I posted this thread upstairs in the wrong place, in “construction techniques.” It belongs here.
How should a cost-plus billing be handled when all carpentry labor is done by me and direct-pay employees, and all other elements are subcontracted?
By my way of thinking, the billing for labor should bundle gross pay, payroll tax, and insurance (workers comp), but no overhead component. The client should feel that is in the “plus” part of cost-plus.
So if carpenter “A” is paid $25.50 hourly, we bill at ($25.50 + all applicable payroll tax + W.C. premium), right?
And what about me? There is no payroll tax or W.C. component. What do we do here?
And what about my truck, when used to run to the yard for materials? Mileage times about $0.39 per mile?
Replies
For the truck, could you get the cost of a weekly or monthly rental from Hertz and use that?
Whenever you are asked if you can do a job, tell'em "Certainly, I can!" Then get busy and find out how to do it. T. Roosevelt
I charge $50/hr for my one ton pickup with a driver. I'm honest and don't pad it at all and have never had a complaint. Whether it was for dump runs or picking up materials.
Bob, every contractor I've worked for has a rate for each guy, or each classification. It's usually about 2x the hourly wage that person earns. There is some profit, or overhead, or both, built into the rate. Then, a markup for profit and overhead is added to the invoice, including the labor rates. So, a guy earning $28 per hour goes out at $60 per hour and when the invoice is written with a 25% markup he ends up costing $60 x 1.25 or $75 per hour. That's the way I do it.
You could also include the markup in the rate and only show a markup on subs and materials on your invoice. You have to decide which approach is more palatable to your clients, and how much you want to try to justify each cost to them. Do they really understand labor burden and all its components? Can you really expect your clients to understand your business and the costs of running it? Hard questions.
Find Jerrald Hayes' markup worksheet and use it to find the actual cost of your men.
EDIT: you charge as much or more for yourself as the top guy on your crew.
Edited 6/2/2004 12:12 am ET by davidmeiland
whos making $28 an hour?
Lowest paid man on my framing crew is $30.00
That's the going rate where I'm at.
GOOD CARPENTER IN NEW JERSEY costs about $35.00 an hour
bob... when you get to RhodeFest , we'll tell you exactly how to account for your time..
here's a hint... if not for you ....... nothing happens... just keep reminding yourself.... YOU are the most important guy on the job.... so YOU are the one who has to get paid... you decide on the rate... BTW.. i bill everyone at the same rate
and it includes... (RATE +burden+overhead+contingency+profit)
Mike Smith Rhode Island : Design / Build / Repair / Restore
You're right Mike