For a micro accounting practice, spending £40,000 on a new employee is more than just a salary decision; it’s also a capacity decision. You need to know whether the workload is permanent enough to justify a full-time hire, or whether flexible support could cover the work with less fixed overhead.
Imagine that your client base is expanding rapidly and with it the bookkeeping backlog, approaching VAT deadlines, and year-end accounts. It’s means you need an extra pair of hands.
So, you start thinking about hiring.
You budget an employee will cost between £30,000 to £35,000. Then you start adding employer National Insurance, pension contributions, recruitment, software, equipment, training, holidays and management time. Suddenly, this decision is costing you more.
For a micro accounting practice, the real question is not simply, “Can I afford an employee?”
It is:
“Do I have enough predictable work to make the full cost of that employee worthwhile?”
Is Hiring Always The Right Answer When A Practice Is Busy?
No. If your accounting team is stretched, then it means you have demands, but that does not mean that you have consistent demand to support another permanent employee.
Consider two practices.
Practice A has a steady stream of bookkeeping, accounts preparation and VAT work throughout the year.
Practice B has a quiet spring and summer but becomes extremely busy around year-end and tax deadlines.
Both need another accountant.
But their capacity problem is different.
Practice A has a stronger case for permanent recruitment because the workload is consistent.
Practice B may need flexible accounting support because its biggest problem is seasonal capacity.
This is why hiring an accountant should be based on a workload analysis rather than following a busy week.
How Does A £30,000 Salary Become A £40,000 Employment Cost?
| Cost | Illustrative annual amount |
| Gross salary | £30,000 |
| Employer National Insurance* | £3,750 |
| Employer pension contribution | £600 |
| Recruitment & onboarding | £1,500 |
| Software, equipment & setup | £1,000 |
| Training & other employment costs | £1,150 |
| Approximate total | £38,000 |
You could then round this to around £40,000 to account for other employment-related costs and management time.
What Does A £40,000 Employee Actually Need to Generate?
This is where many micro firms need to think beyond salary. Suppose your total annual employment cost works out at approximately £40,000. That employee cannot realistically spend every working hour on chargeable client work.
There will be:
- Holiday
- Training
- Internal meetings
- Client administration
- Software issues
- Team communication
- Quality checks
- Non-chargeable research
- Unplanned interruptions
If only part of the employee’s available time is genuinely productive and chargeable, your practice needs enough recurring work to cover the cost and generate a reasonable return.
That means the question should become:
- How much additional gross profit can this person realistically generate?
Not:
- Can I pay their salary?
That is a much better hiring test.
What is the Real Cost of Adding Permanent Headcount?
A simple way to assess the decision is to separate the costs into four categories.
| Cost area | What to consider | Why it matters |
| Salary | Basic annual salary and any expected increases | The most visible cost, but not the only one |
| Employment costs | Employer NIC, pension and employment-related benefits | Adds to the real cost of employment |
| Operating costs | Software, equipment, recruitment and training | Often overlooked in the initial budget |
| Management capacity | Supervision, review and onboarding time | Particularly important in a micro practice |
From April 2026, the employer Class 1 National Insurance rate is 15% above the £5,000 secondary threshold for most employees. The National Living Wage is also £12.71 per hour for workers aged 21 and over.
Your actual cost will depend on the employee and your practice. That is why it is worth building a simple fully loaded employment cost before advertising the role.
Could Outsourcing Help?
For many micro accounting firms, outsourcing can provide an option between doing everything internally and hiring a permanent employee.
You can outsource specific work such as:
- Bookkeeping
- Bank reconciliations
- Transaction processing
- VAT support
- Accounts preparation
- Payroll
- Management accounts
You can retain client communication, review and professional judgement while an external team handles agreed production work. This approach can be particularly useful when the workload is real but unpredictable.
Equallto’s current model is designed around flexible support for small UK accounting practices, including pay-as-you-go accounting, bookkeeping and year-end support. Its published model allows practices to scale support according to workload rather than immediately committing to permanent headcount.
Comparison: In-house Hire Vs Flexible Accounting Support
| Factor | In-house hire | Flexible accounting support |
| Cost structure | Creates a recurring employment cost, even when workload falls | Cost can be linked more closely to the work actually required |
| Workload fit | Works best when demand is consistent throughout the year | Better suited to seasonal, fluctuating or uncertain workloads |
| Capacity | Adds dedicated internal capacity | Adds capacity without adding another permanent headcount |
| Recruitment | Requires advertising, interviews and onboarding | No permanent recruitment process |
| Management time | Requires supervision, training and performance management | Usually focused on task allocation, review and quality control |
| Quiet periods | The employee remains an ongoing fixed resource | Support can be adjusted as workload changes |
| Control | Work remains fully within the practice | Practice can retain client ownership, review and professional judgement |
| Best fit | Predictable, recurring workload | Variable, seasonal or growing workload that is still being tested |
How Should a Micro Firm Decide Between Hiring and Outsourcing?
Avoid the cheaper options; instead, look for what capacity you actually need. Then consider these five questions.
1. Is the Workload Permanent?
If the work is expected to continue throughout the year or multiple years, then permanent recruitment makes sense.
2. Is the Workload Predictable?
If the demand is rising and falling sharply, then outsourcing will be better than recruiting a new hire who will remain without any work for a considerable time.
3. How Much Partner Time Is Being Consumed?
If your accountants are spending too much time handling routine accounting tasks, then you must either outsource it or expand your in-house staff if the task is constant in nature.
4. What Skills Do You Actually Need?
Decide exactly what kind of skills you need. You might need bookkeeping support for 15 hours each week rather than another full-time accountant.
5. What Happens If the Workload Falls?
Consider whether your practice could comfortably carry the fixed employment cost during a quieter period.
The answer becomes much clearer when you put the numbers on paper.
Is Outsourcing Only About Reducing Costs?
No, accounting outsourcing cost is just a part of the decision; the bigger benefit of outsourcing is getting access to flexible capacity. Flexible support gives you an opportunity to handle the additional work first and assess the longer-term demand.
That can also allow your accounting team to spend more time on activities that generate revenue, such as client meetings, tax planning, advisory work and business development.
Equallto describes its pay-as-you-go model as allowing practices to pay for the support they use, increase capacity during peak periods and reduce support when workload falls.
What Should You Outsource First?
For a micro accounting practice, start with work that is repetitive, clearly defined and easy to review.
Good starting points can include:
- Bank reconciliations
- Routine bookkeeping
- Transaction processing
- VAT preparation
- Payroll processing
- Accounts preparation
- Catch-up bookkeeping
There is no hurry to hand over complex tasks like handling client relationships.
You can start with one process, one service line or a defined batch of work and see how it’s going. That makes it easier to establish quality expectations and measure whether the arrangement is genuinely creating capacity.
People Also Ask
Is £40,000 enough to hire an accountant in the UK?
£40,000 should be treated as an illustrative total employment budget rather than a standard accountant salary or hiring cost. The actual cost depends on salary, employer National Insurance, pension contributions, recruitment, benefits, software, equipment and other employment costs.
Should a small accounting practice hire or outsource?
It depends on the workload. Permanent recruitment can suit practices with predictable, year-round demand, while outsourcing can provide flexible capacity when workload is seasonal, uncertain or project-based. Comparing fully loaded employment costs with the amount of capacity actually required can help.
What accounting work can a micro practice outsource?
Common options include bookkeeping, bank reconciliations, transaction processing, VAT support, payroll, accounts preparation and management accounts support. A practice can outsource selected production tasks while retaining client relationships, review and professional judgement internally.
Is outsourcing cheaper than hiring an accountant?
There is no universal answer because costs depend on salary, employment overheads, workload, outsourcing scope and utilisation. A meaningful comparison should consider the full cost of employment rather than comparing an outsourcing fee only with an employee’s basic salary.
Can a micro accounting practice use outsourcing before hiring?
Yes. Flexible outsourcing can be used to handle additional workload while the practice measures whether the demand is consistent enough to justify permanent recruitment. It can also provide temporary capacity during tax season, year-end accounts, VAT deadlines or periods of unusually high client demand.
Conclusion
£40,000 might not be enough for hiring a full-time employee for your practice. Before you make that decision, you must take into account the capacity you need, the consistency of demand, and what that capacity needs to produce.
If your practice has predictable year-round demand, permanent recruitment may make sense. If the workload is seasonal, uncertain or project-based, flexible support can give you another route.
Get your workload measured, calculate the fully loaded cost of recruitment and test additional capacity before committing to another fixed overhead; for a micro practice, that can be the difference between growing with control and growing into a cost problem.
You do not need to decide between doing everything yourself and hiring a full-time employee overnight.
With Equallto’s flexible accounting support, you can add capacity for bookkeeping, accounts preparation, VAT, payroll and other recurring work based on your actual workload. The aim is simple: give your practice the extra hands it needs without forcing every growth decision into a permanent headcount commitment.
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