Monday, January 12, 2015
Do the Math: Are You Charging Enough for Labor?
Remodeling: There are plenty of ways to lose money in the construction business, but one of the easiest is under-charging for labor. How much you pay an employee and how much you charge for that employee are two very different numbers. In this installment of ”Do the Math,” we look at just how different those numbers really are.
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When I clicked on the article, I thought it would be about independent contractors or other self employed people not charging enough for their own hourly labor when they work for a company or a customer. The perspective of a small business owner was I think more interesting. The fact that business owners, when dealing with clients are accountable for billing for the number of hours that the employee actually works was not something that I had really thought about. I assumed that the owner would charge a certain amount for the job, then pay the employees their own hourly wage. I suppose that this approach is good as it holds the employer accountable to charging the customer the right amount and paying the employees their deserved wage. As annoying it is to take money out of a paycheck for taxes and whatnot, I can understand that it is equally annoying for employers who deal with that for the employees.
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