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What do you think the payroll as a percentage of total sales should be?

Cmon
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Cmon Rookie

Cmon

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Posted

HI I'M NEW.

 

I KNOW MY PAYROLL IS WAY TOO HIGH WHEN I COMPARE TO INDUSTRY STANDARDS I FIND ONLINE.

 

LAST YEAR I WAS AT 22% SOME INFO I HAVE FOUND HAS SAID 12-14%. IT WOULD TAKE A LOT FOR ME TO GET IT DOWN THAT LOW.

 

READING NUMBERS ONLINE I THINK CAN BE UNREALISTIC SO I STUMBLED ON THIS FORUM WHILE LOOKING AT STUFF ONLINE.

 

I FIGURED I WOULD ASK...

 

THANKS

 

 

 

 

Cmon Rookie

Cmon

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  • Author
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I PAY HOURLY TO MECHANICS I RUN THE OFFICE, BOOKING KEEPING, AND WORK ON CARS I AM A SMALL SHOP ME A FULL TIME GUY AND PART TIME GUY.

 

THANKS

mspecperformance Mentor

mspecperformance

Posted
Posted

If you are paying hourly that means that your payroll is a fixed cost and if it a high percentage of your gross sale then you need to increase sales.

 

Rule of thumb is to not go over 30-35% total payroll from your total sales. If you are at 22% your not in bad shape. Would have to know more about your numbers.

lmcca Collaborator

lmcca

Posted
Posted

Welcome to the forum, one other rule of thumb for forums is to not type in all caps, all caps is like your yelling at us <_<

 

Anyway, welcome!

bstewart Collaborator

bstewart

Posted
Posted

I've seen the 20-20-40-20 rule:

20% cost of goods sold

20% production labour

40% operating expenses including non-production labour

20% profit margin

  • 9 months later...
alfredauto Experienced

alfredauto

Posted
Posted

I'm at 50% cogs, 15% payroll incl taxes, 30% operating expenses. I sold a lot of tires and used cars last year and that brought the cogs way up. 5% net profit isn't my idea of perfect but we did a huge gross sales # to compensate.

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