A guide to third sector trading - WCVA

It’s an idea, but is it business? A guide to third sector trading
Appendix 1 Appendix 2 Appendix 3
Additional items:
• If you provide a sick pay scheme you may need to incorporate
the extra annual costs of paying other staff to cover your
sickness and other absences.
• A combination of full time and part time care staff and staff on
different rates (eg special rates for unsocial hours) may further
complicate the calculation: you would need to take an average
across all types of staff, or, better, calculate separate hourly rates
for each class of worker and include them all under “variable
direct costs” when you calculate the total cost of the project
(see paragraph 8 below).
• The “real hourly rate” may also include variables such as any
travel expenses paid to staff.
8. Example of calculating total costs for the cost centre:
The following example illustrates how the total costs of a project
are calculated for a given level of service – the annual cost of 100
hours of care per week for care assistants paid £10/hour. The list
of expenditure headings is not exhaustive.
start up costs
computer, printer and software etc £1,500
indirect fixed costs (share of organisation’s total costs)
25% of Manager’s salary & NI £6,000
50% of Administrator’s salary & NI £6,000
33% of organisation’s rent £1,500
33% of rates £300
33% of power £600
33% of insurance £200
50% of accountancy and bank costs £500
33% of advertising costs £500
33% of repairs and renewals £200
£15,800
direct fixed costs:
stationery and postage £800
telephone (separate line) £1,000
£1,800
direct variable costs (see paragraph 7):
100 care hours per week for 50 weeks
at £12.79/hr £63,950
total costs £83,050
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