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  • Cost of employee wages as % of total labor collected

    Posted by roebigd on January 17, 2014 at 7:49 am

    I want to know what my total cost of employees is compared to the total amount of labor collected for the week

    Example : just did a one week calculation   10,300.95 in total labor charges collected

    Gross wages paid out  $4719.80

    My match of FICA and Medicare  $354.69

    Which figures out to  51% of the labor charges collected go to wages of everyone producing the labor except my wage  as an  owner

    How does this compare with others total payroll of the techs and service writers of your shop

    Greg McConiga replied 8 years, 5 months ago 4 Members · 4 Replies
  • 4 Replies
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  • roebigd

    Member
    January 17, 2014 at 7:59 am

    What should the % goal be?

  • Tom Ham

    Member
    January 19, 2014 at 5:11 am

    Total tech payroll not including tax matches or benefits 26 to 30% of labor $

    Total all staff payroll, techs and non techs, except owner not including tax matches or benefits 44 to 54% of labor $

  • trannyman

    Member
    January 23, 2014 at 10:21 am

    I was always under the impression it should about 20% of the job ( or gross sales ).

     Basically 20-20-40-20 rule. 
    20% Cost of goods / 20% Production labor / 40% General operating expenses ( includes non- production payroll ) / 20% per tax profit. 

    If one area is off  that’s the area to focus on fixing.

    Mike
  • Greg McConiga

    Member
    January 26, 2014 at 8:18 am

    The classic model for a typical independent shop: gross profit on labor, 70% (tech’s wage is 30% of labor produced.) Gross profit on parts, 40% (divide parts cost by .6 or multiply parts cost by 1.67 because it’s gross profit not cost plus 40%)

    Personnel expense as a percent of total gross profit (parts and labor gross, total) 40%. Includes all benefits for all employees, non-tech personnel payroll, all payroll matches, office personnel, runners, porters, drivers, etc.

    Semi-fixed expense 15% of total gross profit (training, phone, data services, warranty work, travel, training, advertising, outside services like trash, etc, memberships, dues and subscriptions to name a few…)

    Fixed expense 15% of total gross profit (rent, amortized/leased equipment, repairs to real estate, heat, power, taxes, depreciation and insurances to name a few…)

    Net profit 30% of total gross profit

    Best,

    Greg