 Home
 Forum
 Accounting
 I would like to know what an hourly rate works out costing the business?For example: based on a 40 hour weekThe employees wage is $25 per hour > + 8% holiday pay, + 4.6% statutary holidays (11 days / 240 working days = 4.6%), + 5% bereavement, sick,domestic violance leave. + 2% ACC+ 3% kiwisaver,$25 * 1.08 = $27 > *1.046 = $28.24 > *1.05 = $29.65 > *1.03 = $30.54 > x 1.02 = $31.15Am I on the right track here? WHat I have worked out that every hour actually worked cost the business $31.15 (based on a $25 an hour contract). Have I included everything?Is it an easy calculation just to do the hourly wage times 1.246? Many thanks
 Reply To: I would like to know what an hourly rate works out costing the business?For example: based on a 40 hour weekThe employees wage is $25 per hour > + 8% holiday pay, + 4.6% statutary holidays (11 days / 240 working days = 4.6%), + 5% bereavement, sick,domestic violance leave. + 2% ACC+ 3% kiwisaver,$25 * 1.08 = $27 > *1.046 = $28.24 > *1.05 = $29.65 > *1.03 = $30.54 > x 1.02 = $31.15Am I on the right track here? WHat I have worked out that every hour actually worked cost the business $31.15 (based on a $25 an hour contract). Have I included everything?Is it an easy calculation just to do the hourly wage times 1.246? Many thanks

Julian So
Business Owner
@julianso
Reply submitted 13/05/21 @ 06:53pm
::There are many various different ways to calculate the true costs of the hourly costs. Here is the approach that I usually like to illustrate based on $25 @ 40 hours per week
Annual Salary ($25 x 40 x 52) $52,000
Kiwisaver 3% $1,560
ACC (depending on industry) say 2% $1,040
Other staff costs (these are estimates and need to be based on your business)
– Cellphone $1,200
– Training courses $1,000
– Uniform $500
– Other staff benefits $500TOTAL SALARY + BENEFITS $57,800
Then divided that by the number of working weeks which is 52 – 4 (annual leave) – 2.2 (stats) – 1 (sick) – 1 (other leave) – 1 (estimate annual training) = 42.8 weeks
So costs for an average working week is $1,350. Of 40 hours per week, not all of them are always productive as there are internal admin, non chargeable time, travel time etc. So assume an employee is 80% (obviously you should use the % based on the past experience with your staff) productive per working week, then he/she will be productive for 32 hours per week.
So the true hourly costs for each productive hour is $1350/32 = $42.2.
