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Help. 2 part employee payroll ?

Discussion in 'Business Operations' started by haybaler, Nov 2, 2007.

  1. haybaler

    haybaler LawnSite Senior Member
    from ma
    Messages: 511

    Ok no 1. in general, how does your hourly pay rate equate to your hourly rate you bill out, percentage wise??

    no. 2. when you have a set rate you charge and you pay on experience, how do you explain to the customer them paying $40 per hour when they see a kid out there your only paying 10??

    Mowing is easy, all set prices. but for landscaping and other work how do you figure it out and justify everything? if I'm billing $30 per hour and my guy is costing me $18 in payroll is it worth sending him to do a job on his own?? If I send another guy that is only costing me $12 in payroll then it is, but is the customer going to wine.
  2. Lawnmasters

    Lawnmasters LawnSite Member
    Messages: 180

    Does your truck cost you anything? Your building rent, liablity insurance, fuel, mulch, plants, unemployment, ss and med. costs, etc, etc. Hourly wage in itself is only a fraction of the costs. You have to know what all these things cost you, put them together and determine an hourly cost to add to your employees wages, then you know how much that employee is actually costing you. The amount will suprise you if you haven't done it.
  3. haybaler

    haybaler LawnSite Senior Member
    from ma
    Messages: 511

    notice I said payroll cost, not wages. that is including ss/med etc. mulch and plants are cost of sales, they do not factor into rates. help me out here please.
  4. lawnMaster5000

    lawnMaster5000 LawnSite Senior Member
    Messages: 591

    if they complain about $40/hr tell them how much your guys cost you and explain that you still have to pay for the equipment used as well as time and money spent maintaining equipment.

    If you explain your costs most clients will be a little more understanding of your price rates, especially if you are only charging $40/hr.

    The other option, dont give an hourly rate. Just bill by the job.
  5. supercuts

    supercuts LawnSite Silver Member
    Messages: 2,808

    are you in this to make money or not?? you dont need to justify anything to them. if you do its your choice. your investing the time to schedual, provide work for, and deal with paper work, workers comp, etc for your employees. let them deal with your prices. im shocked at your questions.

    and what lawnmaster asked is correct, regaurdless of wages, you have overhead. perhaps you asked your questions poorly. im confused what you really want then? and yes, making $12/hr off someone is worth while. at theend of an 8 hour day you just made $96. how is htat not good?
  6. haybaler

    haybaler LawnSite Senior Member
    from ma
    Messages: 511

    OK, I didn't think my questions were that confusing. My first questing was simply out of x that you bill out what percentage goes to payroll. the next question is you pay your employees on experience, but then bill out the same rate, is that fair? I thought after five years I had it all figured out, but I've had some customers complain this past week. I guess I should just let them go because I know if anything i'm on the cheap side.
  7. Lawnmasters

    Lawnmasters LawnSite Member
    Messages: 180

    OK, I will try to help you. Yes payroll costs are wages, ss, mc, ue, wc. But if you add thay up and only collect that from your customer, you are only recovering the cost of that employee. I am in business to make money, not supply labor for the customer. The extra you are billing the customer helps to pay for your mulch, equipment, plants, building, trucks, fuel, etc.It's not the only thing you recover your costs on but it's one thing. We bill 40.00 an hour for man hours, the highest paid guy I have is only getting 14.00 an hour. The customer must know that you have costs, we don't have any trouble at all charging what we need, but our customers know we are a professional company that has been in business for 17 years with professional designations, not Bubba with a wheel barrow. Set yourself up as a professional with knowledge to back it up and you won't have any problem.
  8. Armadillolawncare

    Armadillolawncare LawnSite Senior Member
    Messages: 570

    Why would you tell your customer how much you bill per hour and how much you pay your employees? Just give them a price for the whole job. I would never discuss payroll with my customers
  9. haybaler

    haybaler LawnSite Senior Member
    from ma
    Messages: 511

    I never said that, but they know when they see a young kid out there not pulling there weight there making less money than the other guys.
  10. mslawn

    mslawn LawnSite Senior Member
    from LA
    Messages: 483

    30-35 percent

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