Ever wonder why some remodel companies charge 25% more than others for building your deck?
Let's break it down and shed some light on the real costs behind those numbers. When a contractor gives you a bid that's higher than others, it doesn't necessarily mean they're greedy. In fact, it might be quite the opposite—they're committed to providing a fair wage and a good lifestyle for their employees, ensuring you get a top-quality product in return.
Employee Wages and Costs
At my company, our commitment to quality starts with paying our employees what they deserve:
Carpenters: $36 per hour
Apprentices: $23.50 per hour
But wages are just the beginning. Let’s look at the full picture.
Breakdown of Additional Employee Costs
Payroll Taxes
Social Security and Medicare (FICA): 7.65% of wages.
Federal Unemployment Tax (FUTA): 0.6% on the first $7,000 of wages.
State Unemployment Tax (SUTA): Varies, around 3% on average.
Workers' Compensation Insurance
About 3% of wages for construction workers.
Benefits
Health insurance, retirement plans, and other benefits typically add 20-30% to the base wage.
Liability
Around 1.5% of the total payroll to protect against accidents and damages.
Vehicle Expenses
Approximately $1.50 per hour worked for fuel, maintenance, and depreciation.
Calculation of Total Employee Cost
Carpenter Cost Per Hour
Base Wage: $36.00
Payroll Taxes:
FICA (7.65%): $2.75
FUTA (0.6%): $0.22
SUTA (3%): $1.08
Workers' Compensation (3%): $1.08
Benefits (25%): $9.00
Liability Insurance (1.5%): $0.54
Vehicle Expenses: $1.50
Total Cost Per Hour for Carpenter: $52.17
Apprentice Cost Per Hour
Base Wage: $23.50
Payroll Taxes:
FICA (7.65%): $1.80
FUTA (0.6%): $0.14
SUTA (3%): $0.70
Workers' Compensation (3%): $0.70
Benefits (25%): $5.88
Liability Insurance (1.5%): $0.35
Vehicle Expenses: $1.50
Total Cost Per Hour for Apprentice: $34.57
Investing in Quality and Employee Well-being
We believe in providing a great workplace for our employees, offering fair wages and benefits to ensure a good lifestyle for their families. This commitment reflects in the quality of work we deliver. Higher bids often mean:
Better Trained Workers: Companies investing in training and development ensure their workers are skilled and up-to-date with the latest techniques.
Higher Quality Materials: Using premium materials can increase costs but ensures the longevity and durability of your deck.
Comprehensive Insurance Coverage: Protects both the company and the client, offering peace of mind.
Higher Overhead Costs
Companies with higher overhead costs might charge more to cover these expenses. Overhead includes:
Office Rent and Utilities: Essential for day-to-day operations.
Administrative Staff Salaries: Necessary for handling logistics, customer service, and project management.
Marketing and Advertising: Helps attract new clients and grow the business.
Permits and Licensing: Ensures compliance with local regulations.
Why a Higher Price Can Mean Greater Value
When you choose a contractor who charges more, you're not just paying for labor and materials. You're investing in a team that values its workers, ensuring they are well-compensated, trained, and motivated to deliver excellent work. This dedication translates into a better-quality deck, built to last, by professionals who take pride in their craft.
So next time you see a bid that's 25% higher, remember, it might just reflect a company's commitment to quality and fair treatment of its employees. By choosing such a contractor, you're not only investing in a beautiful and durable deck but also supporting a business that values its people.
Jacobe Palmiter @JCS Construction Services
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