Just Curious, How Do You Figure YOUR Employees Salary?

yungNdum

I have to be honest, I'm not a contractor but an employee of one. I have talked to a lot of people from different parts of the country and it seems that contractors up north charge about the same as here in Florida, only they pay their employees about $5-$10 an hour more. My contractor charges $85 per journeyman and $45 for a helper. The journeyman will make anywhere from $15-$20 ($20 for 20+ years in the trade) and the helper will make from $10-$14 ($14 for 10+ years in the trade). He also provides full paid PPO for the employee, paid vacation, and 401k; which I guess adds around $3 per hour to base pay.

Anyway, my actual question is, out of that 85 dollars how much of that is actually going to cover overhead and how do I fit in there? I realize every company is different, but if it were your company how much do you think you would profit off each hour? How much would you be willing to pay an employee? To be extremely honest I just want to know if I'm being screwed and what I can possibly be making. It just sucks when the f*****g carpenters that don't even need to carry a code book (or go to school or need a license) make one and a half times my salary.

If it makes you feel better I've always wanted to own my own business and plan on becoming a contractor some day. Unfortunately, I only have 2 and a 1/2 years in the trade (need 6 years before I can take a masters test here). And remember I work for your competition, so don't feel pity for letting me know these things.

mahlere

as a general rule, for service work (jobbing type), labor (including burden) shouldn't be more than 30% of your gross...and for construction type work (renovations, installations, new work) is shouldn't exceed 45% of your gross...

so, if the company is charging $85/hr (for every hour) that would be $680/day gross...

service work, labor shouldn't exceed $204/day or $25.50/hr (including all burden)

construction type - $306/day or $38.25/hr (including burden)

now, service work require much more overhead (primarily advertising, trucks, etc) than installation work.

but to throw a monkey wrench into the plan...say the service side only bills an average of 6 hrs a day...that gives a gross of $510/day...pay a guy $204/day and he's running you 40%...too high

yungNdum

so.. what exactly is burden? Are we talking gas in the truck or something else?

mahlere

no...burden is the employers part of payroll taxes, benefits, etc...you're PPO plan, if they match your 401k, the 7.5% they employer pays into the SS..any other benefits they provide...

gas, trucks, etc, that's overhead that's paid out of the money left after your labor is paid...

Speedy Petey

How could you possible be "screwed"???? Because you think your boss is making too much on you?
Did you not agree on a salary before starting to work for him?
Sorry to tell you this, but your primary function is to make him money. Period.
This is the cold hard truth. I know it sucks but it is.

Do you get paid for travel time, at all?
Do you get paid for breaks?
Do you get paid for going to the bathroom?
Or chatting with the customer, even for ten minutes?

Do you realize how much unproductive time there is in a day? You get paid for this. Your boss has to pay you, and the govt, and the insurance companies for this "down time", and he is not making a cent.
So.... that $15 dollars he is paying you, is more like $25-$30 bottom line. If he is charging $45 for you he is making ~$15/hr on you. ONE hour of unexpected down time and he loses the profit of additional two hours for a total loss of profit for three hours.

See why he HAS to charge so much for you?

__________________

yungNdum

well, I guess I don't feel so bad about asking for a raise now. Thank you for the information.

How do contractors feel about their employees discussing their wages? I know a few guys have been hired on that are now starting at higher wages than the guys previously employed. I always thought the idea was to keep your good, current employees. Isn't that why they have benefits?
It seems the only way to make a decent wage is to jump company to company. Hell, a few months ago when the housing bubble burst a few of my friends were laid off. I felt lucky that I got to keep my job. They make more money than I do now and I'm a better employee. Sometimes I just don't think what I do makes a difference...

How do contractors feel about this stuff? Do you give your guys a raise before they start to think about leaving or do you say I'll give you a raise as they are walking out the door?

yungNdum

no ****, I only feel screwed because I feel as though I am worth more money than what he is paying me.

Kgmz

Burden is any cost the employer has to pay above the actual wage they pay the employee.

Mandatory payments:
Workmans compensation and liability insurance
The employers half of the Social Security, and Medicare taxes
Your hourly wage when you have to attend classes required for your job and your license, such as annual required CEU's for electricians, etc.
Etc.
Etc.

Not mandatory payments or fringe benefits:
Employer provided health care
Paid vacations
Sick Leave pay
Etc.
Etc.


Your guess of $3 a hour is way off, the typical employee burden for a worker in the construction trades is usually somewhere between 50 to 100% of wages. and if you see what we have to pay for workmans comp you will understand.

yungNdum

All of that is paid in that 30%-45%?

I figure the medical insurance was around $400 a month. I think that works out to around $3 per hour. The worker's comp I have no idea how expensive that is. As many accidents that happen in construction I couldn't imagine it's cheap at all. How much is it though typically?

mahlere

if the boss knows his costs, and charges accordingly, yes, that's all in the 30%-45%...so, if your salary and burden in $30/hr...he's not making money on you...

macmikeman

Florida is such a nice lovely place. I am impressed with the quality of the roads lacking potholes and so forth. Sunny and warm. Quaint accents. If you step outside and gently sniff the wind you will smell the rubber burning off my tires as I screeched out of there 30 years ago to get to the place where they paid people to work rather than piss on their heads.........

yungNdum

gotcha

MIbeachbuilder

Are you SURE that the journeyman electricians are only making 15-20 per hour? That sounds extremely low to me for a skilled trade....unless...are you an american citizen?

I don't know if you are union or not but lets assume that you are...A LOT more than 3 bucks goes into your bennies package, so guess again. even if your not union, for the package you are getting, your boss is paying more than 3 bucks over base for it. Considering how much it costs for your boss to pay for all of the insurances, transpo, materials, tools etc... just to stay in business. (assuming he provides you service vehicles...) and he IS entitled to make a profit off of you, he is after all in business to make a profit.

A good carpenter has had some form of education whether its union or passed down from family members. We have to have a license, pay insurance, bennies and abide to code books too.

Bide your time and enjoy it Timmy. Someday when you are a 'contractor' and making money off your guys you will wonder if its really worth it when you have some punk getting pissed off at you because you dare make money off of him. Suck it up I say!

yungNdum

HAHA!
my wife won't let me leave

Speedy Petey

OK, if no **** then WHY are you asking??


The ask for more, or go find someone who will pay you more.
Seems like common sense to me.

__________________

Kgmz

Another cost I forgot to add, but really will pertain to electrical contractors, plumbers, etc. Most of the electrical contractors around here will have a truck/van for each team of employees. Usually one journeyman and a helper or sometimes just for one journeyman.

So this is another added cost the employer has for each employee. And what do you think it costs to provide a van, insurance, fuel and maintenance, etc. Plus any special tools, etc.

yungNdum

That is all figured into overhead though (I assume). When I say +$3 an hour for benefits, I'm just talking about what I'm bringing home so if you see a job in the paper that is $13 an hour vs one that is $11 an hour + full medical you're probably better off going with $11 + insurance. Florida is a right to work state, which discourages unions. There are unions here, but they are pretty rare and pretty weak.

I am very American. 4 or 5 generations at least. That is exactly how much journeymen make. You can go further south (about 30min drive) for an extra 2 dollars. We don't do really cheap houses either. In fact we do some of the fanciest houses in the country so... you'd think we'd get paid higher because of this, but this is about average for the area.

Look, I'm not upset that he is making money off of me. That is how this business thing works... I just want a fair wage. Whatever i said must have come out wrong.

Sorry about the carpenter thing. I was a framer for about 6months before I figured out I was afraid of heights and there are some extremely talented carpenters out there. The knowledge of code book is just more in electrical, in my opinion. Carpentry takes a lot of talent, but not a lot of sticking your nose in the books.

yungNdum

I am asking these questions tonight to get a different perspective. Am I underpaid? Can I achieve more? How does my boss figure his wages? Maybe I don't deserve more or he can't afford it. I would like to know before leaving a job that I really do like.

yungNdum

I realize all of these costs are there. I just have no idea what they cost.

workers comp
van maintenance
work shirts
office staff
office rent
advertising
ect...

I figure I could price all of this out myself or just go to a contractor forum and ask some strangers. I realize most of the $85 an hour is going to paying off bills, but I was curious how much the boss man has reserved for wages. So far I believe I have a better idea.

yungNdum

anyway, thanks for all the responses. I gotta go to sleep.