What are you doing when billing direct labor on a cost-plus job?
And how about billing for your own labor?
What are you doing when billing direct labor on a cost-plus job?
And how about billing for your own labor?
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Replies
of course I bill for my own labour!
My labour rates have the markup and profit built into them. The plus percentage of markup I only add to subs and supplies.
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I bill my own labor the same as I would any other employee.
I'm small, so it's easy right now to keep things simple.
I bill the guys (me included) as either,
1) carpenter
2) carpenter's apprentice
3) unskilled labor
4) 1 ton truck and driver
Some guys can be more than one thing....but not at the same time! It's simple and keeps it clear for both me and the customer. I don't do too many cost-plus agreements, but I'm finding that they usually work out quite well. I guess I should be charging more on my set amount contracts.
Some guys, like Mike Smith I believe, bill everyone at the same rate...including himself. He's got a crew that's well rounded enough to pull that off. It's a good goal to keep in mind though when I'm hiring.
Maybe over simplified....but I hope it helps.
I bill at 50% over gross wages for employees. Rates for my time are a little higher than my highest paid guys. I also charge a fixed fee of 12% of estimated costs on t&m jobs, which are about all I do.
dan.... 50% will just barely cover your Labor Burden... it will not contribute anything to your Company Overhead or Profit..
Rate x 1.5 = COST of Labor....
we can argue about a few percentage points but the main thing is that you are not covering your costs with those ratesMike Smith Rhode Island : Design / Build / Repair / Restore