Planning for Your First Hire

Moving from a one-person show to having an employee is a huge step forward for your business capacity. However, you need to ensure your cash flow is strong enough to cover their wages, superannuation, and insurance before you put out the call. Taking on staff means you are no longer just responsible for your own output, but also for ensuring the business generates enough profit to pay a consistent weekly wage.

Before you start the hiring process, you need to be very clear about your business structure and payroll systems. You will need to register for PAYG withholding and ensure you have a system in place to handle Single Touch Payroll reporting for every pay cycle. Getting this wrong can lead to serious headaches with the ATO, so it pays to have a solid digital payroll setup running before your new hire starts their first day.

Consider the full cost of an employee beyond their hourly rate when you are adjusting your quote prices. When you factor in the 11% super guarantee, workers' compensation insurance, and the extra time spent managing their workflow, you might need to lift your margins. If your current jobs aren't priced to cover these overheads, you will find yourself working harder just to subsidize your employee's presence.

Finally, define the type of work your new hire will handle so you can maintain consistent service levels for your clients. By delegating the grunt work or specific tasks to a team member, you free yourself up to focus on business development and high-value project management. Start small, keep your payroll process automated, and make sure your internal bookkeeping is ready to handle the increased complexity.