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Employee Bonuses & Wages

Discussion in 'Business Operations' started by CK82, Nov 20, 2008.

  1. CK82

    CK82 LawnSite Member
    Messages: 235

    We do some hardscaping, lawn maintenance, and snow removal. I want to make my guys happy and feeling appreciated. I currently pay one of my employees $10.75 and the other $16.00 with partial health benefits. My $10.75 guy I am going to be giving at least a $2-$3 dollar raise as he has worked for me for almost six months (Yes I know that is a low wage). I am also going to give both of my employees at least a few hundred dollar bonus at year end. We had a decent year and the guys went through alot.

    My questions is what are some ballpark hourly wages to employees in these fields? Regarding the bonuses is there any way to give it to them untaxed? I realize added health benefits and such is one way. Please give me some ideas based on how your company is set up. I want to be fair with my guys, but my profit margins are getting smaller each day. Thank god for lower fuel costs for the time being.

  2. greenmonster304

    greenmonster304 LawnSite Gold Member
    Messages: 3,588

    not sure i can help to much but just don't do what my old boss did. I managed his irrigation division for 2 years. first christmas I got $50.00 and year 2 I got $75.00 gift card to best buy. needless to say I quit soon after and started my own co.
  3. JDUtah

    JDUtah LawnSite Silver Member
    from UT
    Messages: 2,636


    As for the tax and benefits, talk to your Accountant and "Benefit Broker"
  4. soloscaperman

    soloscaperman LawnSite Gold Member
    Messages: 3,045

    Any owner can take your workers away just by saying I will pay you this.
    The catch is not just about the per hour. Hangout with him. Bring him out to eat. Make him feel important. If his car breaks down and its suttin small pay for it. change his oil once in a while. Trust me he will respect you and you will save money by not giving him a big raise and for him he can't put a money sign on that......

    Buy him coffee, food, bottle of water, be like a sales manager feed him coporate lies, give him a goal every month.

    I worked for alot of scumbags in landscaping and the one I worked for was actually one that paid me a buck less versus the other guy but he did always pay me on time, hungout, worked on my car, payed for my food at the bar etc...
  5. Steve B

    Steve B LawnSite Member
    Messages: 56

    I don't think there is any way to pay a bonus and not have it be taxable. Even gift cards etc. are technically considered compensation and are supposed to be taxed - although if they are fairly small ($50 or less) I doubt it would be a big deal to the IRS.

    Good deeds as mentioned above would be one way to give a reward without involving the IRS. I like the idea of always picking up the bar tab and helping your guys whenever possible.
  6. Fvstringpicker

    Fvstringpicker LawnSite Fanatic
    Messages: 7,647

    There's no way to pay a bonus, run it through the books, and not have it taxable.
  7. Jeff Tracey Enterprises

    Jeff Tracey Enterprises LawnSite Member
    Messages: 104

    The IRS cant track it if its CASH!!!! I am legal and not trying to tell everyone to do illegal things but if your guys busted butt all year, give them their bonuses in cash and bite the bullet and you pay taxes on it, just dont put in your books that you paid it out in wages.
  8. Az Gardener

    Az Gardener LawnSite Gold Member
    Messages: 3,899

    Your profit going down is not a bad thing if it is because you are driving it down on your terms. Do things that make their life's easier and save them money.

    Health insurance is a great way. You don't have to give every employee full coverage just set a # that you are going to contribute to each employee for coverage and be sure you have done the legwork and the administration. We pay up to 150 per guy per month for coverage, that covers most guys completely. If they are older or have a family they can pay the extra to get the coverage we do all the paperwork and make the payments.

    We provide lunch and drinks throughout the day I have a freezer at the yard full of Ice and I stock up the frig. Each rig has a big cooler I provide Gatoraid, lunch meat, bread, condiments, chips, cookies, fruit, granola bars and from time to time sodas or red bull. I occasionally bring Pizza's to the job. This also cuts down my overtime as the guys are not stopping to get drinks etc. Now that it is getting cooler we are getting coffee at the yard in the morning.

    I pay weekly, guys are not great at budgeting so this is attractive when having to pick between two companies.

    Have a real interest in their lives and do what you can to help them get ahead. We do employee development meetings and we not only discuss their performance at work but goal setting both professional and personal. Teach them how to do a personal budget, how to use credit, how to get a house things like that. I prefer to be a mentor than a best friend.

    Do what you can to make the work enjoyable. I spent a lot of money to customize our trailers so the guys can find everything they need quickly and get to it. There is a cabinet/fold down table for the food and a clean area to make sand witches, there is also a bathroom of sorts on board.

    Uniforms from a professional company is also great benefit that will make their lives easier and keep them looking professional. Nobody likes to do laundry.

    Don't forget that the wives happiness will play a big part of your guys happiness too. Send home small gift certificate for target etc. in Lu of drinks at the bar. Occasionally send a picture of a completed job with a nice note to his house. "Just wanted you to see what Bob does all day. He does great work and is an important member of our team."

    All this entwined will build a company culture of mutual respect and loyalty. You don't have to show them you care, you have to care.
  9. Toy2

    Toy2 LawnSite Bronze Member
    Messages: 1,924

    Bonuses are always welcomed, around Christmas time, holidays,,,etc,,,,

    My buddy ownes a plumbing company, his first year he made over 250K and had nothing to show for it...all went to taxes..

    His second year he made 85K and had a King Ranch Ford, brand new fifth wheel, new company trucks(3)with tools and new building.......and cash, new car for the wife........WTF??

    He told me the Goverment teaches you to become a thief....I really believe that now....
  10. Stihl036pro

    Stihl036pro LawnSite Member
    Messages: 232

    I have found they paying an employee more money can result in them expecting raises more often. I have crossed that line before of kinda being there friend. Its not a good situation it almost never works. I suggest that you look into other ways to motivate your employees rather paying them more. Make the employees jobs so easy that they go though the day with less stress. All they need to do is make sure that show up and there entire day is planned out. It puts the stress on the owner but if its managed properly it will not be bad. Also make sure that there equipment is in top working order. I have found that dealing with employees that way will motivate them more then paying them more money.

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