OH

horsegoer

Senior Member
Location
NJ
Occupation
Estimator
Curious for those of you that have business with more than 5 electricians what % your overhead runs...approximately
 

Fred B

Senior Member
Location
Upstate, NY
Occupation
Electrician
Generally speaking an employer carrys about 20% burden on an employee's earnings. How that adds into the additional overhead of an employer and whether they carry health and retirement benefit not considered into that percentage.
Are you considering impact of adding employees? Or simply trying to judge if you are marking up competitively?
 

brantmacga

Señor Member
Location
Georgia
Occupation
Electrical Monke
Generally speaking an employer carrys about 20% burden on an employee's earnings. How that adds into the additional overhead of an employer and whether they carry health and retirement benefit not considered into that percentage.
Are you considering impact of adding employees? Or simply trying to judge if you are marking up competitively?

just as an FYI to the OP, my labor burden is 25%. My OH figure is a straight % of total direct + indirect costs.

example on labor only....

Employee A earns $30/hr, w/ burden its $37.50/hr, + $5/hr fringe = $40.50, + payroll tax = $43.60, + OH = $48.83/hr total
 

gene6

Senior Member
Location
US
Occupation
Electrician
just as an FYI to the OP, my labor burden is 25%. My OH figure is a straight % of total direct + indirect costs.

example on labor only....

Employee A earns $30/hr, w/ burden its $37.50/hr, + $5/hr fringe = $40.50, + payroll tax = $43.60, + OH = $48.83/hr total
Help me understand what the difference between burden and OH is?
And when you calculate payroll tax would you not just include the 30/hr?
You surely dont pay payroll tax on the 'burdan'
Sorry i know nothing about accounting but am interested.
And where you you account for the van + gas? is that variable costs?
Thanks
 

brantmacga

Señor Member
Location
Georgia
Occupation
Electrical Monke
Help me understand what the difference between burden and OH is?
And when you calculate payroll tax would you not just include the 30/hr?
You surely dont pay payroll tax on the 'burdan'
Sorry i know nothing about accounting but am interested.
And where you you account for the van + gas? is that variable costs?
Thanks

I'm not an accountant; I just run the numbers the way the accountant says to.

Labor burden includes things like PTO, sick days, health insurance, etc.... Not every employee gets equal amounts of PTO, and not all of them opt-in to the health insurance, but the average across the board is 25%.

The half of payroll tax the employer pays is not included in the employees base hourly rate. You do pay payroll tax on burden because its part of the paycheck; sick days, PTO days, etc, that goes in like regular paycheck hours.

I account for fuel and maintenance within each jobs direct cost. I account for the vehicle payments, office staff, the office mortgage, etc in overhead.
 

gene6

Senior Member
Location
US
Occupation
Electrician
Gotchya makes sense, If I am not mistaken my health insurance gets taken out of my check 'pre tax' and the bosses here get all kinds of tax breaks or write-offs on our health insurance. I remember there was a big fuss about it many years ago when healthcare changed.
I know in our accounting each van is considered a 'department' so if a team of 1-3 people are working a job out of a particular van, supplies , tools , gas etc has to be filed under that vans 'department'.
 

brantmacga

Señor Member
Location
Georgia
Occupation
Electrical Monke
insurance comes out pre-tax, but for simplicity of pricing work, I just leave payroll tax on the entire labor+burden rate. not everyone has the same plan, pays same premium etc.
 

horsegoer

Senior Member
Location
NJ
Occupation
Estimator
just as an FYI to the OP, my labor burden is 25%. My OH figure is a straight % of total direct + indirect costs.

example on labor only....

Employee A earns $30/hr, w/ burden its $37.50/hr, + $5/hr fringe = $40.50, + payroll tax = $43.60, + OH = $48.83/hr total
What's in your burden and fringes? Thank you!!
 

brantmacga

Señor Member
Location
Georgia
Occupation
Electrical Monke
What's in your burden and fringes? Thank you!!

burden is health insurance, 401k match, PTO, etc. etc... Fringes is where I account for things like company phone, truck etc.

When I bid a job, I account for all of the mileage related to that job within my cost. I use fringe benefits to account for the additional mileage of guys driving them home. we have a lot of trucks on the road, so its just an average across all labor hours.
 
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