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Cost of employee wages as % of total labor collected
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
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4 Replies
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What should the % goal be?
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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 $
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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 -
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
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