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Employer Burden – the Unspoken Cost to Payroll

Automotive & HD Business Management Articles.
Bob Greenwood. February 11, 2015. ( over 2 years ago ) 1,243 views

Ninety-nine percent of all Canadian shop owners think incorrectly about the hourly cost they’re paying their staff. You’ll hear them say, ‘my top man is paid $30 or $35 per hour. My apprentices are paid $23 per hour’.

 All are wrong.

 We have to learn to think and talk in the right dimension. That $30 an hour person is really $35.20 per hour BEFORE benefits; the $35 per hour person is really $41.07 per hour before benefits.

 It’s called “employer burden” and you must be aware of its reality. It is the burden governments legislate on your business payroll for Vacation Pay, Canada Pension Plan, Employment Insurance, paid Statutory Holidays and Workplace Safety (Workman’s Compensation) and you pay it all out over the course of the year.

 The national average for 2015 for an automotive service shop is 17.36% before benefits. This varies slightly by Province. When benefits are added to the equation, we find the national average coming in at 27%… WOW… meaning a $30 an hour person really costs $38.10 all in to the business and the $35 per hour is $44.45 all in.

 This is one of the real world costs to operating a service shop today, so a manager/owner MUST make sure they are on top of every financial corner of the business… understanding how ALL the numbers of the business interact today.

Bob Greenwood


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