- Annual billable hours spreadsheet how to#
- Annual billable hours spreadsheet full#
- Annual billable hours spreadsheet software#
Cost of Employee Benefits? You’re Paying for More Than Benefits Benefits are frankly only the tip of the iceberg when it comes to figuring out how much an employee is really costing your company.
Annual billable hours spreadsheet full#
OK, that’s closer to accurate but still a long way from representing Pete’s full cost to Andre’s company. $120,500 Better approximation of total annual cost (salary + benefits) So as a first step, let’s begin our cost per employee formula by factoring in these costs to better estimate Pete’s real cost to Andre’s company: $95,000 Pete's Base Salaryġ5,000 Pete's Insurance (medical, dental, life) - company-paid portionĢ,500 Pete's Annual Bonus / Company 401(k) ContributionĨ,000 Payroll taxes (company paid portion) Here’s a fairly typical list of the company-paid benefits that are directly attributable to each employee: You may be factoring in health and dental insurance, 401(k) contributions, and other perks, but are you factoring in the cost of the employee’s annual vacation when calculating the cost of the hours that she is productively working for you? But even when it comes to benefits, things are not so simple. Most readers of this article will be quick to recognize that Andre has failed to factor in benefits. Unfortunately for Andre, it’s not so simple when you take employee overhead costs into account. Evaluating costs on an hourly basis, Andre believes that Roger will cost him $70/hour, whereas Pete (using the standard 2,080 work hours per year) will only cost him around $45/hour. Let’s assume that Andre finds an employee, Pete, for $95K/year. Here’s what you need to know: It’s Not So Simple Accordingly, tried-and-true methods do exist for more accurately calculating the real costs of your labor, enabling you to perform a sound financial analysis and make a more educated decision when faced with the “employee versus consultant” dilemma. And in a services business, these errors can even result in spending more to provide a service than you’re charging for it.īut of course, this is not a new problem. In a product company, these errors can eat away at your bottom line.
It’s truly astounding how few business owners properly account for the real cost of their labor. Andre doesn’t realize it, but there’s a good chance he actually would have saved money by hiring the consultant. The reality is that the costs per employee calculations when hiring are vastly different (and often greater) than those involved in bringing on a consultant, and the differences go way beyond annual salaries and hourly rates. Unfortunately, like all too many hiring managers, Andre’s financial analysis was overly simplistic and highly flawed as a result. So Andre decides to look for an employee to hire instead and save money. In contrast, Andre is sure he can hire a great developer as an employee for $100K or less. After all, Andre reasoned, that’s equivalent to an annual salary of over $145K, based on a typical 2,080 work hours per year. Andre was ready to bring on Roger, a freelance consultant who came highly recommended but backed off upon learning that Roger’s rate was $70/hour.
Annual billable hours spreadsheet software#
He needs top software engineering talent and he needs it fast. Consultant Costs A Typical Flawed AnalysisĪndre’s gotten funding for his company and is looking to staff his development team.
Annual billable hours spreadsheet how to#
Don’t Be Fooled: How to Calculate Employee Costs vs.
0 kommentar(er)
