Entrepreneurs sometimes hire based only on whether they can afford the advertised salary. The better question is what the employee will cost the business in total, since the true cost of employment is almost always higher than the payslip figure.
Frequently Asked Questions
Is salary the same as total employment cost?
No.
Why should businesses calculate the full employment cost?
It helps determine whether hiring someone is financially sustainable.
Can an employee's tools and equipment form part of employment cost?
Yes — these can be legitimate business costs associated with employing someone.