Percentage to employees?

Discussion in 'Business Operations' started by AK Lawn, Mar 21, 2002.


Do you pay your workers by the hour or are they paid the # of jobs completed (commes

Poll closed Mar 28, 2002.
  1. Commesion

    1 vote(s)
  2. hourly

    10 vote(s)
  1. AK Lawn

    AK Lawn LawnSite Member
    Messages: 186

    I know this has been a topic often but was just wondering what chunck of the business revenue is paid towards your employees. I know 99% of us who have employees pay them hourly, atleast iam assuming that, but what percentage of total revenue do your pay your employees, after reviewing my books i am paying my 4 employees 49%, which seems like to much, i have been told thaT 30% IS ABOUT RIGHT what do you guys think, and my guys were making way to much overtime last season. Any ideas, not expecting much when i haven't given you much information, just wondering what your guys's strategies are. Or am i supposed to plan on paying that much else, in the past it was right about the 30% mark but i blew up last year and added a lot more business
    AK Lawn
  2. AK Lawn

    AK Lawn LawnSite Member
    Messages: 186

    i did pay my guys commesion two years ago and it didn't work out very well and went back to hourly, any suggestions on how to make that work again, and what percentage dio you give your workers, i paid them 17% crew leader, and 13% field worker, just didn't pan ou, has this worked for anyone and how did you make it successful
    AK Lawn
  3. LawnLad

    LawnLad LawnSite Senior Member
    Messages: 738

    As a percentage - most will be between 25% and 35% depending on your business mix. 50% is high - you should be getting more revenue per guy.

    If you're not bringing back enough revenue per hour and you're working over time, you're cutting your own throat. Either expand to add more employees to cover your demand, or turn down work and goto a five day week and work closer to 40 hours if you can. To pay 1.5 times pay plus your burden, which is a percentage, means that a $10 an hour employee who costs you $13 ish with taxes, costs you 43% of your revenue at $30.00 per hour (still not enough per hour). As soon as that guy hits OT, he's eating up 65% of your revenue in cost, at $15.00 plus 30% = $19.50 per hour. So unless the work is highly profitable or you're charging more per hour, you're eating yourself up. You can't live on 35% return - you're over head and equipment is more than that I suspect.
  4. Nebraska

    Nebraska LawnSite Senior Member
    Messages: 525

    No matter how you pay them according to FLSA you can't go below minimum wage of course and you might be opening a can of worms in regard to overtime hours for a non-exempt employee.
  5. ohiolawnguy

    ohiolawnguy LawnSite Senior Member
    Messages: 397

    all our employees are hourly, including myself. i do get a percentage in the winter for snowplowing. this is because i got the majority of the customers on 2 of our 3 routes myself.
  6. SprinklerGuy

    SprinklerGuy LawnSite Bronze Member
    Messages: 1,778

    shame not everyone understood the question.......the question was (i think!) what is your percentage of wages to revenue. Right?

    Mine is right at 40% and it includes my largest subcontractor. He takes up 12% of that! I am very comfortable at this number it has been there the last couple of years of so.

    Of course this does not include my salary, if it did it would be closer to 55% or so.

    In fact I heard a "consultant" say once that 50% is okay as long as it includes your salary and your other costs of sales aren't out of line.
  7. Nebraska

    Nebraska LawnSite Senior Member
    Messages: 525

    The questions from AK reads as a combination of both issues. Commision based pay %ages as well as what % of revenue payroll accounts for. It would be great if it would work out that I pay maintenance employees 13-15% (including taxes, w/c etc.)
  8. SprinklerGuy

    SprinklerGuy LawnSite Bronze Member
    Messages: 1,778

    Read it again Nebraska............I think he means he added up his total wages then divided it into his total revenue........came up with the 49%
  9. Nebraska

    Nebraska LawnSite Senior Member
    Messages: 525

    Tony I saw the first post then his second post it looks like he is talking about a different scenerio. That's what I'm talking about unless I am WAY off. p.s nice location for that house!
  10. cutntrim

    cutntrim LawnSite Senior Member
    Messages: 474

    Ours was around 40% but that included two partners plus two employees. It'll be different this year since I'm now solo.

    Avoid overtime like the plague. One way is to hire a "float" guy to step in and cover for an employee who has hit the limit in hours. Here in Ontario it's 44hrs before overtime kicks in. Also, here if you ask your employee ahead of time if they want to work extra hours at normal pay-per-hour (and they agree) then it's OK not to pay overtime.

    This is what I've done in the past. Don't want to work extra for regular problem, enjoy your weekend.

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