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Question regarding how office fees are taken out...

1765 Views 2 Replies 2 Participants Last post by  EWG612
Ok so I'm fairly new to this job and I just wanted to ask of few experienced contractors if this way of calculating an office fee is proper.

I make 40% commission with a 10% office fee taken out. Here is a sample capout:

Total contract price = 13,011.00

10% office fee - 1,301.10

= 11,709.90

then after the office fee they subtract for materials and labor and find out the profit for the company. Lets just say it came to 5,000 total profit. Now I get 40% of that......or $2,000

Is this normal to take the office fee out of the contract price? It just doesn't seem right b/c one of our sales guys got his capout on like a 6K job and the office fee was more then his commission
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From what I am reading, you have a very fair capout. This is very common in the roofing industry with the stormers. The averages are 10-20% office with anywhere from 35-50% split after job costs and office taken out. On your example of the office fee being more than the commission on a $6,000 job (office fee would have been $600), it seems as if the salesman didn't sell the job for enough money. Obviously, the more profit in a job, the more commission. Sales price means nothing on this type of commission schedule. Sell a bunch of $2,000 handyman jobs with $250 bucks cost in them and you make as much commission as your $6,000 example. Two words of advice on this type of commission schedule.....HOLD GROSS.
thx for the info.

By the way I was just using a make believe job in the example. Obv I wouldn't be complaining about making 2k on a job. It was just a make believe capout.
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