Industry sector:

Fencing contractor: Wages

Money which 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.

Decide first whether your business will need any employees. If you just intend to undertake small domestic contracts then you may be able to work alone, but you will probably need more manpower if you want to take on larger commercial jobs. Some types of fencing work are much easier with two people working than with just one. Think about the size of business that you want to run. Perhaps you aim to start off small and build up gradually.

Before you can make an estimate of how much you will pay in wages each month, you will need to identify the work that must be done and how many people will be needed to do it.

Employees' duties

You might need employees to:

  • survey sites, measure up and produce fencing designs and drawings
  • carry out various different aspects of fencing work, including fabrication and erection
  • operate plant and machinery and do jobs like site preparation and excavation
  • do basic labouring work
  • drive your business vehicles
  • answer the telephone and attend to administrative tasks

The wages you pay your employees will depend on their level of experience, and also 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.

Don't forget:

  • you could use a combination of part time and full time workers
  • you could take on and train young workers as apprentices
  • your employees - including any part-time staff - must be properly trained in matters like safe use of machinery and equipment and working safely near to moving traffic
  • 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 other employment legislation which 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
  • special rules apply within the construction industries for paying sub-contractors. More information is available on the HMRC section of the website

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.