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.
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 will be needed to do it.
You'll probably need both front of house and kitchen staff to:
- serve customers, both at table and in the bar area
- prepare and cook meals. Bear in mind that you may need a head chef, a dim sum chef and a roasting chef in a busy restaurant
- handle any take-away orders, take bookings
- prepare bills, receive and check takings
- unload stores, keep storage areas clean and generally help with a range of jobs
You will need experienced and skilled chefs and these can be hard to find.
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.
Some Chinese restaurant proprietors offer staff both accommodation and meals.
- you could use a combination of full and part-time staff
- the National Minimum Wage Act sets a minimum amount that you must pay your staff. It is against the law to use tips and service charges to make up staff wages to the level of the National Minimum Wage. Note that members of your family who you employ in the business do not have to be paid the minimum wage if they live in your family home. Workers aged 25 and over receive a Living Wage premium on top of the standard National Minimum Wage
- there is 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
- employers face substantial fines if they employ illegal workers
- staff in food businesses should, where necessary, be trained in food safety and hygiene practice
Immigration legislation applies to workers coming to the UK from outside the EU and requires employers to make appropriate checks to make sure they are permitted to work in the UK.
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.