Key Numbers 101 Series – # 1 Payroll Cost
This series includes 24 Key Numbers posted over 12 months. If you work on getting all of them in the ranges mentioned, your shop should be solidly profitable.
Key Numbers 101 Series – # 1 Payroll CostFor this key number we want to know what percent of total sales is spent on gross payroll for all employees of every type except the business owner.Last month Acme Auto had total sales of $50,000Total gross payroll for everyone except the owner was $12,000$12,000 ÷ $50,000 = 0.24So our key number is 24%When looking at this number for a typical independent shop which is solidly profitable, this number will normally run between 22% and 27%.There is a fill in the blank form for this number in our Business Calculators area available to Premium Members.Definitions:Gross payroll is simply the gross number of dollars that an employee earns, including all incentive pay, before any deductions or alterations of any kind.Example: Joe works 40 hours at $15 per hour which equals $600. He also received $250 in incentive pay, so his gross pay is $850Total sales include all parts, shop supplies, labor, sublet, and tires.#autoshopkeynumbersCopyright © 2016 Automotive Management Network
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