As part of a few discussion going on recently over on the JLC site regarding what is variously refereed to as the PROOF/Indexed/Labor Allocated Overhead Markup method I created a Execl Spreadsheet that can be used to help contractors using that method to determine what the correct billing rate to charge for their personnel’s labor.
I didn’t want to leave my BreakTime brethren out of the loop so I’m posting a link to a URL where anyone from here who wants to take a look at it and possibly use it can download it. I’ve called it the PILAO_Wksht.xls with that being an acronym for PROOF/Indexed/Labor Allocated Overhead.
| View ImagePILAO_Wksht.xls |
It’s freeware and while I have turned on the “Protection” for each worksheet to keep users from accidentally damaging the calculations in the calculating fields it is opensouce and not password protected so users can unlock the sheets and make changes to the spreadsheet as they so choose by going to Tools > Protection, then un-protecting the sheet.
I have added this caveat to it use however, “Use of this spreadsheet is at the total liability of the user. Be careful with the formulas. Confirm that you have not missed any expenses specific to your company that may not be listed on this worksheet.” In other words use it at you own risk but geez what do you want? It’s freeware.
This is the first draft of the spreadsheet so it’s only been about 95% checked and tested so far so I’m still looking for bugs, as well as suggestions and ideas for further improvement to it too. I also haven’t yet written out the complete instructions on how to use it yet but I sort of figure most people will be able to muddle through it and for the most part figure it out on their own. You enter the data in the pale yellow colored cells and the other cells calculate automatically.
Replies
wow. pretty stingy with the vacation time, no?
sorry. this is not intended to discredit the work you've offered up free of charge, this is quite interesting stuff. thanks Jerrald
Well Sphaugh I think you probably knew that's just sample data that been entered in there. But in real life it never ceases to amaze me just how many small contractors there are than don't offer anything in the way of paid vacation or holidays. And they are often even stingier on benefits. Some even dodge paying employees time and a half for overtime!
Maybe it's all because they don't know how to recover for those costs by using the proper billing rate so maybe this in some very small way will help improve that situation for workers out there.
Still I'm looking for errors bugs and ways to improve it even further so please do continue to comment on it.
There was something I thought of earlier today when I went out to pickup the mail that I wanted to include but by the time I got back to my desk I had lost what it was I was thinking about so I need the commentary
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Sorry I'm just sorta ornery in that way, which usually explodes in my face when I type and you cannot read my facial expressions. [:-o notwithstanding]
I'm not in your field but I still find the stuff real interesting. When I was going to school, I used to work for a remodeler who was ahead of his time in using technology for estimating, cad, understanding real costs when calculating prices.
I don't see that I can add anything that would contribute to your "open source" effort - but I'll continue to peruse the document. I love excel.... in fact your use of the "name box" actually prompted me to learn something I'd never used. At first I wondered why you didn't use $B$5 constraints where you reference one particular cell in calculations that could get busted if you copy & paste their formulas across a number of columns - but the "name box" is a really cool "better way".
So, you've helped me in a way you didn't even intend and I appreciate it.
Nahh, Spaugh don't worry about it. I got the humor in that but also saw it as a good setup line for me to offer some of my own social commentary about the state of the small contractor in the building and remodeling industry.
"I'm not in your field but I still find the stuff real interesting." What field are you in then? And then again, what field do you think I'm really in too? I'm interested in that depending on where people first meet or run into me they all have different ideas and impressions about what it is I do and what it is my companies do too.
"I love excel.... in fact your use of the "name box" actually prompted me to learn something I'd never used. At first I wondered why you didn't use $B$5 constraints where you reference one particular cell in calculations that could get busted if you copy & paste their formulas across a number of columns - but the "name box" is a really cool "better way"."
By "name box" your referring to what I call the "Define Name" function. Yeah, it is often a better, more efficient, and convenient approach. I banged out this in maybe a little over four and a half hours by being able to extend out the rows of data using the Fill Right command and still have the calculation work thanks to using "Define Name". Plus it also allows me to conveniently find the data I want to use when it's on another worksheet.
I'm going to add another worksheet to it eventually that explains what each of those Defined Names are and the why's and wherefore's of where I used them so that people who want to modify the workbook will have a head start on figuring out how it really works. I gained a lot of my Excel skills just from taking apart and analyzing other workbooks I have seen over the years.
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Made a bunch of revisions this morning. I split what was the Labor Worksheet into separate worksheets now called the Labor Cost Worksheet and the Billable vs. Non-Billable Hours Worksheet and I added comments to the cells on those worksheets to help clarify what they are to the user and help with data entry. I also separated the Owners Compensation Information out as it own separate worksheet too.
PILAO_Wksht.xls
A Microsoft Excel Spreadsheet
(Windows & Macintosh)
3/13/2004 3:25pm — Version 4 published
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Thank you Jerrald. This is very interesting. Since reading the same article I have been trying to adjust my billing techniques. This is something that gives me a clearer face to my efforts. I feel because of you efforts here I've been on the right track.
And, while in the past I've reacted negatively to your postings, I've read enough to realize your just another of the true assets here at breaktime. hope someday to be of equal help.
JAGWAH "Thank you Jerrald. This is very interesting. Since reading the same article I have been trying to adjust my billing techniques. This is something that gives me a clearer face to my efforts. I feel because of you efforts here I've been on the right track"
Are you talking about Irv Chassen's recent JLC article Allocating Overhead to Labor Makes Financial Sense? Sounds like that the one you meant. There are some other good article there to that while they don't talk about the PROOF method by name they are similar of related. I also wrote an article that's on my web site called Markup: Comparing the Traditional Volume Based Markup
vs. the PROOF/Indexed/Labor Allocated method and at the end of it are links to those other JLC articles that you'll probably be interested in.
"And, while in the past I've reacted negatively to your postings, I've read enough to realize your just another of the true assets here at breaktime...."
Huh? Nah... I have no recollections of anything like that and I checked my sh!t list and you weren't on it. You should see the tussles I get in to over on JLC regarding estimating, markup, and management. There are few people here who come to mind that I think really find me annoying in that regard but it's like my girlfriend says; I probably enjoy annoying those kind of people.
"hope someday to be of equal help"
Feedback is always good. Both the good and the bad. Find stuff in the workbooks mechanics that your wondering about or questioning and let me know. It not a done deal yet. (Hey, help me find the spelling errors too please!)
A couple of fellows have brought up that the way the workbook works right now each employee no matter what their skill level is shares the same dollar amount of Overhead contribution. Some people feel that the overhead recovery contribution should be proportional to the trade persons skill level wage. Any thoughts regarding that?
My response to making it a user option to have a Weighted Overhead Distribution based on the skill level of the craft worker profile part of the workbook has been:
So I'm wondering what do you and other think regarding that. The seems to be the most common question I been asked since publishing the workbook.
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A couple of fellows have brought up that the way the workbook works right now each employee no matter what their skill level is shares the same dollar amount of Overhead contribution. Some people feel that the overhead recovery contribution should be proportional to the trade persons skill level wage. Any thoughts regarding that?
I disagree with this idea. Overhead is overhead and the only constant I feel you can apply it to is the employee hours. The reason you and others state that you shouldn't apply an overhead factor to materials is there is to much variability to meet a consistent expense.
Equally so to vary a factor according to trade or pay level flips a coin to wether one meets their expenses. A constant multiplier applied to every labor hour only varies by the amount of work done. Work less, less overhead. Work more, more overhead. Overhead met.
I've applied my overhead to my billable hours based on last years hours and expenses. Compared to previous years I've noticed a consistent number of billable hours. My materials weren't similarly in balance. The use of apprentices or journeymen varied. So the only close constant I can apply overhead to, is my hours. And only by the same percentage do I know I'll meet those overhead expenses.
2. I'm not all sure its good practice at all to use a Weighted Overhead Distribution in the first place. It sounds on the surface like it's "morally" the right thing to do but there are several logical and statistical reasons why I think its incorrect practice.
Sorry, but the thought of applying morality to all this is absurd. Morality applies to stop one from ripping off someone else for the sake of profit. This alternate thinking, of weighting the overhead according to trade might result in overcharging a customer as well as short changing yourself. If your not meeting your overhead because you've used to much cheap labor do you hire more journeymen on the next job to meet you expenses.
NIce work JH I don't have the time tonite to review it but I will. I appreciate the fact that we can share our (yours today !!) resources for the benefit of all in BT.
Thanks again.....
JoeFirst we get good- then we get fast !
Joe I just finished and uploaded version 5 having completed adding comments to the data entry cells on the Overhead Worksheet so.... I think I pretty much done with it for a while unless anyone spots spelling error or can think of any ideas or improvements to its format and architecture. Let me know how it works.
PILAO_Wksht.xls
A Microsoft Excel Spreadsheet
(Windows & Macintosh)
3/13/2004 10:42pm — Version 5 published
Hey where's Mike Smith?
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i'm right here , swamped with work... almost in lurk modeMike Smith Rhode Island : Design / Build / Repair / Restore
Like that's an excuse?
Your a PILAO guy, get to work and look at this and tell me if it works. (You're less than seven guys correct?)
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Well I did find and correct a computational screw-up that I have now corrected. Had the wrong cell references going on so the Total Labor COSTS per Year figure was coming up wrong and anywhere else it was being used by another formula those figures as a result would have been wrong too.
So the Billing Rates in the version 5 (and maybe 4) spreadsheets would have been wrong.
I also did add views of for both:
Billable Hourly Rates Determined via a Balanced Markup Distribution and..
Billable Hourly Rates Determined via a Weighted Markup Distribution
PILAO_Wksht.xls
A Microsoft Excel Spreadsheet
(Windows & Macintosh)
3/14/2004 10:22am — Version 6 published
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You must have a lot of spare time on your hands lately, my friend- think you can put some of it toward that outline you've been promising??? LOL
Bob
Yeah,...how did I know that was coming. My hand was forced when I saw PB's PROOF spreadsheet file and how ragged, broken, and mixed up it was. I'm done for a while now with the Excel stuff and I've got today and Monday free so I'll get back to work on putting those outlines together. And what about the outline I did send you? ( I did send you that one URL didn't I?).
Your just lucky I didn't get more sidetracked than I did because on Monday the new FileMaker 7 came out. I already have all this stuff built into my FileMaker based systems so doing it again in Excel was is sort of redundant for my own use. I should really be working out the strategy to migrate my own systems to FM7.
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I got the link to the outline you sent- if I can find time tomorrow between catastrophes on the site, I'll get it reworked (such is the life of an in-demand PM on a problem project....lol). It looks good- just some minor changes as I see it. I'll see if I can get some pictures of this jobsite posted tomorrow too- it's pretty impressive- 40' down in a sheetpiled hole with the river only 100 yards away and 2 feet above the bottom of the hole.
Bob
Thanks to Mike, Johnny, and T.L. for spotting the error in the Overhead worksheet. I also reorganized it and cleaned up it's appearance too. (So please check the formulas again, thank you, there's always a possibility that whenever I shift cells around like that that a link will get screwed up and will go unnoticed until I start playing around with the data again)
PILAO_Wksht v7.xls
A Microsoft Excel Spreadsheet
(Windows & Macintosh)
3/14/2004 6:22pm — Version 7 published
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Jerrald... is this the final one?
Thanks!
"David "Jerrald... is this the final one?" Well that's actually an impossible question to come up with a solid answer to. There is however a difference between "final" as in being safe to really use and in "final" as in "as good as it can get".
I'd like to think it's done as in "being safe to really use" but I haven't tested enough conditions and scenarios with it yet to say that for sure so keep your eyes out and let me know if there a glitch in it.
As far as the "as good as it can get" stage well that's sort of unachievable. Fifteen years ago I did this one painting (I was trained as a painter/artist back in college) and at the time it was without a doubt the best thing I had ever done. But I didn't let it sit at that. I've re approached the same painting seven times again and three of those attempts did succeed at creating what I felt was a better painting.
Each time I do a curved stair railing I get better at it.
Each time I create a new FileMaker program I get better at it.
(Each time I do plumbing work however I seem to get worse at it. Not my gig at all, I really suck at it, so I'm getting ready to give up on ever getting good with that field.)
Nah I have some other things I want to add and a few things that were suggested to me to. Plus I need to write all the help and how-to explanation text. I'll keep working on it whenever I find the time and think of something that might help or improve it.
I thinking of working on some more charts right now and I do have to write something about and create a worksheet for how the PROOF/Indexed/Labor Allocated Overhead method handles markup on on material and subcontractors because it is so different than what Michael Stone and Walt Stoppelwerth say to do with there traditional volume based markup methods.
I also want to actually create a couple of different sample file of different kinds of business models.
The solo home builder who subs out everything
A handyman operation
A dedicated specialty trade contractor
and a GC who does work both in-house and subs out various trades
So people can get a better feel for how it may work for their own business operations.
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PILAO_Wksht v8.xls
A Microsoft Excel Spreadsheet
(Windows & Macintosh)
3/15/2004 7:06am — Version 8 published
I had 127 total downloads of the PILOA spreadsheets (versions 1 through 5) and checking the logs again today it showed showed as of midnight last night there were 91 download of versions 6 and I don't have a data yet for how many people have downloaded version 7 which was up all day today. While are lot of those are repeat downloaders that still a lot of downloads and not much commentary (either here or JLC). Any thoughts or criticisms on how it works?
In all fairness I have received e-mail about it but isn't the point of a forum to look at something collectively? I find it hard to believe so few people have any comments, suggestions, ideas, or complaints.
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Edited 3/15/2004 7:30 pm ET by Jerrald Hayes
Well.... I downloaded it a few days ago and then noticed you were still tweaking it. I'll check out the new version and get back with some comments.
jerrald..might be the time of year... way behind on designs and estimates..
not to mention... today was corporate tax day.. and tomorrow i meet with the accountant for our personal taxes.... might be that everyone is in the same boatMike Smith Rhode Island : Design / Build / Repair / Restore
Well the downloading has tapered off to just 2 to 10 downloads a day but still there were 474 total downloads of the spreadsheet....still not much in the way of commentary, suggestions, ideas, or complaints here. I've got free time again coming up towards the end of this week, should I work on a version 9? What would I or should I work on?
PILAO_Wksht v8.xls
A Microsoft Excel Spreadsheet
(Windows & Macintosh)
3/15/2004 7:06am — Version 8 published
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Jerrald I downloaded it but I don't have excel so i couldn,t run it.
ANDYSZ2I MAY DISAGREE WITH WHAT YOUR SAYING BUT I WILL DEFEND TO THE DEATH YOUR RIGHT TO SAY IT.
Remodeler/Punchout
Andy, I don't know what to tell you right now. It is an Excel spreadsheet so it takes Excel to work. However I am building that same functionality into the next generation versions of the estimating software I've developed and they will run as standalones applications with a built in FileMaker7 engine but they are at least a month to a month and a half away from release. And sometime after they are done I will split out the Overhead Calculator part of them as release it as freeware as I did with the Labor Burden Calculator. Maybe possibly sometime around Memorial Day I'm thinking???
The truth is I don't really use Excel that much myself since I do most of my work in FileMaker but I figured doing a PROOF/Indexed/Labor Allocated Overhead markup worksheet in Excel was a good idea since most people do have Excel since it's a part of Microsoft Office. Do you have a different spreadsheet type application? Tell me what it is and I'll see if I can find a translator for you.
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I have xp professional and all it came with was ms works & word.
Computer skill along the accounting lines is not my strong point but I want to improve my skills and my computers abilities.
We do appreciate your hard work and letting us be your guinie pigs so keep up the good work and thanks.
ANDYSZ2I MAY DISAGREE WITH WHAT YOUR SAYING BUT I WILL DEFEND TO THE DEATH YOUR RIGHT TO SAY IT.
Remodeler/Punchout
Andy according to Microsoft Support MS Works Spreadsheet can open any of the following files:
Unless your MS Works application has been set as the default application to open .xls file you probably have to open it from within MS Works which means... Open your MS Works > From the File select Open and then locate the file PILAO_Wksht_v8.xls where is it resides on your hard drive. I'm going to guess that it will then tell you or ask you about splitting up and opening the file as separate files in Works. Will it still work in MSWorks? I don't know. There are 8 linked worksheets in the Excel workbook and to tell you the truth I have never worked with MSWorks so I really don't know how it works linking spreadsheets. Hopefully another MS Works user here will see this and maybe be able to provide better more program specific insight as to how Works works ( I just had to say "Works works" since it sounds interesting).
Hope that helps. Let me know what happens.
You do know that this is a PROOF/Indexed/Labor Allocated Overhead markup worksheet as opposed to something that would work with the Traditional Total Volume based markup that is taught by some of the other industry wag? There's a paper on my 360 site that compares the two styles of markup that also has links to some other JLC article on the topic that you might be interested in reading too. Markup: Comparing the Traditional Volume Based Markup
vs. the PROOF/Indexed/Labor Allocated method.
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I got to read the intro but The rest of the files would not come up due to "errors" and ms works shut down at this point , so i don't think i can run it as such.
ANDYSZ2I MAY DISAGREE WITH WHAT YOUR SAYING BUT I WILL DEFEND TO THE DEATH YOUR RIGHT TO SAY IT.
Remodeler/Punchout
Jerrald, that is a really well set-up sheet. I don't do estimates, but I do get my hands dirty with developing excel apps at the office.
You should take some credit for your work and throw a splash screen up on loading that at least mentions your name and a copywrite if not a blurb abt your company.
DagwoodView Image
Thanks Dag, I actaully have some other Excel work that a lot more polished and detailed than that that I have done for clients. This one came about as a part of a topic over on the Journal of Light Costruction site where a guy there posted a PROOF Style Markup Excel worksheet that becuse it didn't "work" I thought it would just confuse anyone who wanted to look at using that style of markup method. I've got this kind of functionality in my own FileMaker based stuff so this was sort of a redundant effort but it seems worthwhile in that everyone (or at least most people) seem to like playing around with spreadsheets.
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Jerrald,
I'm getting the same type of result as Andy with my Works Spreadsheet. I can access the intro after clicking thru a gob of errors and then it loads the intro but is dead in the water beyond that point.
As you can see, even the help section says it will open it, but it certainly isn't performing as intended.
Retries at opening the file result in the same screen. Doesn't seem to be a way to access the individual sheets.
Knowledge is power, but only if applied in a timely fashion.
Okay, here's some more specific info about what happens when using MS WS to open those spreadsheets.
At opening, these error messages appear.
There's about 20 of those "name too long or file type not supported".
Knowledge is power, but only if applied in a timely fashion.
Goldhiller, ANDYSZ2, et al (MS Works users...)
Well I fooled around with the spreadsheet a little this morning while waiting for a phone call to see if I could save it as a MS Works file and still have it work and I came up with 22 errors for formulas that it couldn't translate. So it looks like I'm not going to be able (or spend the time) to create a version of this spreadsheet that works for MS Works users.
There have been 560 ownloads of the file as of this past weekend and while some of those downloads are probably the same user downloading the file more than once that still represents a lot of Excel users. As I mentioned earlier I will sometime this spring have a freeware standalone runtime application built in FileMaker7 (Mac & Windows) that does what this spreadsheet does but I probably wont get to that until May and that should work for the folks without Excel . However since FM7 no longer supports Mac OS 9 and earlier I'm sure I'll find some old time Mac users that it wont work for.
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Easy enough for me to load Excel on this end. Feedback was just so you had some idea of what was transpiring if you heard this again from others using WS.
I'll just load Excel and then have a look at your creation. :-)
Knowledge is power, but only if applied in a timely fashion.
Jerrald
I took a look at it, but it didn't open properly on the page. ( took up all the screen and no min max button )
regards
mark Quittintime
Mark, I'm not sure what to tell you too. I downloaded the file again myself to check and make sure it didn't get damaged or corrupted sitting on my server and it worked for me without a hitch on both Windows and Mac machines. What resoultion is your monitor running at? What operating system and what version of Excel? It does opens up full screen on my Windows machine here but I have the min max buttons right there no problem. If you can tell me a little bit more about you operating environment I might be able to figure out what's going on (might!!).
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Jerrald
I'm running XP with Excell version 5.1.2600. Monitor res is 800 x 600...tried changing the res but it didn't make any difference.
keep up the good work
regards
Mark Quittintime
Mark my first thought on seeing "Excel version 5.1.2" was that Excel 5 didn't support multiple worksheets in a single workbook ( sort of like the problem the MS Works users have) but I checked around and found out Excel 5 was the first version of Excel (back in 93') to support multiple worksheets so that wasn't it. Sooo,... I have no idea what's going on in your case but I'll let you know if I do find out something.
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Edited 4/12/2004 1:33 pm ET by Jerrald Hayes
Jerrald,
I've been lurking here for a couple of years and also at JLC and have found your insights quite helpful. I found you overhead analysis to be virtually identical to my own recent effort. The only exception is that I like to take the OH and profit multiplier back to the hourly wage of the employee. By doing that, you can tweek the nonbillable hours and see the direct correlation on final billing rate.
I found it incredibly enlightening that giving a week of vacation only changes increases your multiplier by .03 to .05 which is less than a $1.00 per hour increase in billing rate. An increase that is not even noticeable in most instances.
I use that multiplier across the board for all my labor catagories and it works very well. The one thing I noticed is that for my business to run most profitably, I must have two skilled or higher wage employees for one unskilled or lower wage employee. This scenario seems to prove most efficient in the field as well. We focus primarily on remodeling and do not do any production work. Your multiplier was very similar to mine. Are those close to your actual numbers? Just a check to see how Austin, Texas compares to Katonah, NY.
Hiker
Hiker I'm not sure if I understand exactly what your saying when you say "The only exception is that I like to take the OH and profit multiplier back to the hourly wage of the employee." Is what you are saying that (on the Billable & Non-Billable Hours worksheet in the Billable Hourly Rates Determined via a Balanced Markup Distribution section) you prefer to apply the Markup Multiplier to the Cost per Actual Hour Worked instead of the
Cost per Billable Hour (or what I call True Cost per Hour)?
re:"I found it incredibly enlightening that giving a week of vacation only changes increases your multiplier by .03 to .05 which is less than a $1.00 per hour increase in billing rate. An increase that is not even noticeable in most instances. " That's actually one of the things I sort of been waiting to see if people would pickup on. Shows the benefits (from the point of view of an employee) of offering a paid holidays and paid vacation really do out weigh their costs (to the employer) in the grand scheme of things. Thanks for bringing that up it's a poignant point.
A minor discrepancy that this spreadsheet doesn't pick up on is that the not all the Non-Productive hours are subject to the full typical worker comp for the employees trade position. The cost of vacation and holiday time is not subject to the WC surcharge at all. Training may of may not be subject to the full WC rate depending on what kind of training it is. Hands on with tools would be subject to WC but classroom type training would have (or should have) a lower WC rate. Company meeting should have a lower WC rate too etc...
re:"
I use that multiplier across the board for all my labor catagories and it works very well. " Whether to use a Markup Multiplier which give you the Billable Hourly Rates Determined via a Weighted Markup Distribution or to use a Markup surcharge which gives you the Billable Hourly Rates Determined via a Balanced Markup Distribution really depends both on the crew makeup (highest wage to lowest wage ratio) and the preferences of the owner. We used a multiplier for years and switched to using a surcharge instead only last year. I'm not even sure most typical everyday contractors would even notice the difference.
re:"The one thing I noticed is that for my business to run most profitably, I must have two skilled or higher wage employees for one unskilled or lower wage employee. " Our ratio is 3:1 but I've been thinking I'd like to see it at 4:1.
re:"Your multiplier was very similar to mine. Are those close to your actual numbers? Just a check to see how Austin, Texas compares to Katonah, NY." Nah the number I used were fictitious and hypothetical and they changed with each version of the spreadsheet I produced to test out the functions to see if they were working. But I would say the figures are on the low side but just within the acceptable range distribution for this region.
When I hear about wage rates in Texas I'm always pretty amazed at how low they are and I hear you folks down there aren't required to carry Workers Comp? I think that's sort of crazy.
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Edited 4/12/2004 11:16 pm ET by Jerrald Hayes
Jerrald, Sorry I have taken so long to respond. Uncle Sam's invoice needed to be paid.
Multiplier
I apply the multiplier to the hourly wage of the employee. The multiplier includes a factor for getting from the hourly wage to the true cost per hour. Yours is a two stage process getting from a wage of $23 per hour to cost of $32 per hour and then to the $34 per hour. It is essentially the same process. I just like being able to utilize a single factor to get my final billing rate.
WC rate
I utilize the highest rate I can anticipate for WC in the factor, simply because I am never certain how the work distribution will be for the year. It is somewhat of a contingency item for me. My WC rate here in Texas range from 8% to 21% of wages depending on the nature of work.
Texas wage rates are low simply because most guys around here do not have a clue as to what it costs to run a profitable company, the abundance of illegal labor, the limited amount of truly skilled labor, the lack of licensing for GC's and builders, and a consumer base that does not want to pay for skilled and quality workmanship. It seems that the large developers, Centex, Pulte, KB etc., are able to drive down what they pay to contractors and that has had a ripple effect to folks who work outside those realms.
Texas WC is a challenge. The state runs the program and as such the high rates are due in part to limited effort to eliminate fraud. State law does not require Sole props to carry WC and does not specifically state that employees have to be covered, but strongly recommends it. That combined with a lack of licensing for GC's or builders means only the liability conscious company carry WC or any other insurance. The consumer is simply not knowledgeable of the situation and does not anticipate the cost associated with running an insured company.
The low to mid range market here is simply not profitable for me. After a handful of projects lost to competitors where their final price was less than my materials cost, I simply decided I was not going to even try. I stick to the higher end, charge for estimates and have been able to avoid that snake pit.
What sort of increase have you noticed when you include health benefits? I have pondered pursuing them, but have not had the time to investige what is available and how much.