Average % of Gross that’s labor?

Discussion in 'Business Operations' started by littlenic, May 26, 2006.

  1. littlenic

    littlenic LawnSite Member
    Messages: 144

    Any idea what % of Gross that’s labor? I’m running around 30-32%

    I have a benchmark of 25% set. I came up with that based on other industries. I also have it setup that if the crew performs the task under the 25% mark, the get the difference up to the 25% as bonus. Minus any callbacks. This helps get it done quickly and done right the first time.

    Thanks, littlenic
  2. rodfather

    rodfather LawnSite Fanatic
    Messages: 9,501

    20.77 for payroll expenses and 6.61 for payroll taxes for 2005 says QB's.
  3. MMLawn

    MMLawn LawnSite Gold Member
    Messages: 3,569

    I think in the "real LCO world" if you have a lot of accts and quite a few employees that it will be hard to keep it under 30%.
  4. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Messages: 1,912

    Last year was about 41% of total gross .... BUT that is everything which follows my labor ..... all taxes, WC, holiday pay & bonus's ..... just hourly pay alone was just over 30%
  5. rodfather

    rodfather LawnSite Fanatic
    Messages: 9,501

    Analyze your pricing structure as well...a $40 lawn that increases to $45 or $50 (multiplied by the number of accounts you have) does wonders to your labor and payroll taxes expenses.

    So does competition. Highly competitive markets will have a higher labor percentage due to lower rates per se.
  6. grassmanvt

    grassmanvt LawnSite Senior Member
    Messages: 906

    I usually figure on about 1/3rd and hope to get real numbers at 30% or a little under.
  7. GlennZ

    GlennZ LawnSite Member
    Messages: 56

    I think the highest it should be is about 40%, but this includes all costs. Taxes, workers comp, unemployment, vacation, sick and anything else that you would not have to pay if the employee did not work for you. Plus as you grow you get foremans and managers, so that has a big impact on the number.
  8. T.E.

    T.E. LawnSite Senior Member
    Messages: 799

    20.12% for the year 2005.

    Later, Tony
  9. Precision

    Precision LawnSite Silver Member
    Messages: 2,995

    me too about 40-45% but hoping to lower that this season with some volume increase to offset the pay going to my bookkeeper.
  10. drmiller100

    drmiller100 LawnSite Senior Member
    Messages: 562

    65 percent, assuming i include my time.

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