The True Cost of Hiring an Employee vs. Hiring a Virtual Assistant

Hiring your first employee is a significant milestone, but it comes with considerable costs and responsibilities. Many business owners don’t realise the full financial commitment involved in taking on staff, and in some cases, outsourcing to a Virtual Assistant (VA) can be a more cost-effective and flexible solution.

When hiring an employee, you’re responsible for much more than just their salary. There are fixed costs that all employers must cover, including:

1. Salary & Contributions

Gross salary: £22,308 per year (based on £11.44 per hour, full-time at 37.5 hours per week)

Employer’s National Insurance Contributions (NICs): £1,822

Pension Contributions: £482

Total approximate annual cost: £24,612

2. Additional Hidden Costs

Beyond the basics, there are extra expenses that quickly add up:

Recruitment: Whether through job boards or recruitment agencies (which charge 20-30% of the employee’s salary)

Equipment & software: Laptops, desks, specialist tools, or software subscriptions

Payroll administration: Running an RTI-compliant payroll system

Employee entitlements:

Holiday pay (nearly six weeks of salary per year)

Sick pay (£99.35 per week for up to 28 weeks)

Maternity/Paternity leave (up to 52 weeks)

These costs make hiring a major financial commitment—one that may not be feasible for every business, especially small or growing ones.

For businesses that need flexibility, scalability, and cost-efficiency, a Virtual Assistant (VA) is a smart alternative. Instead of hiring a full-time employee, you can outsource essential tasks to a skilled professional at a fraction of the cost.

Why a VA Might Be a Better Choice

✅ Lower costs: Prices start at just £250 per month—a fraction of the cost of an employee. ✅ No employer responsibilities: No tax, pensions, or NI contributions to pay. ✅ Flexible support: Only pay for the hours or services you need, without a long-term commitment. ✅ Access to specialists: Get expert help in areas like bookkeeping, social media, inbox management, and customer support. ✅ Immediate impact: No lengthy hiring process—get the support you need straight away.

Employee vs. VA – What’s Right for Your Business?

If your business requires consistent, full-time support and you’re ready for the financial commitment, hiring an employee could be the right step. However, if you need affordable, flexible support without the additional costs and admin, a Virtual Assistant is a smarter solution.