Adding Overhead And Profit To Labor

Thread Tools Search this Thread Display Modes
Old 04-23-2009, 11:29 PM   #1
Registered User
treeguy's Avatar
Trade: tree service
Join Date: Mar 2009
Posts: 7
Rewards Points: 10

Adding Overhead And Profit To Labor

I recently passed a contractor's exam for tree service. My license should be issued shortly, but in the meantime I am trying to figure out what and how to charge for labor.
I pay my guys $15 per hour. I don't yet know what this will cost me once I pay fica, state of ca and worker's comp. So here is my question. Do I add all of those additional charges for labor into my overhead and charge my customers $15 per hour for labor? Or should I figure out what 1 hour of labor costs me and then add overhead and profit to that figure?
For example.. If I pay my worker $15 per hour and then with all of the additional fees (taxes and insurance) it comes out to about $30 per hour, do I then add overhead and profit to $30 per hour? Does this sound as confusing to anyone else as it does to me? I know I would add general liability ins to overhead, but should I add workers comp and taxes to that as well?
treeguy is offline  

Warning: The topics covered on this site include activities in which there exists the potential for serious injury or death. DOES NOT guarantee the accuracy or completeness of any information contained on this site. Always use proper safety precaution and reference reliable outside sources before attempting any construction or remodeling task!




Old 04-23-2009, 11:44 PM   #2
What goes in this space?
FJRFencer's Avatar
Trade: Fence installations
Join Date: Apr 2009
Location: Birmingham, Al
Posts: 53
Rewards Points: 75

Re: Adding Overhead And Profit To Labor

If you don't figure in ALL your costs. you will lose money.

Example 1 hour of work you don't figure it right based on 1 guy working and job complete. you figure $50 you pay your man $15 and you clear $35 right?

Just guessing your tax rate and workers comp.

your $15 is prob closer to $22
Did you drive out one time to bid the job. Fuel cost/distance traveled.
Did you get the job and go back? Fuel cost/distance traveled
Payed said labor while he was sitting in the truck on the drive $$
Overhead = monthly advertising expense as well. Phone book, direct mail, website hosting, etc. all play a part in the bottom line.
Gen liability you mentioned as well.
Truck payment?
Truck insurance?
What if you have equipment failure? got a cushion for that?

Once said and done you prob clear $5 (If that)

Think you underbid?


FJRFencer is offline  

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Join Now... It's Fast and FREE!

I am a professional contractor
I am a DIY Homeowner
Drywall Talk is for

At we cater exlusivly to professional contractors who make their living as a contractor. Knowing that many homeowners and DIYers are looking for a community to call home, we've created DIY Chatroom is full of helpful advices and perfect for DIY homeowners.

Redirecing in 10 seconds
No Thanks
terms of service

Already Have an Account?