Thoughts On Your Hourly Fee Vs. Helpers/journey Wages, & %profit After Taxes?

jordanski

hello everyone,

Thought this would be a good topic that I haven't found in my searches. It seems our business is very different regionally in regards to wages but we all pay similar federal taxes.

My question is thus:

For arguement's sake let's call this a time and material wage, so it could theoretically apply to any job. I think this question is geared more towards smaller outfits, not big companies.

What do you think is the optimal hourly fee for a $15/helper, considering you need to make a profit after taxes? In my case it would be a low overhead/residential work/small outfit type paradigm.

I would also pose the question for paying a guy $30-$35 hour. This might be more relevant to carpenters but I do remodeling & painting so I find it most intriguing.

So, theoretically speaking of course (hi uncle sam!) let's say you need to bring a helper in for a day to say, scrape paint or clean up the ground on a roof tear-off, whatever, you're gonna pay him $15 an hour but the job is on the books. What would you charge the client for his labor. Keep in mind that theoretically you would be doing the work if he didn't so a professional wage is in order for any work that's necessary to complete the job.

I'm thinking $45 for a $15 an hour helper, and $65 for a 30-35/hr skilled worker, has anybody done the math on this type of thing? I've figured roughly 1/3 for uncle sam is a good starting point.

I doubt there's anyone on here paying a painter $35/hr so I might ask a mod to move this to another subforum depending on responses. But I'm mostly asking in the context of summer painting helpers @ 15/hr. I live in a pretty gentrified city with ridiculous housing prices so even the vatos in front of home depot want 12-15 for unskilled labor, just to give you guys a reference point. Skilled painters are very hard to find here, and anyone who isn't fingerpainting the chimney with drool comin' out his mouth can get $15/hr.

Would love to see some feedback on this one.
peace,
jordan

Jethroe

I cannot afford even 0ne 15 an hour helper here. It has been proven to me more than once in painting. I have some of the best guys around and the people don't even know this or care.

I just got off a job last mo. that I bid low to get and these guys to working both are master crafstmen that can do anything believe me they can too. They are Old friends of mine that worked in cabinet shops with me over the years. They are older that me and slower but they are good and meticulouse enough I do admire that in their qualities as craftsmen.

One was even my formeman in a cabinet shop for a long time. I was the lead painter and laminate guy there. The other can outdo any body I have ever seen on any table saw you set in front of him. Glider slider and all. but I had to let them both go on the job because it was eating my lunch. I still love them both and they both now hate me. I hate it and I wished it never happened but people still don't understand why we have to charge the prices we do yet for real professionlism. MO only..........

jordanski

seems a lot of times a well bid job can be taken under by what passes for work ethic in people today. Cats complain about the wage but for what they are actually producing you're paying them like $100 an hour. Ever have to tell someone that it'd cost $50,000. to paint a house at the rate they're working?

send_it_all

Not that I am an expert at making money (as you can see from the only thread I have started)...but the way I have been figuring it is.....

I have a helper that I pay $12.50 per hour. Worker's Comp for him is 40%...so now my cost is $17.50

Payroll tax is around 12% ...now it's 19.50

I have a group medical plan that tacks on about $2 per hour per employee.

so my cost is 21.50 or so....I figure in $30 per hour for his time when I am estimating a job. But I am not getting rich either...so it will probably go up very soon....as will my hourly rate.

jordanski

aren't you forgetting a percentage every april 15th in your expenses. I don't know the tax structures for all the types of business set-ups.
My ballpark to start the discussion is kinda like:
1/3 for the worker, 1/3 for tax type overhead, 1/3 profit.
I guess I'm wondering how crazy that sounds.
I'm guessing you should be charging about $36 for him. If he's not costing you money through incompetence he should be making you around $100 a day at that rate, no?

I'm a hot **** painter and a lousy accountant, just trying to learn.
-jojo

Jethroe

Try to get the HO's to understand all of this..
We have to charge what we charge to make it. I just wanted to say that I'm tryin this thing one more time and it will probly be my last, If I can't make it this time I'm hangin up my hat and workin for some other squirrel like me to figure it all out...

__________________
"Well I Tell Them There's No Problems Only Solutions".

Brushslingers

Ballpark, double whatever you pay a man is what you need to charge for an hour without materials. Depending on your overhead you may need to move the bar up.. but it's close. For a helper here they may get 10-12 unskilled... I need to charge 30+ to meet a profit, IF, they perform.

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Benn

PlainPainter

Running these contracting businesses are so costly - liability, commercial plates, truck repairs that are endless, investment in new equipment - contstantly buying buckets and bucket liners and hooks - endless! If you want to survive charge $30 an hour for a $15/hr on the books guy - but it hardly seems worth it to me. Especially when you factor in that you give fixed cost estimates in general - and you always end up spending much longer on jobs - then there are the rainstorms that make you miss tons of days and so on and so on. My attitude is you have to charge triple - if you pay a guy $15 you gotta charge $45. An extremely well qualified painter who can run a crew and orchestrate supplies and equipment - and he's getting like 21-23, you have to charge the customer a solid $60.

I was just talking to my plumber - and he was telling me all the things he has to pay for - and he charges $75/man hour - but he can rarely get a full 8 hrs in due to the nature of this work. And spends time running around going here and going there getting parts and giving estimates and wasting gas - after everthing was all said and done - his accountant told him that his son who works at the grocery market for $13/hr with overtime made more money! So just be carefull - if you think you only need to charge $30-$35 man-hour in this business, then your business model better be large crews whipping out fast work - think quantity not quality - then you can make money. If you like staying relatively small 1-4 guys including yourself, and you emphasize quality work as your market - then you need to charge much more.

-plainpainter

jordanski

I agree with the triple estimate, 45 for a 15/hr.

The 30-35 number I mentioned was for a wage, like charging $60-65/hr for a 30-35/hr finish carpenter to come in for a day. My 2nd question was regarding those figures.

I agree, charging $30-35 an hour on the books for a $15/hr is not sustainable, and a good way to go out of business
jojo

Patton

It is very hard to explain it to a home owner. When they see labor at $45/hr, they think you are trying to stick it to them. Because, in most non contractor jobs, people dont calculate in all of their day to day expenses. Due to the letigiousness of our country, our insurance rates are unbelievable, which in the end hurts the customer.
One very simple truth that I have seen work is just being as fothcoming with the client as possible.

pstorey

Our rate is $50 p/h per man no matter what his skill level . I try to offload some of my journeymens costs by rounding the crew out with less skilled/apprentice painters. Ideally our average wage is about $18 per man.

THINKPAINTING

Well said. If only 90% of contractors understood this.

Richard

$40 per man hour worked. What I pay them makes no difference.

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Rich