Would anyone be able to help - or possibly point me in the right direction for finding out? I can do the maths, it's knowing the percentages / rates etc of the various tax / NI etc over the course of a year that I need to take into account.
I am not an accountant or employer so I've almost certainly got things very wrong but this might cover the basic outline:
You need to give 5.6 weeks per year of holiday - for a full time employee on a five day week that works out at 4 weeks holiday plus 8 bank holidays (or 28 days holiday but work bank holidays)
So assuming 5 day a week employee 8 hours per day and assuming you pay them 15 per hour including for their holidays:
You will pay them 15*8*5*52=31200 per year. You don't need to worry about their tax/NI in the calculation etc as 31200 will be your total cost for this part, some you will pay to them and some to HMRC.
You will need to pay their auto enrolment pension. I think the minimum you have to pay if they don't opt out is 3%. Close enough to another 1000 for you.
Then you will have to pay employers NI. If I understand correctly you will pay 13.8% on everything over 8840, another 3085.
I'm probably missing something but that all comes to 35221.68.
Now the employee is actually working 8*(52-5.6)*5=1856 hours - so the effective hourly rate you are paying is 35221.68/1856 = 18.97 pounds per hour.
I think, but I'm not 100% sure, that if they work regular overtime then you need to include that in their holiday pay. I don't know about the 3% pension contribution but assuming that has to go up too:
Overtime per hour = 15*1.5*1.168*(52/46.4) = 29.45 effective hourly rate.
1.168 is 13.8% NI and 3% pension
52/46.4 allows for the money you'll have to pay them during their holidays.
(Effective hourly rate is the cost to you if you paid them per hour they worked but didn't pay them for holidays. Effectively what you have to do is "bank" the difference between what you actually pay them and the effective hourly rate so that you've got the money to pay them when they're not working.
I'm 99% sure you'll need to use a payroll provider (or possibly your accountant) to employ someone. There are very strict rules about how and when you have to report all this to HMRC and my gut feeling is that it isn't worth even trying to do it yourself unless you've got many employees and your own payroll department (if you read the various accounting websites you'll see constant queries about how HMRC has got it wrong and how to correct it - and this is from people who do payroll for a living!). I would guess that any reputable firm who might want your business if you do employ someone will generate some example scenarios for you so you can see what it will actually cost you, including their fee.
I would hope (but I don't know) that any reputable provider will also warn you about upcoming changes - for example the 3% pension stuff that is relatively new - otherwise you're going to have to keep on top of any and all legislative changes too.
One thing to consider too, I believe it's your legal obligation to ensure that your employees take their minimum (5.6 weeks) holiday per year. You cannot make payment in lieu of holiday unless they've already taken the legal minimum days.
Whatever you do, don't rely on anything in this post to make any decisions - Everything in this post is based on theory, not practice and I don't have the experience to be able to say "that can't be right" when looking at these numbers. I could be massively out in either direction (either because I've missed something, misunderstood something, or made a silly mathematical error) and I wouldn't be able to tell.