Contributions (NICs) and you will have to operate PAYE in 'real time'. You may have to make employers' minimum contributions to an auto-enrolment pension scheme too
In the cash flow, just put the amounts you will actually pay to staff after you have deducted NICs and PAYE - you will show these separately. Include here the cost of staff pensions.