What percentage are you paying for workers comp for payroll?

Discussion in 'Business Operations' started by Ramairfreak98ss, Oct 28, 2013.

  1. Ramairfreak98ss

    Ramairfreak98ss LawnSite Silver Member
    Messages: 2,210

    We had a rated policy last year, which means they charge you based off your payroll, which is how most should be i'd assume. Of course they send us a re-newal for only peanuts $300 or so, we pay it, then get a bill that says due 2 weeks ago, for basically 18% of what we have listed as our gross annual payroll, which is thousands, not $2,000 either.

    We havn't even had the audit yet from last season, so likely they'll go over the payroll amounts this next month and bill us for 18% from last season too. Isn't it a little odd that you're paying at the end of one policy and up front on the next? I could buy a very new used truck for the amount they're looking for for both years policies due next month.
  2. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Messages: 4,725

    We paid 4.5% this year but I did get a small claim this spring one guy hit something and got a ricochet to his lip and had a 1 cm cut. It was very minor yet they will be settling with him for something they seem hell bent to pay someone that wasn't hurt, nor does he need a settlement. I reached my breaking point with government fees and mandates this year and plan on eliminating all the employees next year and finally getting a real pay check for a change. In the last 5 years iv seen nearly everything double in costs it's rather comical.
  3. 94gt331

    94gt331 LawnSite Bronze Member
    Messages: 1,718

    Wow 4.5% pretty low, I pay 9% here in PA. But I agree all the fees and costs to keep employees on the payroll make me think about doing the same as you. But I will probaly be a 2 more years before I go back to solo.
  4. Ramairfreak98ss

    Ramairfreak98ss LawnSite Silver Member
    Messages: 2,210

    How are you going to eliminate all the employees? I know they say every state is different, and 4.5% isn't terrible, its not so sizable in each paycheck that you'd really take notice.
  5. Ramairfreak98ss

    Ramairfreak98ss LawnSite Silver Member
    Messages: 2,210

    8.3% INCREASE Jan of this past year.. no wonder... http://www.insurancejournal.com/news/east/2012/12/18/274476.htm

    So whatever it used to be, even if only 5%, then its 13.3% minimum. I don't know what we used to pay because it was on that rated system.

    NJ sucks, no wonder 90% of the lawn/landscaper guys are all illegals, not registered, not insured, no names etc. Then snow comes and only a few of us are out there.

    It sucks that we need to have a massive amount of insurance to plow snow 3 months of the season, and still get the bill 12 months of the year.
  6. jc1

    jc1 LawnSite Silver Member
    Messages: 2,156

    Isn't it an increase of the original amount?
    Say it was $4.50 per hundred it increases 8.5% of 4.50
    So it goes up .38
  7. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Messages: 4,725

    No that cost has been ok its the 6.9% unemployment rate and the ssi and medicare that kicks it to a full 20% on top of what they make. Then add in I have been extremely generous with their pay which has reduced the no shows and the turn over but the cost for reliability has proven to be to much to bare. A lot of guys here look at the rate you charge per hour and figure that is a representation of reality and it is not. We charge 60 an hour I would need to go to 75 an hour to make this work and with 250-500 landscaping companies in the surrounding area that ant going to happen.

    So we get ground down by the constant taxes and fees that keep creeping up and this year we started to look at what were getting for having employees and the numbers just don't justify the cost.

    Iv been taking in over 200k a year for the last 8 years or so in fact its Oct 31st today and I am confident when we do the billing tomorrow I have already passed that threshold. But this year as we dealt with the real tight times this spring and yes much of that was out of my hands. We had Hurricane Sandy steal 2 weeks work from us the previous year so that cost us 10k. We had a 39 inch snow storm in that took all march to melt. So this spring we were 15k off the mark of the previous year and that only just was righted. What that adds up to was I had 25k less than I should have to go forth this spring. But what I calculated this year upset me which is take all the employees hours and all the 2 owners hours combine them then divide the gross income by the hours and you get the income per hour. It wasn't 60 but it wasn't 50 either nor 40 an hour the final number was just a tad over 31 an hour when all is said and done. Now you take a guy making 16.50-17.50 and hour then put him at time an half then include a 20 % cost and you come to see there isn't any left over.

    I could go back to perhaps 14 an hour guys but whats the point the profit margin is to small. I could become more efficient yea thats it I will become more efficient since I don't have a clue what I am doing after 25 years in this trade. The problem with that is I am more efficient then most I run 2 lazer x 2013 ztrs I have 3 other ztrs a 60 a 52 and a 44 and a 36 tthp all with collection systems or side baggers on the smallest 2. I run 2 ram 4500s both have nearly no miles and run issue free in fact the 2012 only has about 6500 miles on her. They get very good mileage especially for their size. I have well maintained trailers including a back up should it be needed I am proficient at welding so do a lot of repairs in house. I run a fleet of 6 br 600s and 4-6 new weedwackers. I have 8 or so hedge trimmers so no down time to that. A pair of 20 hp leaf loaders and to go with that a pair of 18 hp self propelled blowers. Our fert program has ride on spreaders as well I also have 2 back up trucks. The routs are very tight of 200 accounts some 160 are my home town thus with in 3 miles of my shop. But there is still tight margins and low profits. Yet when my partner or I go out solo the income doesn't drop much. I can do 500-600 a day mowing by myself my partner can bring in 600-700 solo on his list. But the added employes only add 200-300 a day and thats the issue they are quick they are what would be considered vets with 10 years each in the trade but they do not produce enough to justify their costs.
  8. Mark Oomkes

    Mark Oomkes LawnSite Fanatic
    Messages: 15,290

    Not surprisingly, but I'm really not sure what you're asking or saying, freak.

    All states' rates are different.

    Anyways, they should base your rate on what your previous year's payroll was. At the end of the policy year, they perform an audit based on your actual payroll. You either owe or get a refund based on your payroll and what you already paid.

    They can not charge you for payroll that was not paid.

    Not sure if this helps because as I said, this is similar to your other posts.
  9. 94gt331

    94gt331 LawnSite Bronze Member
    Messages: 1,718

    I agree it really isn't worth the extra 200- 300 a day with employees when you look at the big picture at the end. Hey at least your helping the economy:waving:
  10. DA Quality Lawn & YS

    DA Quality Lawn & YS LawnSite Fanatic
    Messages: 9,292

    Ya when you do your audit, you will pay addl or get a refund based on the policy payroll vs actual. Then the ins. co will update your current policy term's payroll to match that of the audit. So yes, you can get a double whammy but could also get a net return as well.

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