How much do employees actually cost?

Discussion in 'Business Operations' started by terracare, Feb 19, 2004.

  1. terracare

    terracare LawnSite Senior Member
    Posts: 353

    Partner and I have gotten to the point where there will be too much workload for just the two of us, so we are bringing in some help. We will be paying our first employee 8.00/hr. My question to everyone is how much will the employee actually cost me per hour over his 8.00/hr wage? I will be figuring workmens compensation outside of this. I would just like to know what percentage over that 8.00 will taxes be. I suppose I could be easier about it an assume that I will be paying him 10.00/hr for easy math :)

    Todd
     
  2. j fisher

    j fisher LawnSite Senior Member
    Posts: 296

    Figure 15% over his hourly wage.
     
  3. terracare

    terracare LawnSite Senior Member
    Posts: 353

    Ty for the reply. I was estimating about 17%

    Todd
     
  4. lrose2

    lrose2 LawnSite Member
    Posts: 165

    Todd,

    Besides the hourly rate, you will need to figure for workers compensation as you mentioned, plus the company share of social security, state unemployment and federal unemployment. Whatever the rates are for your area is what needs to be figured. Hope this helps out!
     
  5. MWHC

    MWHC LawnSite Member
    from Wyoming
    Posts: 202

    Don't forget to add in the extra abuse the equipment takes and the mental strain (On you) it takes to tolerate a lot of the bottom feeders that want to work for you.
     
  6. longslawn

    longslawn LawnSite Member
    Posts: 201

    I would estimate 30% probably closer to 26%
     
  7. ksland

    ksland LawnSite Senior Member
    Posts: 927

    how do you figure?:eek:
     
  8. thill

    thill LawnSite Member
    Posts: 245

    Terracare:

    Each state differs, based on state unemployment taxes and W/C insurance. I'll give you ours to see if it helps you calculate yours.

    FICA & FICA-M matching combined 7.65%
    Fed unemployment FUTA 00.8% of 1st 8,000
    TX unemployment SUTA 2.70% of 1st 9,000
    W/C insurance 9.41%

    Total 20.56%

    Our W/C is high since we are just over 2 years in the business. Once the loss history is established, this should go down.

    Hope this helps.

    Tom
     
  9. longslawn

    longslawn LawnSite Member
    Posts: 201

    Exactly as thill says plus any benefit cost.
     
  10. wojo23323

    wojo23323 LawnSite Senior Member
    Posts: 608

    i will be using a PEO this year for my pay and my employees. They charge me 16.87%. That includes workers comp.
     

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