Answering a quick question from a client highlights a structural fault in our economy.
The cost of employing someone on National Minimum Wage for 18 hours per week in 2011/12 tax year will be £107. No tax or National Insurance (NI) needs to be deducted and there is no employers NI to pay.
If you wanted that same employee to work an additional 18 hours and reward the employee with the same net pay as the first 18 hours, the cost to you as an employer would be £158 (48% more).
Is it any wonder that our major retailers are offering low-hours contracts?
The structure of taxation of employees (exacerbated by the recent increase in NI) seems to driving us to become a nation of part-time shop-workers.