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 how many staff you will need. Contact your registering authority to find our what the minimum staffing ratios are for the size and type of home that you intend to open. For example, a nursing home must normally have at least one first level nurse on duty at all times.
To make an estimate of the amount of wages you will pay each month, you will need to identify the work that must be done and how many people will be needed to do it. First decide what jobs if any you, and possibly a business partner or family member, are qualified and prepared to do. Then think about the things that you might need to employ staff to do, for example:
- care work
- nursing work, including general and possibly specialist nursing
- other therapeutic work
- food preparation and cooking
- serving meals
- answering the telephone and dealing with secretarial and administrative tasks
- other work, for example tending the grounds and general maintenance
The wages you pay your staff will depend to some extent on what is the going rate in your area. Nurses' wages will reflect their grade and experience and will normally be close to what is paid by the NHS. However, at times when qualified nursing staff are in short supply you may have to offer higher wages in order to attract and maintain quality staff. 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.
Decide whether you will provide free accommodation to some staff members as part of their wages (when an overnight stay forms part of an employee's duties this would normally be provided free of charge). Don't forget:
- the statutory minimum standards may require that a certain percentage of care staff hold a recognised qualification. Staff qualification requirements can be very specific, and in any case it's important that your care staff are properly trained
- part time workers may be suitable for some jobs
- the National Minimum Wage Act sets a minimum amount that you must pay your staff, even part time workers. 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
- as a care home business, you are required by law to keep detailed records of all of your nursing and care workers
- your care staff are required by law to undergo a background check by the Disclosure and Barring Service (DBS) to make sure they are suitable for working with vulnerable people
- social care workers and managers in care homes in Northern Ireland must be registered with the Northern Ireland Social Care Council (NISCC)
Care work involves looking after very vulnerable people and requires certain qualities, such as patience, understanding and empathy. You should make every effort to ensure that the care staff you employ have the right personality and qualities for working in a care situation and can be trusted to safeguard the well-being of your residents at all times. This could involve paying a little more than the going rate to attract higher calibre employees.
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.