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Wednesday's Ask the Experts: Labor burden charge

March 21, 2012
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Wednesday''s Ask the Experts question from a cleaning professional on the International Custodial Advisors Network (ICAN) "Ask the Experts" page: I''m looking at submitting a bid for cleaning a car dealership in the central Texas area. It''s 19,000 sq ft. After looking through all the comments I''ve notice a "labor burden charge". What is this?? And is it a standard 20-22%?? I like the price after the charge, but doubt the dealership will. This is my first dealership and I decided to price as a per-day per clean. It''s all the standard sweep, mop, dust, polish, trash removal of all areas, all appliance and vending cleaning, quarterly buff/finish floor care and quarterly steam clean, as well as daily spot care of stains, light fixtures as needed, spot clean all interior glass and a quarterly clean of all interior windows My estimate included, 2 people X 4 hours X $15.00 = $120.00 2 people X 4 hours X $25.00 =(2 owners) $200.00 The dealership is thinking about 6 days a week If we just use some easy numbers, $120 X 30 days = $3600 and then you tack on the labor fee of 20% an additional $700+ This equals to $10,000+ per month is that not a lot?? I can''t feasibly think to do it for much less than that though....

The answer:

Let’s try to get your thinking on an even keel. To start, what is termed “labor burden” is simply the money that must be calculated, based on payroll, to cover things such as Worker’s Compensation, Unemployment Insurance, FICA, Social Security and Medicare matching by the employer, and any other labor related expenses that you, as a business person, must pay in connection with your employees’ paychecks. To figure it accurately, you need to add up all these costs per dollar. It may be 18% or 22% or somewhere in between, but you need to use your figures for your location there in Texas. Whether this dealership likes this burden being part of the proposal cost is immaterial because the government agencies involved with labor, such as the IRS, insist you pay these ... — Lynn E. Krafft, ICAN/ATEX editor

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