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    1 Reply Latest reply on Sep 17, 2009 8:30 PM by

    Employee worth?

    huskygirl Newbie
      Hi there. I work for a small retail business.
      I'm wondering how much money we would have to bring in yearly to pay for a new employee?

      So say we pay our new employee $40,000/year... what $$$ sales would we have to generate that year to have that person paid for, with everything on top profit?

      I know this is a basic question and feel dumb that I don't know the answer, so hopefully someone can answer me!

      Thanks very much.
        • Re: Employee worth?
          Wow -- that really depends on what your margins are and even some on what your other overhead is and lastly on benefits/payroll costs (worker's comp and health insurance and unemployment insurance and retirement paid by company (if any).

          If 40K is the is base salary you got to add the payroll taxes and benefits to know your full cost.

          Then you have to look at the average profit on the items you are selling. To be more accurate you would have to look at profite specifically for the items this person would sell the most (if it is different from the store as a whole).

          Then you might want to factor in the overhead of the store (rent, advertising, other costs). Depends on how you are looking at it. If you want to know if the company as a whole will make money you have to factor this in. In a more abtract sense, you don't have to factor these in if you only want to know what that person is contributing to the overall "shared" expenses (or with any luck - profits).