Subcontractors-What should they get payed?

I’ve done work for serveral window cleaning companies as a subcontractor and I’ve also needed subcontractors to do work for me. All I’ve heard is 50/50 and 60/40 as percentages. What do you guys think is fair? Is there a market rate? Is it different depending on job description?

I occasionally use them and they typically get 60%

As someone who hasn’t been involved in this process at all, how does the whole deal go down?

Example: A window cleaning company calls you to do some jobs for them. Have these jobs already been quoted and you just have to show up and do the work? Do you collect and then give the other company a certain percentage or do they collect and give you a cut? And what happens if you get a tip as I sometimes do with residential, do you split it?

It depends on the company but usually they have already done the quote. But many times it is up to you to correct the phone quotes if nec… You should be able to keep the tips. If not, the company doesn’t appreciate you enough and you should move on… Collecting the money depends on how the customer is paying.

Is it ethical to keep the tip? Shouldn’t it go the subcontractor? After all he is the one who did the window cleaning work.

I dont care about percentages, personally, I care about Gross Daily Revenue, and Hourly Rate.

If you can pay me $600 a day for 8 hours or less, to do your work, I’m happy.

I dont care if that $600 represents 20%, 40%, or 60% or more of the actual charge.

This has been my experience, on both sides of the deal.

Percentage-based subbing can foment a lot of resentment. I recommend hourly or flat-rate.

Tips are for the ones who’ve done the work. Period. They are giving the individual the money, not the company. That’s what tipping is all about

Yes, but how do they get the daily rate? And if you pick up the check and see the price, that itself can cause you to have resentment, unless you are hourly and have the viewpoint of a regular employee. I still think, though, that hourly should be only for employees who are on payroll, unless, of course, the pay was fantastic (meaning way more than present employees. You supply all the equipment, licensing, insurance, transportation, storage, etc. for yourself- Nuff said). Although if an employee found out what your hourly rate was, that itself could cause (un)justified resentment. But I’m sure any way of payment can present a problem. My thing is if one accepts the job, one doesn’t have the right to complain, he knew what he was getting into. The hand was shaken. Period.

I kinda like the daily rate thing, but if you work for the company on a regular basis, one day can be more worth while than another as far as hourly brake down- and that right there, I guess, would be the advantage of just being given an hourly pay (side note: my sentence structures need an overhaul. Run-on sentences much! I have a craving to use semi-colons, but can justify slash understand them fully. Curse you, semi-colons!). But then, if you’re the company, some subcontractors may milk the clock.

Percentage pricing allows the company to prepare a labor budget more successfully than a daily rate, I would think. Yikes, there are advantages and disadvantages to each!

If one person subcontracts all their work from a company the government might not look favourably on that, and may view the person as an employee. Under that case, In Ontario at least, they would want the subcontractor to pay into worker’s compensation insurance. So in those cases one might want to look into selling a franchise or some other legal remedy.

Good point Mike. There is a thin line between Employee and Sub Contractor. One has to make sure they are up on all the rules and classification’s. There is a company in our area that had to pay back like 5 years of taxes because they were technically a employee by IRS classification.

I’ve actually read up a lot on employee/subcontractor policies. You have a great point. We always have to be careful about that. And the government putting a magnifying glass on your company is usually not “good times”. In the states, the difference from an emp. and a sub. comes down to how much direction and real power you have over him. Are you telling him how to do his job. Is his equipment yours? Is he working under your license? Does he have to meet with you daily just like your employees? Do you tell him how to do the job or do you just tell him to get the job done…
Franchises, huh…interesting. But that is so far down the road for me. I’m still building.

Yeah - “ALL their work” for a company is VERY VERY different from “they do all the work OF A certain company”, but have lots of their own work on the side.

There is a BIG difference from the gov’ts perspective between the two.

And with regards to the resentment thing, that’s the beauty of having the daily or hourly rate that the SUBCONTRACTOR IS HAPPY with, so that they are comfortable, and feel respected and appreciated.

If I am offered $800 to do a 6 hour job, will I complain and demand more upon finding out that the main contractor is also earning an additional $800 for staying home and watching TV?

No, of course not, right? Because MY NEEDS were respected and addressed.

Unless I am stupid and jealous, that is.

In the off chance you may one day change your mind on this point, you can pass the $800 job my way. :wink:

Are you often able to get that kind of dough? $133 dollars an hour is pretty sweet. Is that the kind of subcontracting that you offer?

Nahhh. Just an example.

I wish. Although I DO offer [I]flat-rate[/I] subcontracting, where I’ll simply say “Look, let me do this job for you for X amount of money, and you can bill your client whatever you want - it’s none of my business”

I have found that some people like that system.

And to address and earlier point, I have structured my work so that the people working for me have almost NO idea how much money I am charging my clients, to avoid the whole resentment thing, and I would recommend the same for everyone else, where possible.

Any subcontracting work I have been involved with has been flat rate. One company was given the entire CCU job, but they wnted to only clean the inside of the building, but not touch the windows, so I told them what I would charge to do the windows, I have no idea what they got for the whole job, only what I got for the windows.

A friend of mine has a construction business, and he has worked along the same lines. He does trim, and remodels, so working on a big building one company does the siding, and he comes along and finishes the trim. On the inside of the same building one company was trimming out the interior of the first floor, another was doing the second floor. So it doesn’t really matter what the other guy is doing you have your assignment and your pay.

I been on both sides sub and hiring subs. I’ve found it best to go w/ a flat rate and not let them know what I’m making because as paneless said it avoids the whole resentment thing.

Hello everyone. A lot of familiar faces. Just wanted to buzz in with my answer.

I pay an hourly rate which almost always comes out to 50% - I would rather pay my employee and make 75% but sometimes it just doesn’t work that way.

We just recently started doing some work for a cleaning company that cleans new homes prior to owners moving in. She calls us to go to the home to give an estimate, and she submits the quote to the builder. If the builder wants window or pressure cleaning, she makes the arrangements for us to come out and do the job. We bill her cleaning company and give her 10% off the job, and in turn she marks it up 10% and charges the builder. Once she gets paid from the builder, she cuts us a check. We have done several jobs for this cleaning company, and it seems to be beneficial to both of our companies. Now that I see your posts, I’m wondering if we should have given more of a discount to her for mark up?

Your prices must be good if they keep coming back to you. I have dealt with half a dozen cleaning company’s, maybe did one job for them, then never heard from them again. I know its not because of the quality of our work (being the best in town. :wink: LOL) i’m thinking they found someone cheaper or maybe even wanted to get a feel of what window cleaners charge and now they are charging the $60+ hr and doing themselves (the old fashion way, windex and towels).