When you own a business that employs personnel, it is necessary to incorporate a personnel budget into your business plan to ensure you have enough income to pay your employees on a regular basis. A personnel budget enables you to keep track of your employee-related expenditures.
Work the personnel budget into your business plan. Develop a spreadsheet that contains expense-related information and be sure to include all employee-related expenses, including salary and bonuses.
Be sure to budget in payroll taxes that you will have to pay for your employees. Payroll taxes can run anywhere from 7 to 20 percent and can increase the personnel budget significantly.
If employees are paid by commission, that should be factored into the sales that are made by the business. In addition, be sure to subtract this amount from overall profits to get an idea of actual cost-to-profit ratio.
Insurance costs should be factored into the personnel budget as well. You will have to decide if you want basic business owners insurance, or if you will be offering your personnel additional insurance coverage. Factor in worker's compensation insurance into your personnel budget plan as well. How much you pay for worker's compensation is dependent on the employees and their specific categorization within the business.
Retirement plan and 401k costs are a part of a good personnel plan as well. SEP retirement plans are tax deductible, but still have some associated costs that should be factored into a personnel budget plan.
Hire an accountant and financial adviser, if possible, to ensure you have covered all areas necessary in your personnel budget plan. This will protect both you and your employees from any problems related to a budget shortfall due to miscalculation.
Robin McDaniel is a writer, educator and musician. She holds a master's degree in higher educational leadership from Florida Atlantic University in Boca Raton as well as a bachelor's degree in elementary education. She is pursuing a Ph.D. in adult in community education. McDaniel enjoys writing, blogging, web design, singing and playing bass guitar.