Behind the Bill: How a Handyman Hour Costs $60!

Our basic labor rate is $60 per hour. While professional property managers realize that this is on the low-end for licensed, bonded skilled labor in the Puget Sound, I sometimes hear from owners something to the effect of, “I’m a CPA and I don’t even make $60 an hour!” Of course, I’m sure that CPA’s company bills her out at $150 an hour, but she makes a good point- it does seem expensive!

Here’s a breakdown of a $60 labor hour in the State of Washington:

• $20 Technician’s hourly wage- Yes, you can get labor for less, but you get what you pay for. It behooves everyone to have truly skilled labor.
• $2 Mileage- This is just an average per hour mileage rate. I pay $.50 per mile to my employees when they use their own vehicles.
• $2.96 Washington State L&I- This is the hourly rate our company pays for workman’s comp insurance.
• $6.29 State and Federal Taxes- This includes the myriad of unemployment taxes, medicare, B&O, etc.
• $4 Amortized cost of consumable materials, tools, etc
• $7.63 Amortized cost of “support”- This is for the office staff to answer calls, communicate with clients, prepare the bill, cost of the software we use, etc.
• $5.44 Amortized cost of “overhead”- This is the cost of doing business such as paying insurance & bonding premiums, licenses, offices, marketing and other operational costs.

Total cost is $48.32 per hour! Of course, there are a lot of hours I can’t (or don’t) bill for and this comes straight out of the profit. After it is all said and done, there are little drips that come out of the remaining $11.68 “profit”.

Most contractors for larger projects make up some of their additional costs by charging for things such as “mobilization/de-mobilization”, a 15-20% flat charge to cover overhead, materials management, project management, etc. And we all rightfully charge 20-40% premium on materials because afterall you’re paying us to know what type of materials to use and plus, we often negotiate lower prices with our vendors anyway, so our markup turns out to be a wash for the client.

And yes, you could go to a one-man show type of guy who has less overhead and pay him $35-40 per hour directly. However, you’re at the mercy of his schedule, he can’t deliver the communication and accountability our clients expect, if something happens to him there’s not another person to pinch hit, he may not know landlord/tenant laws--- and it could cost you in the end because when Guy In A Truck doesn’t have a tool or the knowledge to finish a job, you’ve got to call someone else in to finish the job!

Obviously, I make money most of the time otherwise I would just close my doors and do something else. It’s a constant dance of refining and retooling the way we do things so that we can continue to deliver