[RO-Sheen]

I was reading the thread  titled 'New van for stepson' and was surprised to read that alot of you thought 70% was a reasonable amount to pay someone. By the sounds of it the van the stepson has is his own and not his stepdads. Is that correct? If thats the case, fair enough its probably fair. Basically it will be like renting the round to his stepson for 30% of its worth.

I currently work on my own as a self employed but am now considering buying a 2nd van and employing someone to do a round for me. I will supply everything from van, uniform and customers etc. What I want to know what percentage should I pay them on that basis? Hoping it isnt 70% because it will hardly seem worth it as I will have to pay for the van, fuel, tools and water etc out of my 30% cut!

[formb]

I do not pay anything like 70%.

If you work in VAT that leaves a measly 10% to cover everything else.

I believe it goes against my risk assessments to send 1 guy out solo.

I look to have at least 50% of a 2 man van leftover after wages.

[Steve CM]

you cannot run a business with paying 70% in wages.

[Lee Pryor]

I pay my guys 25% of what ever they turn over each day, but as I employ them they have a minimum wage basic. when its all said and done they each earn 20k a year give or take

[RO-Sheen]

Thanks guys.

Lee, Do your guys work as a 2 man team? The reason I ask is if they do for example £200 a day per team, will that be £25 each (25% of £100 each) or £50 (25% of £200 total - Like Form B does)

Do you ever send 1 guy out solo and if not, why not? I notice FormB doesnt for H+S reasons.

Thanks
Adie

[formb]

Thanks guys.

Lee, Do your guys work as a 2 man team? The reason I ask is if they do for example £200 a day per team, will that be £25 each (25% of £100 each) or £50 (25% of £200 total - Like Form B does)

Do you ever send 1 guy out solo and if not, why not? I notice FormB doesnt for H+S reasons.

Thanks
Adie

Also I know from experience that it can get boring on your todd.....

[RO-Sheen]

Thanks guys.

Lee, Do your guys work as a 2 man team? The reason I ask is if they do for example £200 a day per team, will that be £25 each (25% of £100 each) or £50 (25% of £200 total - Like Form B does)

Do you ever send 1 guy out solo and if not, why not? I notice FormB doesnt for H+S reasons.

Thanks
Adie

Also I know from experience that it can get boring on your todd.....

Good point! I have been working on my own for the past 5 years. I dont find it boring, because it was my own business but would imagine my employees wont be as entusiastic!
Another question if working in an area where one person can do £200 a day, how much would a 2 man employed team do (bearing in mind I wouldnt expect them to work as fast as the business owner!) I am guessing it wont be twice as much as a one man operation

[formb]

Thanks guys.

Lee, Do your guys work as a 2 man team? The reason I ask is if they do for example £200 a day per team, will that be £25 each (25% of £100 each) or £50 (25% of £200 total - Like Form B does)

Do you ever send 1 guy out solo and if not, why not? I notice FormB doesnt for H+S reasons.

Thanks
Adie

Also I know from experience that it can get boring on your todd.....

Good point! I have been working on my own for the past 5 years. I dont find it boring, because it was my own business but would imagine my employees wont be as entusiastic!
Another question if working in an area where one person can do £200 a day, how much would a 2 man employed team do (bearing in mind I wouldnt expect them to work as fast as the business owner!) I am guessing it wont be twice as much as a one man operation

That all depends mate, there are too many factors to consider. If you get a good number 1 with a keen number 2 on the right pay, they will double a 1 man set up. I have employed 150+ over the years and only had the right mix a few times.

I have found that the best set up is 2 man, tried more and it ends up spaghetti junction!

Being the owner does not mean you'll be the most productive, I can't get anywhere near my best guys. (mind you I am sat on here talking to you guys!!)

[supernova77]

I have a guy who works for me on his own, on average 3 days a week. He gets 55% of a days turnover. He uses my van and equipment.

Andy

[Matthew Bateman]

I have a guy who works for me on his own, on average 3 days a week. He gets 55% of a days turnover. He uses my van and equipment.

Andy

Thats a bit more like it.

At least he's treated like a human being.

25% my arris 

£20,000 wage paid at 25% equates to £80,000 turnover per man.

Leaving 60K every year per man.

[Paul Coleman]

When I've subbed work from others, I've taken 60%.  That's with me supplying van, poles, water etc.  That's 60% after their VAT calculation.  It only became an issue for me a while back because one of the sources of my subcontracting wasn't VAT registered.  When that source of work became VAT registered, the VAT was only put on about half of the (domestic) work due to the fear of losing the customers.  This effectively cut my money by about 9% over all (17.5% x half the work).  I tolerated this (with grumbles) and just upped my pace to try to make it up.  With the VAT going up by a further 2.5% soon, I decided that I won't be doing this beyond the end of the year.  I've already taken a (approximately) 9% cut and I would have had to swallow a further 2.5% after January 1st.
Making this decision could leave me a bit light on work next Spring but I hope to have canvassed enough by then to make up most of the shortfall.  There won't be an issue during Winter because, even without the subbed work, it's tricky getting around it all.
I suppose if it had been that rate from the start I may have swallowed it more readily but it's more difficult when you get used to one rate and then it reduces.

I have no issue with the contractor.  He's a decent guy and I fully understand his predicament.

Anyway, when you decide on a percentage, whatever is agreed to needs to be thought through if VAT is, or may become, an issue.  This can even be the case for commercial work if the end customer is using the simplified form of VAT accounting (i.e. they can't claim it back).

[Sunshine/Cleaning]

I have a guy who works for me on his own, on average 3 days a week. He gets 55% of a days turnover. He uses my van and equipment.

Andy

Thats a bit more like it.

At least he's treated like a human being.

25% my arris 

£20,000 wage paid at 25% equates to £80,000 turnover per man.

Leaving 60K every year per man.

I pay my guys 25% of what ever they turn over each day, but as I employ them they have a minimum wage basic. when its all said and done they each earn 20k a year give or take

Thats some going. over £300 per man per day consistant over 48 weeks. Are they human?

[RO-Sheen]

When I've subbed work from others, I've taken 60%.  That's with me supplying van, poles, water etc.  That's 60% after their VAT calculation.  It only became an issue for me a while back because one of the sources of my subcontracting wasn't VAT registered.  When that source of work became VAT registered, the VAT was only put on about half of the (domestic) work due to the fear of losing the customers.  This effectively cut my money by about 9% over all (17.5% x half the work).  I tolerated this (with grumbles) and just upped my pace to try to make it up.  With the VAT going up by a further 2.5% soon, I decided that I won't be doing this beyond the end of the year.  I've already taken a (approximately) 9% cut and I would have had to swallow a further 2.5% after January 1st.
Making this decision could leave me a bit light on work next Spring but I hope to have canvassed enough by then to make up most of the shortfall.  There won't be an issue during Winter because, even without the subbed work, it's tricky getting around it all.
I suppose if it had been that rate from the start I may have swallowed it more readily but it's more difficult when you get used to one rate and then it reduces.

I have no issue with the contractor.  He's a decent guy and I fully understand his predicament.

Anyway, when you decide on a percentage, whatever is agreed to needs to be thought through if VAT is, or may become, an issue.  This can even be the case for commercial work if the end customer is using the simplified form of VAT accounting (i.e. they can't claim it back).

Thanks Paul for pointing it out. Im not VAT registered at the moment but will speak to my accountant about it and tell him about your experience. Cheers mate

[monkeyboy950]

Only folk I have helping me is mates who I can trust,usually they do £200 a day so I pay them £100,don't take the mickey as when I 1st started out folk were fair with me and helped me out with free work and paying me a fair wage for the day.

[MNWC]

Used to employ on 50 % basis

But turned out he was rushing each job to make more money and getting complaints.

So i put him on an hourly rate seems to work out better

Worth thinking about.

[formb]

I have a guy who works for me on his own, on average 3 days a week. He gets 55% of a days turnover. He uses my van and equipment.

Andy

Thats a bit more like it.

At least he's treated like a human being.

25% my arris 

£20,000 wage paid at 25% equates to £80,000 turnover per man.

Leaving 60K every year per man.

I don't appreciate the tone of that.

Also you are thinking about that backwards.

100%

-50% wages

-20% VAT

Leaves 30% to cover

Vehicle, Vehicle insurance, fuel, admin costs, employers paye, postage, bad debtors, equipment, telephone, rent, rates, electric, heating, bank charges, public liabilities insurance, advertisement, mobile phone costs, stationary, licences, professional fees, vehicle maintainance, non direct wages holiday pay and uniforms.

All of that comes before directors wages.

[Sunshine/Cleaning]

I pay my guys 25% of what ever they turn over each day, but as I employ them they have a minimum wage basic. when its all said and done they each earn 20k a year give or take

I gthink he means 25% of their turnover which to get £20k would be a day rate of £330 per man.

Unless he means 25% per man per pair??  ie 50% of days takings.

[richard jagger]

It would not be wise to pay a commission basedon turn over as if expences go up it will make it difficult to make ends.First thing to come off must be vat as you cannot pay a commission on a tax then costs and then ony commission to your worker.

[formb]

It would not be wise to pay a commission basedon turn over as if expences go up it will make it difficult to make ends.First thing to come off must be vat as you cannot pay a commission on a tax then costs and then ony commission to your worker.

I agree and do not pay on a strict commission basis.

Hourly rate with performance related bonus.

Calculated to equate to:

I do not pay anything like 70%.

If you work in VAT that leaves a measly 10% to cover everything else.

I believe it goes against my risk assessments to send 1 guy out solo.

I look to have at least 50% of a 2 man van leftover after wages.

[Matthew Bateman]

I don't appreciate the tone of that.

Dont you?

I guess exploitation would make some overly sensitive.


Lets hope your boys dont come on here and find out what they could earn compared to what they do actually take home.