Bill Rates For Employees

DeanV

If you are doing a job T&M and say you pay your helper 15/hr (no benefits to keeep it simple), what do you bill him out for?

wackman

We bill out man hours at the same rate no matter who is doing the work.

Some guys cost me more but they either do better work, faster work or oversee others. The guys who cost me less are less knowledgeable, need to be watched and are slower.

So something that a $20 hr guy could do in 45 mins they, at $15 an hr do in an hour or so.

If you think of that as a cost of $5 per 15 min they actually cost me about the same a lot of the time.

My General Super gets $55 an hour and is worth every penny.

AAPaint

We charge a set amount per MAN hour. Doesn't matter who that man is. If it's 3 men, 1 hour, we charge 3 man hours at our company rate which has their yearly wages, taxes, w/c, and all of our overhead figured into it. To hit my income goal for the year, all I have to do is sell X amount of billable hours at our company rate. Then the company profits, I make what I need, and the guys are paid well. The formula is good....now I just have to sell the jobs.

__________________
-AAPaint

AA Quality Painting & Pressure Washing LLC
Jacksonville Painters
Jacksonville, FL.

ProWallGuy

Yeah, what he said.

__________________
Wallpaper Hanger St. Louis
Digital Murals Installation

faber307

On T&M work, have you ever had a customer question your service rate for a kid on the job? meaning obvious green horn......

AAPaint

No, and it wouldn't matter anyway. Him being lesser experienced means he gets paid less, and that is averaged across every man hour we bill just like every other last little cent we have as overhead. Due to the way we average our overhead and expenses across our total billable hours per year it still costs exactly the same per hour no matter who that guy in the field is.

Also, no greenhorn goes on my jobs without someone experienced enough to keep them busy sweeping or collecting trash, lol!!

I have just put my first two employees on full time with our own payroll service, w/c, etc. instead of using them through a labor source, and because of this it's much more important to track the expense each one creates much more closely.

If you need help figuring your costs, see my buddy Brian Drucks at www.yourcostcenter.com and he'll show you how to get a grip on it all.

__________________
-AAPaint

AA Quality Painting & Pressure Washing LLC
Jacksonville Painters
Jacksonville, FL.

Dave Mac

t/m

such as stripping wall paper, we used to charge 35 per man per hour, we just went up to $40. that is about the only thing we do TM.

George Z

"To hit my income goal for the year, all I have to do is sell X amount of billable hours at our company rate."

That is it!

Do exactly that, with the correct company rate and it works all the time.

__________________
Toronto Painters Commercial Painting Commercial Painting Toronto Toronto Office Painters
Painting Toronto Blog

PlainPainter

A man-hour is a fictitious number for me. Some people do better than what my man-hour is defined as, some do less. But that is on fixed cost estimates. So you figure the productivity rate of your help, compare it to your 'man-hour' and adjust his rate accordingly. But yes for time and materials - you have to give each person and individual man-hour. You may have two guys who are great, but you price one at $39/man hour and another at $46/man hour - I may bump them both up to $50/man hour - because I don't feel like working extra hard to pass on the cost savings to the customer. But someone who is at the helper stage and gets paid like $15/hr. My first rule of thumb is to double their rate to the customer. And I don't justify my costs - I may give just one number for the whole crew - I don't allow customers to know the inner workings of my business - either they want to pay or not. Another technique I use is to work backwards. Say a certain job takes 100 man-hours {not 'man-hours'} and your helper does half the work in half the time - and you get paid $4,000 + materials. He deserves to get no more than 1/5 of the gross sum of the labor - if geting paid under the table. So he will make $800 for 50 hours of labor or $16/hr under the table money. But make sure he is doing his own prep and setting up ladders as well - if he is helping you out more than you help him, he may be making you more efficient and getting more work done - so you may be unfairly paying him. But let's say he doesn't exactly do exactly half the work in half the time. The more general thing would be to do - multiply how much quantity of the total job he has done by the number 0.4 and multiply that again by the gross labor money of the contract. So now your helper has done 75% of the total work. .75*0.4*4,000 = $1,200 - that's the money he 'deserves'
now let's say he did that work in 60 hours time - his rate would be $20/hour under the table - and you effectively charged the customer $50/man-hour. Because he did 3/4 of the $4,000 dollar labor estimate which is $3,000 in 60 hours of time. Now you don't have to tell your help all these details or your customer - this information is for your eyes only. Now it's up to you to decide, how 'fast' your help is - how does his work rates compare with other workers who are getting paid the same - are other guys doing as much work, but aren't getting paid as well? Perhaps you should lower your estimates and lower his salary - or maybe the other bosses are just pocketing more of the profits. Or does your guy want $20/hr - but when you get a contract signed that is fair market value, but for his labor rates - he should only be getting $16/man-hour - these are all decisions you have to make.

-plainpainter

AAPaint

There's no sense swapping rates all over the place. Figure out your costs and production rates and that's it. An employee deserves the rate you hired him at, and that he agreed to work for. I don't care if he does 100% of the field work. Sounds to me like you're going bonkers trying to figure a rate for a guy that should already have one. Under the table mean illegal, and I'm not playing that game.

You should really take a look at the link I posted because it sounds like you don't have a full grip on your direct costs. For example. My direct labor cost per hour is $21.06. My overhead per hour is $26.71 and my total hourly cost is $47.77 overtime is $53.48. So again, regardless who's doing the work, as long as it gets done, the cost to me is the same.

__________________
-AAPaint

AA Quality Painting & Pressure Washing LLC
Jacksonville Painters
Jacksonville, FL.