What is your pay structure? Hourly, commission based, etc?

[Jonathan Dulaney]

I'm in the planning stages of forming my company. I'm currently employed in an unrelated field home service company that pays technicians a commission on total sales. It's very effective at controlling costs as employees can't just run the clock and pad their paychecks.

I'm thinking of building a similar pay structure wherein I reserve about 30% of the cost of jobs for payroll. I'm thinking I would pay ground crew hourly wages and then the foreman/climbers would split the remaining cost using some type of calculation factoring in their current rank and position in the company. I'm worried that it's a bit outside the norm for the tree service industry which may scare away good seasoned climbers.

I worked at another tree service years ago and payroll was always a huge issue (that and workers comp rates). I'm open to learn about pay structures out there and see what is recommended that can control costs.

 

[Jonathan Dulaney]

Followup question. Can anyone tell me what percentage of crew payroll comprises your total expenses?

 

[ChoppyChoppy]

I just pay $10/hr. 1099. They give me a bill, I pay it.
No work comp, not needed here till over 5 employees, not needed for contractors.

 

[BC WetCoast]

We pay hourly. Keeping crews from padding hours is a supervisory function. You'll quickly learn which of your crew leaders are efficient and effective workers and who are slow.

For us, a two man crew with truck and chipper (same whether lift truck or chip truck - just simpler calculations) straight labour (without worker comp, taxes etc) would be 22 - 25% of the expected charge out rate.