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.
If, like very many newsagents, you're planning to open for long hours seven days a week, you may decide that you'll need some employees to help you to:
- serve customers, work the cash till and sell lottery tickets
- make up newspaper deliveries
- deliver newspapers and collect payment
- monitor the newspaper and magazine displays and pack up the returns
- prepare customers' bills for home deliveries
- drive a delivery vehicle (if necessary)
- stock shelves, unload stores, price goods and generally help with a range of jobs
You may feel that you only need part-time staff to help cover the busiest periods.
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. Part-time work is often attractive to parents with children at school
- if you employ young people under the age of 18, they must be supervised to sell alcohol
- 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 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
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.