Employing a Trainee - accessing the government incentives to employ trainees

“Can I afford to put on a new trainee and put him in the van?”
Great question from a client yesterday, wanting to access the Government subsidy for Trainees.
The answer to the question is quite straightforward, but it's best to break it into 3 steps.
(What follows is a summary of our call).

1. Determine the costs of the new employee.
How much will he cost?
He’ll be on $24 p hr, on a 38 hr week.
That’s $912 per week.
Which is $47,400 per year.
You need to add Super and Workers Comp, so that becomes $53,000.
BUT, you can take off the Government’s Trainee Subsidy, of $28,000 ($7,000 per quarter).
So, the actual cost to you is $25,000.

2. Calculate the sales needed to cover these costs.
Your GP is 30%.
So, divide this extra cost by 30%.
This equals = $83,335 in a year ($25,000/30%).
Which is $6,945 per month.

3. Determine how many sales transactions you now need to make.
Your average sale is $355.
So, that’s basically 20 extra sales per month ($6,945/355).
With 4 weeks per month, that’s 5 sales per week.
With 5 days per week, that’s one sale per day.
So, to make this work, your new guy needs to make one sale per day.
Does that sound achievable?
What do you need to do to make sure this happens?

This government incentive is a great way to get trainees on board, so it might be worth looking at ways to get them involved.

Let me know if you need a hand with this.

Peter