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View Full Version : What % of gross revenues are your wages to employees and self


Flex-Deck
09-24-2010, 09:21 PM
I may be a bit nieve, but I have an operation that grosses 125,000, and at the end of the year, my wages paid = 47,000 - of which 28,000 of that goes to my wife and I. We have an S corp, and take the profit from the corp in distributions which are taxed on our personal return. (approx 30000). It seems that when the other (2) employees go on a route, they take a bit longer, and their wages seem to push the 40% of gross numbers. I am thinking of a wage + bonus based on wages should run around 35% of gross.

Flex-Deck
09-24-2010, 09:37 PM
This thread is not about superficial stupid crap as to wheather a shidu is better than a stiel, or whatever, this is about the life blood of an operation. Are you guy unaware of your costs, or are you embarrassed about something???

Daily Lawn/Landscape
09-24-2010, 09:44 PM
You have not gotten a response in 17 minutes so you go off the wall. Give it some time or call a local business owner and buy him a lunch and throw it by him.

James

Daily Lawn/Landscape
09-24-2010, 09:48 PM
I may be a bit nieve, but I have an operation that grosses 125,000, and at the end of the year, my wages paid = 47,000 - of which 28,000 of that goes to my wife and I. We have an S corp, and take the profit from the corp in distributions which are taxed on our personal return. (approx 30000). It seems that when the other (2) employees go on a route, they take a bit longer, and their wages seem to push the 40% of gross numbers. I am thinking of a wage + bonus based on wages should run around 35% of gross.

I think you will find a range from 30- 45% depending on the company. I can tell you I'm on the higher end because I pay my guys really well, because I can't afford to continue to train new people.

There's my 2 cnt.

James

Flex-Deck
09-24-2010, 10:10 PM
I think you will find a range from 30- 45% depending on the company. I can tell you I'm on the higher end because I pay my guys really well, because I can't afford to continue to train new people.

There's my 2 cnt.

James

Thanks for your input James - Sometimes we spend our life wondering. Here we can just lay it out and know .

cpel2004
09-24-2010, 10:15 PM
Up to 60% if you take out the proper taxes!

Flex-Deck
09-24-2010, 10:25 PM
Up to 60% if you take out the proper taxes!

I absolutely take out the taxes, do the WC insurance etc. I do not offer a retirement program and probably will not do it since i look for retirees that need something to do to fill any mowing positions. Thanks, Brad

JCLawn and more
09-24-2010, 10:56 PM
I absolutely take out the taxes, do the WC insurance etc. I do not offer a retirement program and probably will not do it since i look for retirees that need something to do to fill any mowing positions. Thanks, Brad

is taxes basically as much per hour as the employee? I have not had to get into this yet.

cpel2004
09-24-2010, 11:03 PM
Not only taxes but Workmans Comp also. At least here in Florida, 3 or more employees and you have to have it!

jbannick18
09-24-2010, 11:21 PM
Not only taxes but Workmans Comp also. At least here in Florida, 3 or more employees and you have to have it!

Atleast if it is 3 or less you don't :p. I'm solo right now but plan on hiring someone part time next year and I look forward to not having WC, of course going through proper documentation to get it excluded. I helped out a company who was only the owner, and 2 employees including me during the summer and he was paying $650/month just for WC.

cpel2004
09-24-2010, 11:50 PM
Atleast if it is 3 or less you don't :p. I'm solo right now but plan on hiring someone part time next year and I look forward to not having WC, of course going through proper documentation to get it excluded. I helped out a company who was only the owner, and 2 employees including me during the summer and he was paying $650/month just for WC.


Yes, the best bet is, to get it through a payroll company.

seabee24
09-25-2010, 01:02 AM
Up to 60% if you take out the proper taxes!

I think your either over paying your guys or not charging enough per hour. At only a 40% , that's hardly worth being in business
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mbrew
09-25-2010, 11:59 AM
Numbers of up to 60% including workmans comp, unemployment, taxes etc wouldn't surprise me. That's what I've run in other industries. I know a guy here with a high volume 3 truck operation and his manning costs run 57% total.

I operate with just my wife and I, but I just looked at my numbers and we'll take 56% of the gross this month with us doing all of the work. We do have some work to do on expense control and productivity.

According to your numbers, you're getting about 46% of your gross. I don't think you'll do much better while running employees.

mbrew
09-25-2010, 12:16 PM
is taxes basically as much per hour as the employee? I have not had to get into this yet.

When you have an employee, you must withhold taxes from them for a couple of different things the first of which is income tax. You are deducting a part of their pay from their paycheck which you will then send to the federal Govt. on their behalf. I'm going to lump social security and medicare together, but they are really different things. You also have to deduct about 8.5% of THEIR money from their check to cover SS and MC. In addition, you must pay an additional 8.5% to the government from your money to cover these expenses. I don't know what you have in the way of state taxes. In Texas there's no withholding for that. There could be where you live.

So far for every dollar we've given the employee, we paid out another 8.5 cents but there's more. Almost every state will have you buy unemployment insurance on that employee and there's also workman's comp insurance. In some states, you aren't required to carry workman's comp, but if the employee is hurt its your problem. A fair sized cut in a hand can easily cost $600.00 to have stitched up. Even if I don't offer benefits like vacation, medical insurance etc to the employee, I figure it will cost me at least another 15 cents for every dollar I pay him and it could be as high as 25 cents. If you have employees drive your trucks, your insurance is going to go up too.

cpel2004
09-25-2010, 01:28 PM
I think your either over paying your guys or not charging enough per hour. At only a 40% , that's hardly worth being in business
Posted via Mobile Device


We get around 35 to 40 per house for a 2500 to 4000 sq lot. Not including shrub trimming. These numbers are a percentage of income, so it doesn't matter how much you make. Up to 20-25 percent of your gross in just taxes and insurance depending on your state etc. So now you do the math!

lunk71
09-25-2010, 01:51 PM
go with a John Deere

seabee24
09-25-2010, 02:39 PM
60% towards employee So given your $40 per house example which I think is fair. That means that 24 dollars goes to the guys, you keep 16

Now 16 profit per account average, has to pay for fuel, equiptment, taxes and all other expenses... Where is the profit?

Average crew of 3 guys can mow 20-30 houses a day, depending on factors. So 25 houses at 16 equals 400 per day.

After the 7 gallons of fuel on the equiptment, and 10 gallons in the truck, oil, your left with 310 bucks, now subtract equiptment depretation at $4 per hour, your below 300, those are just the direct expenses associated with that account... Maintenance cost, trucks, trailers, insurance, shop/office. You would be better working for someone else

60%is high, doesn't matter where your from. Either your over paying guys, not charging enough, taking too long on jobs, or have to much "non billable " time...something is wrong
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mbrew
09-25-2010, 05:03 PM
60% towards employee So given your $40 per house example which I think is fair. That means that 24 dollars goes to the guys, you keep 16

Now 16 profit per account average, has to pay for fuel, equiptment, taxes and all other expenses... Where is the profit?

Average crew of 3 guys can mow 20-30 houses a day, depending on factors. So 25 houses at 16 equals 400 per day.

After the 7 gallons of fuel on the equiptment, and 10 gallons in the truck, oil, your left with 310 bucks, now subtract equiptment depretation at $4 per hour, your below 300, those are just the direct expenses associated with that account... Maintenance cost, trucks, trailers, insurance, shop/office. You would be better working for someone else

60%is high, doesn't matter where your from. Either your over paying guys, not charging enough, taking too long on jobs, or have to much "non billable " time...something is wrong
Posted via Mobile Device

Most service business are low margin. 200 a day for truck that I'm not working on doesn't sound bad to me. The guy I mentioned above has three trucks. 200 a day to run credit cards and answer the phone isn't bad. He has it easy with estimates too. Every yard is 25.00

Just out of curiosity what are your numbers and what part of the country are you in?

TMlawncare
09-25-2010, 05:29 PM
I ran my numbers and found that payroll/payroll taxes account for around 38% of gross.

JCLawn and more
09-25-2010, 11:16 PM
When you have an employee, you must withhold taxes from them for a couple of different things the first of which is income tax. You are deducting a part of their pay from their paycheck which you will then send to the federal Govt. on their behalf. I'm going to lump social security and medicare together, but they are really different things. You also have to deduct about 8.5% of THEIR money from their check to cover SS and MC. In addition, you must pay an additional 8.5% to the government from your money to cover these expenses. I don't know what you have in the way of state taxes. In Texas there's no withholding for that. There could be where you live.

So far for every dollar we've given the employee, we paid out another 8.5 cents but there's more. Almost every state will have you buy unemployment insurance on that employee and there's also workman's comp insurance. In some states, you aren't required to carry workman's comp, but if the employee is hurt its your problem. A fair sized cut in a hand can easily cost $600.00 to have stitched up. Even if I don't offer benefits like vacation, medical insurance etc to the employee, I figure it will cost me at least another 15 cents for every dollar I pay him and it could be as high as 25 cents. If you have employees drive your trucks, your insurance is going to go up too.

I am figuring its about a third for me with not paying any taxes on a guy.

cpel2004
09-26-2010, 12:22 AM
I ran my numbers and found that payroll/payroll taxes account for around 38% of gross.


Now add in Workmans Comp and Unemployment ins...what are your numbers now?

cpel2004
09-26-2010, 12:31 AM
Seebee are you paying workmans comp and unemployment ins and coming in some where in the 30's % range. Shall we take a look at your numbers?

seabee24
09-26-2010, 12:13 PM
Workmans comp insurance taxes will only run max50% of that guys labor. Pay him 10 it costs you 15 max. So if your paying him 12 max he costs you is 18 and i'd bet it's cheeper than that. I charge over 40 per hour, and while mowing bring in over 50 per man hour. So you do the math.

You wonder why your friend is around 60%. It's his 25 dollar lawn jobs.

200 per day? Are you kidding that your happy with that.....there were so many more expenses that we didn't even cover, you would be lucky to profit 100 per day. Then tax that, your left with 80 bucks... I know why this industry is so screwed up, no one knows how to calculate numbers, and the real cost to be in business. At 200 per day you still would be better to go work for someone, at least you would have steady income, with no liability,

I simply will not start a true k for less than 500 profit per day, it's just not worth it
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mbrew
09-26-2010, 01:36 PM
It's interesting and telling that only TMILawncare and Flex-Deck have posted an exact percentage. Every guy on this forum should be able to post his numbers with only a couple of minutes needed to check his accounting program.

There is also another bit of information that is important to interpreting these numbers, and that's whether the owner is working on a truck and the number of trucks he runs. If the owner is not on a truck his payroll percentage would likely be higher than an owner that still cuts.

seabee24
09-26-2010, 02:00 PM
Not every person wants to post his numbers on an open forum, not all your competitors are dumb, and some can do reverse math.

Good point about the owner on the truck. That could change your labor percentage by 25% altho I try to enourage ever person even the owner to do enough work (even office work is billable) to make money
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eaglescout1993
01-30-2011, 01:09 PM
hay flex, where do you order your decks from? i can not find a website if you could post a link that would be GREAT