Prevailing Wage Mark-up In Pennsylvania???

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horrorsix

Member
Location
Harrisburg PA
I hope this isn't a stupid question but I have my first (and last) prevailing wage job we're doing in Pennsylvania. The electrician rate is Hourly $29.50, Fringe $21.34, total $50.84. So $50.84 is what I'm paying my guys because I do not offer any insurance or anything. Do I then put my labor mark-up on that $50.84? I bid 15% overhead, 10% mark-up on my jobs which bring that $50.84 to $63.55. Is that right? Is that what I actually bill out to the GC, $63.55?

Just trying to figure out how prevailing wage works.
 

Sierrasparky

Senior Member
Location
USA
Occupation
Electrician ,contractor
Yes I would do that,
However your math is not accounting correct.
Your 10 percent should be your profit. Profit is the percent of all labor, and cost associated with the sale of the project.
So you you should total your costs and then multiply by your percentage you wish to make profit.
so ....
Labor X 15% OH ( total) then X profit ( markup)

Very common misnomer and mistake.
 

gadfly56

Senior Member
Location
New Jersey
Occupation
Professional Engineer, Fire & Life Safety
I hope this isn't a stupid question but I have my first (and last) prevailing wage job we're doing in Pennsylvania. The electrician rate is Hourly $29.50, Fringe $21.34, total $50.84. So $50.84 is what I'm paying my guys because I do not offer any insurance or anything. Do I then put my labor mark-up on that $50.84? I bid 15% overhead, 10% mark-up on my jobs which bring that $50.84 to $63.55. Is that right? Is that what I actually bill out to the GC, $63.55?

Just trying to figure out how prevailing wage works.

Charge whatever you think you can get away with. You just can't not pay your guys the $50.84/hr. Also, you should make sure that there isn't differentiation, such as journeyman, working supervisor, etc. In NJ, if you have only one man he gets the journeyman rate, not the lower apprentice rate. Are you sure that 15% covers your overhead? You are paying 7+% just for his FICA. The rest of overhead has to cover disability and worker's comp, the truck he drives (if you give him one) plus all its maintenance and insurance, and all the costs for your office; rent, heat, light, your bookkeeper/accountant office help, etc. Getting this wrong is how some guys wake up 5 years later having to file for bankruptcy.
 

Sierrasparky

Senior Member
Location
USA
Occupation
Electrician ,contractor
Charge whatever you think you can get away with. You just can't not pay your guys the $50.84/hr. Also, you should make sure that there isn't differentiation, such as journeyman, working supervisor, etc. In NJ, if you have only one man he gets the journeyman rate, not the lower apprentice rate. Are you sure that 15% covers your overhead? You are paying 7+% just for his FICA. The rest of overhead has to cover disability and worker's comp, the truck he drives (if you give him one) plus all its maintenance and insurance, and all the costs for your office; rent, heat, light, your bookkeeper/accountant office help, etc. Getting this wrong is how some guys wake up 5 years later having to file for bankruptcy.
I was so focused on my point about calculations I forgot about the employee taxes and insurance and other employee burden. Even your General liability insurance can go up with increased wages.
 
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