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looking for more experienced advice

Discussion in 'Lawn Mowing' started by atproperty, Jan 24, 2005.

  1. atproperty

    atproperty LawnSite Member
    Posts: 62

    I originally posted this question in the elements of business section. I got 2 helpful post but non the less only 2. I am trying my luck in this larger forum.
    Here it is..................

    This is my first years with employees on the books. Believe it or not I am starting out with 6 of them if all contracts are signed as expected.

    My budget calls for one foreman at $28,000 per year and 5 workers at approx. $22,000. $138,000 in salaries.

    I have done some research on what my additional cost will be per employee. I come up with matching ss and medicare (FICA), FUTA for unemployment, and workers comp.

    Using my foreman as an example this is what I come up with.........
    $520 awk X .062=$32.24 ss, $520 X .0145=$7.54medicare. I guess these I have to match. $520 x 6.62%=approx. $35 comp out of my pocket. From what I gather unemployment contribution is taxed by .062 X the first $7000 for each employee annually.

    On this type of basis I come up with a yearly budget of at least $22,161 to cover FICA, FUTA, COMP for all employees.

    Can anyone tell me if I am on the right track or if there is anything I am missing or advice. Although my company is very quality oriented and I have a decent business sense, I am still a rookie walking into some large responsibilities. I could use all the help I can get and some real life figures from you lawn site pros would help.
  2. naturescaretaker

    naturescaretaker LawnSite Senior Member
    Posts: 851

    A general rule of thumb is to add 37% to what you are paying for labor. However, that is only a general rule. You still need to work out your exact costs.
  3. atproperty

    atproperty LawnSite Member
    Posts: 62

    Well that was quick I just posted this question. Thanks for the 37% rule. I had never heard that. Keep it coming guys. I am thirsty for knowledge.

  4. Likestomow

    Likestomow LawnSite Senior Member
    Posts: 997

    Wow - 37% seems a bit high, maybe others can comment on this.

    I run my workers through a local employment agency who charges me 20.4%. That was up from last year, and I suppose it will be a bit higher this year, but all I do is call and give them the times and they do the rest. This way I don't have to buy a WC policy and pay up front, only for the hours I use. If you want to try this, I suggest that you shop around because I got quotes as high as 40% from some of the temp agencies.

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