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employee hiring cost forms

How Much Will Hiring an Employee Cost?

Hiring and onboarding an employee can be more expensive than what employers and new businesses realize; there are many expenses beyond an employee’s wages, including time-related expenditures.

Recruitment and Hiring 

Hiring takes time and money. Other employees and managers must screen candidates and review resumés, cover letters, and other materials before hiring. Job interviews also take time. Advertising an opening and hiring recruiters will incur costs.

Salary and Employee Wages

Employers must figure out a fair salary for a new hire that does not undercut an employee’s qualifications or offer overly generous pay. There are many questions and considerations behind salary negotiations and decisions, including: 

  • Will this employee be part-time or full-time? 
  • Will the employee be paid hourly or salaried? 
  • What is the rate that will be paid for any overtime (a minimum of 1.5x the standard hourly payment is required)? 
  • What kind of schedule will the employee be asked to work? 
  • How will holiday pay work? 
  • What kind of personal time off (PTO) will be available to the employee? 
  • Will PTO be paid out to the employee when they leave the job?

Training and Taxes

New employees must be trained. Many jobs require a separate training period where new employees dedicate all of their time to training. Training, therefore, costs a significant amount in terms of time and payment for employees who aren’t yet performing their actual roles. As described above, the government requires taxes to be paid by both an employee and employer. Both entities pay portions of certain taxes, increasing an employer’s expenses for holding employees.

hiring employee cost guide

 

While this guide outlines many important practices and requirements surrounding hiring and managing your first employee in Indiana, there are still many initial and ongoing steps to account for.

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