# What are you guys paying for your labor crews?



## MyRoofGuy

Hi guys,

I was interested in your take on what is a fair price to pay your roofing crews for the R&R for a roofing job per square... ie. one story vs. two story... steep charges on 8/12+ pitch... what do you pay for their dumping of old shingles etc.? I am in Charlotte, NC. Thanks for your time in advance.

MyRoofGuy :thumbup:


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## Flatdecker

Sorry we pay hourly here and do not sub out. I know of companies paying subs around 60-65sq labour for 1 layer and 70-75sq labour for 2 story....assuming 1 layer 8/12...extras for valleys, chimney, difficult access etc. this is here in ontario...hope this helps a bit.


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## Acubis

*Profitable way to pay*

One of the most profitable and productive ways is to pay Piece Rate employees.

2 Layer Tear off under 8/12 ReRoof = $40/square +10/square over 8/12. +25/square if require lifts to roof.

Average 4 man crew on walker for most experienced roofing crews that have all well seasoned roofers. 22 squares a day Average.

Sub pay jumps $20/square.

www.researchroofing.com


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## Roofmaster417

I saw your post on another site.I noticed you might not have gotten the reception you were looking for and moved on.I pay my subs from $35-$50 per square for a 5/12 single layer.Up north they pay more and to the south they may pay less.Steep and multiple stories gets you more.If I was wanting another sub-crew I would ask them what they felt was fair.I would consider these key points when considering a price per square.

1.) *References*- at least 3 of the most recent jobs completed.(Addresses,phone numbers etc. and CHECK THEM OUT.)

2.)*Equipment*-Dump trucks,trailers,pickups,ladders,compressors etc.

3.)*Knowledge*-How long have they been roofing,are they limited on ability?Can they properly install multiple roof systems?

4.)*Appearance*-Do they look like they crawled out from under a rock?Some may dispute this but cleanliness is important.All my guys stay groomed,showered and change clothes daily.They represent you and your company so I would not accept anything less.But thats my opinion.


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## Grumpy

Paying by the piece should reflect real world earnings or the subs will figure out a way to steal from you and make what they need to make. I'm not going to tell you what I pay or what you should pay but consider this formula...

If you were to legitimately hire an employee what would it cost YOU? This is your starting point and you can not in all honesty pay anything less or you are forcing the sub to cheat. The sub will cheat you or their insurance or taxes or all 3. 

What is their vehicles and equipment and other over head worth per day and if you want to break that down into a square, how many squares can they install per day? 

What is a fair profit margin for a business owner? YES I said profit, deal with it!

So here is a formula...

labor + burdens + over head + profit / squares per day = $$$ per square.


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## RemStar

I screwed up and set my per sq rate for peice work at $55 per sq. for anything up to 8/12. With burden this works out to be around $70 per sq. A more fair rate would be around $45.00. Peice work in my area goes for around $70 a sq... which is obviously much less stress for me. I am not sure what to do yet. Any Sujestions


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## Grumpy

Remstar are you hiring subs without insurance and then paying their burdens? If so you need to stop that and hire only subs who are fully insured and sign you as additionally insured on their policies. 

Make your subs get their own insurance.


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## Slyfox

Over the past decade I went from a business owner to a sub contractor so I am familiar with both fields.
Grumpy is giving you good advice, I'm not the cheapest sub in my area, but even at my higher pricing structure I'm still cheaper than working a crew of employee's and the contractor/s I sub work from have the piece of mind that they won't be left standing alone if a problem would arise.

My insurance covers me, anyone working with/for me and the structure/s on which I'm working.

By far the majority of "insured" subs are only insuring themselves.
Workers are paid 1099's, thus are not listed on the subs insurance coverage.
Workers Comp is a "right to work account" not covering anyone, but for a few dollars a year it gives the sub a Certificate so they have the right to work but they agree they will/can not sue if they get hurt.
But, that agreement only covers the sub "owner" not the people working for them. The people working for them can and will still sue if they get hurt. Sue their boss, you and the home owner.


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## RemStar

Grumpy said:


> Remstar are you hiring subs without insurance and then paying their burdens? If so you need to stop that and hire only subs who are fully insured and sign you as additionally insured on their policies.
> 
> Make your subs get their own insurance.


 
No I am hiring employees, create crews and paying them peice work.
I have not hired any subs yet, But since my peice rate is high once I include burden it is as if I am paying more than what hiring subs would cost me...plus they are using my truck and trailer and compresssor, insurance, getting vacation pay...etc. I was thinking I should impose a lower peice rate... but I know reducing thier guys wages will not go over well.

I was thinking about hiring subs this year.... Do subs also have to pay gst on services provided?


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## Grumpy

Personally speaking Remstar, i think you are overpaying your EMPLOYEES if you are covering their burdens, providing equipment, and paying $55 them a square. I've spoken with many peopel throughout the years who pay their real employees byt he piece, but none have paid as high as you. Recently I spoke with one person who wanted $45 a square my insurance, his tools. Even that was high in my opinion.

This really goes back to labor rates and how many squares can be installed per day/ per hour etc... An ez walk roof I budget 30 mins t.o and 30 mins install plus detail. Therefore if I wanted to pay a man $20 an hour, the most I could pay a square on this fictional job would be $20 a square plus detail. if it's steeper, more layers, more difficult etc, the piece work rate should be higher. At the end of the day the guys have to make money, but they shouldn't be making more than the business owner. At the end of the day the piece work rates have to reflect what they might earn hourly, or even just slightly more than they'd make hourly if working elsewhere. 

If at my burden rate for insurance and taxes I were paying let's say 100% markup on wages to cover uncle sam's pockets and the insurance man's pockets... Simple math could be to take what I'd pay a sub and reduce that by half. However this does not take into account the vehicular and equipment overhead. So even if you are paying your employees half what you'd pay a sub you're still not ahead. However if your burdens are quite double wages (because IL has a real real high WC premium of 42%) then maybe you would be ahead... but you have to know your numbers. My numbers don't matter.

I've paid hourly, by the piece, and used subs. I've runt he gambit. 


Another thing to consider when paying EMPLOYEES by the piece is the IRS and their rules regarding over time and tracking of hours. Even if you are paying by the piece, if the guys are working over time you still have to pay them for over time and this is something you would want to discuss with your accountant. because of this I developed a weird hybrid minimum wage plus piece work bonus system. It was never implemented, but it did satisfy the IRS rules, plus allowed me to control costs within reason because the bulk of their earnings would actually come from bonus.

It loosely worked like this... Let's say you had a 4 man crew. Pay the helper $7.85 which I think is IL minimum wage. paye the journey men $9 each and pay the foreman $12. Then come up with a per square bonus, like maybe $15. Ok so at the end of the 20 square job lets say each may worked 10 hours, you'd pobviously pay them their hours, then you'd take the $15 x 20 squares / 4 workers = bonus per worker. What ever numbers you input here are for you to choose. Certainly don't use mine.

Like I said I never implemented it because it would be a little confusing for my payroll people. Plus my workers wouldn't really know what they were earning and at the end of the job I wouldn't ever want to fight with someone about how much they should make. That's just bad for everyone involved... 

So I decided I would pay hourly employees for repairs and odd jobs, and sub out all the installations to fully insured sub contractors. I did this because subbing repairs is tricky and every job I paid hourly, ended up taking twice as long as it would had I paid by the square.

One dousche bag even said to me one day, when I was considering paying my employees by the piece, "Well if you paid by the piece you can be sure I'd bring it in on schedule." WTF?! He just admitted to me he was milking the clock. I seriously fought back an urge to hit him in the face. I was silent for a few seconds and clenched my fist tight under the desk and my production manager said I got beat red in the face. When someone admits to me, all be it unknowingly, that they have been stealing from me I get very very angry. And yes I do need anger management, he was lucky (and so was I) that a fight didn't start that day. 

I'm a fair guy, but I expect people that work for me and with me to be fair to me as well. I have no tolerance for those that work for me and are only in it for themselves. It's gotta be a team mentality, and it seems like very few workers care about the "team" anymore.


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## Grumpy

At this poitn Rem Star I would sit down with your accountant, well maybe not until tax season is over, but take the time to sit down with him before the season moves into full swing; and get his opinion. Chances are likely he will encourage you to pay less. 

Then sit down with your employees withy graphs and spreadsheets and show them. "I'm paying you this much,a fter burdens it's costing me this much, if I were paying a sub it would cost this much. I'm bleeding money and I can't keep doing this. Therefore I propose to pay this much." Chances are likely some won't like it and maybe even quit, chances are likely they won't make as much as you've been payign anywhere else. But this is a business and it's good to be nice to your employees, but if you are not making money then you are not being nice to yourself nor your family and soon you will be out of business and then nobody makes any money even the employees. 

if they are fair, they will stick around because chances are if they are fair they know you are over paying. If they are not fair, look at this as a good thing and they will leave and you never really wanted them in the firt place because they were in it for themselves only and not for the "team".


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## RemStar

Ha well lots said there but great input. Right now in regards to evertime I had everyone sign a release that said they would be paid a max of 88 hrs every 2 weeks and all additional hrs would be banked for the next pay period...Basically that no overtime would be paid at X1.5 . I have been mulling it over all winter because I personally know the wages are high... but the work has been great so I dont want to wreck a good thing over a couple bucks nessisarily. My burden on labour is 32% so it works out the crew is getting 72.60 a sq. I am the accountant...and know I am making money paying them this.... But I always want to be making more money....

I dont nessisarily think paying a sub crew $75 a sq that I would be that much farther ahead.


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## vtroofing

I cannot see how anybody here can claim to be all about quality and use sub contractors, paid by the square means get it done and move on, f#@k it attitude. 

Those that do provide the quality will soon be your competition and heres why: 

In VT you cannot use subs unless that sub is used by more than one contractor otherwise he/ she becomes employee unless it is a trade other than your own.

Insurance coverage must be equal to your or it doesn't count (You pay all withholdings and insurance).

Finally to make it it that much more of a reason to be THE MAN this State forces all subs to register with the State as a business. Why not be the man?


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## Grumpy

If you do not have a good lawyer and good accountant you are doing yourself a great dis-service. Classic case of penny wise and dollar foolish. Even if you are doing the day to day finances it's good to have an accountant look everything over twice a year to ensure you aren't missing obvious mistakes plus can discuss these topics about wages and earnings and overtime... banking hours sounds totally illegal for me but what do I know I am not an accountant. 

Around here you'll find subs cutting their own throats for $60 a square for a 1 layer rip. 75 a square isn't unheard of for a great crew, however in your 72 number keep in mind that doesn't include trucks, gasoline, equipment, etc... Your 72 is not 72, it's actually higher. 

If you can afford to pay them what you are paying them, if you are selling work based on that price and you are earning a comfortable living for yourself and not working 60+ hours weeks yourself then don't change anything. However if your foreman is making more than you, I'd suggest rethinking your structure; afterall you asked your question for a reason. There must be a reason.


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## Grumpy

vtroofing said:


> I cannot see how anybody here can claim to be all about quality and use sub contractors, paid by the square means get it done and move on, f#@k it attitude.
> 
> Those that do provide the quality will soon be your competition and heres why:
> 
> In VT you cannot use subs unless that sub is used by more than one contractor otherwise he/ she becomes employee unless it is a trade other than your own.
> 
> Insurance coverage must be equal to your or it doesn't count (You pay all withholdings and insurance).
> 
> Finally to make it it that much more of a reason to be THE MAN this State forces all subs to register with the State as a business. Why not be the man?


 I understand your logic but disagree whole heartedly because there are exceptions to every rule. You CAN get quality work from a subcontractor, but it's not the norm. It all comes back to training and setting expectations upfront, then have checks and balances in place to ensure those expectations are met. This is true regardless if you use subs or employees. 

Anyone swinging a hammer for you must understand what you expect from them, not only for a finished product, but step by step. Like a cook book in a kitchen, we should all have production manuals. Maybe simply use one supplied by our preferred manufacturer like the Shingle Applicator Manual, or maybe put together a collection of step by step pictures or video you use for training purposes. That's setting the expectation.

Then you must ensure that those expectations are being met. This has to do with spending time on the job site. Preferrably at setup to discuss the job, half way through to go over any details that may have gotten missed, and then a final inspection with a standardized inspection form to ensure that the customer got everything they were paid for and nothing was done wrong. 

Yes it takes time from the management, but that takes caring. If you don't care, they won't care, and you will get chit work from sub or employee. If you do care you will only surround yourself with those who care as well and fire anyone who doesn't.


I understand the logic about paying by the piece forces the crew to hurry to make money and quality may suffer. There is logic to it because most people who pay by the square don't pay a realistic wage, so the installers are left with no choice but to scurry. I suggest paying a realistic per square rate that reflects what they'd be earning hourly and possibly tieing in perfect completion with some kind of bonus. The point in paying by the piece, for me anyways, is not to cheat anyone but to ensure I am not being cheated. 

What is perfect ocmpletion? Well going back to that level of expectation and the standardized inspection form. If everyone has a copy of the inspection form, they know what you are looking for, and if the completion form comes back with no red marks the crew gets a bonus. 

Being a subcontractor is not for me, but is a perfectly legitimate business practice. IL and IRS law is basically the same in regards to licensing and insurance. However I do not use individual subs, any sub I use has a corporation with full licensing and insurance. Again, I use both sub and employee and I would put my roofs up against anyones any day. We are not perfect, we damned well try.

When I say subcontracting is legitimate, what I mean is simply this... Let's say you have a crew and you like to spend time on the job to make sure the work is done right. You don't have time to be running estimates and doing proposals, so you subcontract work from someone else who enjoys selling. Let's say you have several crews but take on work various other companies to keep those crews busy, you don't have any salesmen because you don't want to deal with the drama and added expense of advertising and extra trucks etc... Like I said subbing is not for me, I love selling, I love customer service, but you can make money and you can care about your work being a sub.


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## vtroofing

Yes. In fact that comment was too crass. I was a sub for years. I can drive you through neighborhoods and numerous, numerous commercial buildings and I was always providing the best install possible. 

It's those other points that makes it so enticing as a sub to find their own work.


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## RemStar

Paid for the lawyer...have not found a accountant necessary with all the great accounting software available nowadays. Perhaps once I grow. I thought about it and will be reducing my per sq. to $45. I will still be paying neer top dollar in my area with that.(Hopefully) My goal is to have my foreman make around $35/hr on any given job. That will do it.

Everyone wants to be "The Man". Being able to install a roofing system is totally different than running a buisness.


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## Grumpy

You're blatently doing things wrong that an accountant would urge you not to do "banking hours" and an accounting software will not tell you this is wrong. 


I totally agree about the running the business thing. I have been saying for years that beings the worlds best tradesman doesn't qualify you to run a trade business. Infact it's not even necessary, although it is a useful skill, but just one of many necessary as a business manager/owner.


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## caliroofer

I like your way of thinking Grumpy.


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## RemStar

Grumpy said:


> You're blatently doing things wrong that an accountant would urge you not to do "banking hours" and an accounting software will not tell you this is wrong.


Im going to assume your not a CMA and therfore un-qualified to make that statement. As a employer I reserve the right to pay with a system that is fair, consistent and legal under canadian laws. Banking hrs is legal as long as the employee contractually agree's to it when they are hired. You need to have a system like this in place if you run peice work otherwise you will get screwed for overtime when you calculate up thier hrs at the end of the pay period. Your hole sq rate will go out the window if your guys are houred out at the end of a pay period and you end up having to pay them 1.5x for the last three jobs the crew did.

If you don't want to bank hrs and perfer to pay overtime that is fine by me.Just realize there is more than one way to do things.


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## DFWRoofing

Most people can handle the day to day financials with Quickbooks. 

For a few fees they can also do payroll, withholding, and 941 reporting.


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## Grumpy

I am not qualified to make that statement, you're right, nor are you qualified to assume what youa re doing is legal either. I do know from experience talking to my CPA that in my area what you are doing is illegal and the IRS would have your a$$ for it. yes there are more than 1 ways of doing things, but that doesn't mean some of those ways are legal or right.


What's true about computers is this: garbage in, garbage out. If you aren't entering your numbers into the proper categories or entering the right numbers you are screwing yourself one way or the other. You may be missing write offs, or maybe what you are doing is against RIS rules, in which case if ever audited, you will be paying major fines... for a simple mistake.

We can't be good at everything, and tax laws are complex. Look at it this way, you probably are abotu as good at accounting as your accountant would be at roofing. My advice is done now on this subject. I have spoken my peace. As a business owner you are able to do what you want how you want. But I reserve the right to say "I told you so." if you ever post a topic about a tax audit.

For me the $1,200 a year for my certified public accountant is money very very well spent.


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## RemStar

Lol fair enough. I do have my taxes done proffessionally at the end of each year, I just handle day to days and payroll myself. I agree completely that most people should have a accountant. I am not most people.


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## shinglebroker

hey well i can tell you alot more im new to this an i live in Charlotte i do a good bit of roofing i could help you out


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## The Roofing God

shinglebroker said:


> hey well i can tell you alot more im new to this an i live in Charlotte i do a good bit of roofing i could help you out


Then why didn`t you,Was gonna reply,but after reading Grumpy`s posts (very intuitive,and informative),There`s just not much left to say
Here in N.Y. those prices are ridiculous,,
This comment by Grumpy has it all in a nutshell:
labor + burdens + over head + profit / squares per day = $$$ per square.


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## [email protected]

I made piece rate for a company here in idaho and it was $14 a square up to 8 pitch,$20 for 8 and $30 for 9, $40 for 10 pitch and $50 for 12. We didn't have to carry comp, but I think that was illegal so I don't recommend that. I personally carried my own health insurance for myself in case I got injured and wrote it off at the end of the year. I am reading your posts and realizing that I,m not charging enough for my work. Thanks for the enlightenment.


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## Grumpy

Having health insurance on yourself might not mean you are covered at work. Look into that because alot of the cheaper health insurance has exclusions for work place accidents on the assumption that you *should* be covered by comp. In other words you might fall off the roof and wish you had died.


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## kimboy

Yes. In fact that comment was too crass. I was a sub for years. I can drive you through neighborhoods and numerous, numerous commercial buildings and I was always providing the best install possible. 

It's those other points that makes it so enticing as a sub to find their own work.


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## Theroofjob

Wow. Up here in Maine roofing subs will get 150+ a square. Even at tat price theta I a huge profit margin to be made. For some reason Maine has a high per square ratio. I would say on average roofers are charging 375-400!per square. There are some outfits that are even pushing those numbers into 650 a square. Typically on these roof g jobs they are just bidding the roof. Customer has no idea what ten cost per square is. Www.roofing-maine.com


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## dougger222

I work on the crew with my family so it's tough to pay by piece work. Instead they all have their own liability insurance, workmans comp, and llc certs.

In order from top installer,
Dad $50 an hour
Little brother $40 an hour
Big brother $30 an hour

Some may say they are paid too much but with a combined 70 plus years of roofing experiance they are well worth it. Do I make money off them? YES. 

In the past have averaged on a typical roof I don't work on with the crew my costs are about $70 a square. On a typical roof I work on with the crew my costs are about $50 a square. The lowest I bid labor on a tear off is $140 a square.

We typicaly do a 30sq tear off in a day. Some weeks we do 4-5 roofs. Right now got a bunch of big steep roofs so they take 2-3 days.

Typicaly in the Fall time will break into 3 crews. My Dads crew of 50+ workers who do mostly 4 and 5/12's. My brothers crew who typicaly do piglets. My crew who either does new roofs, additions, or 7-8/12 tear offs.

As far as question number 2,
Dump trailers, $15-20 a ton.


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## dougger222

Grumpy said:


> Having health insurance on yourself might not mean you are covered at work. Look into that because alot of the cheaper health insurance has exclusions for work place accidents on the assumption that you *should* be covered by comp. In other words you might fall off the roof and wish you had died.


 
That's interesting. My insurance covers me but it's not cheap!!! Last Summer my little brother fell off the lader and busted his head open. We drove him to the hospital a mile from the site. He didn't have health insurance and after the x-rays and everything it was $7,500. He negotiated with the hospital and paid $1,500. He now has health insurance.


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