The four layers on top of a wage
A wage is what the employee sees. Your cost has four more layers, and in tree work the second one is enormous.
| Layer | What it is | Typical share of wage |
|---|---|---|
| Payroll taxes | Employer FICA, FUTA, SUTA | 8–10% |
| Workers compensation | Tree trimming is one of the highest-rated classes in the country | 10–25%, some states higher |
| General liability | The share of your GL policy rated on payroll | 2–4% |
| Benefits and gear | PTO accrual, uniforms, saddles, saws, training, drug testing | $1–3 per hour flat |
Workers comp in tree work: why it is not like other trades
Comp is priced per $100 of payroll by class code. Landscaping might run $5 to $8. Tree trimming and removal often runs $12 to $25, and in some states more. That means a $50,000 climber can carry a $6,000 to $12,000 comp bill on top. If you have ever wondered why the uninsured guy can quote half your price, this is a third of the answer.
Two things reduce it over time: a clean experience mod (no claims for three years) and correct classification. If your ground crew is coded as tree trimmers when they never leave the ground, you may be overpaying. Ask your agent.
Paid hours are not billable hours
You pay for about 2,000 hours a year. You do not bill 2,000 hours. Holidays, sick days and rain days come off the top. Then the shop mornings, the drive between jobs, the chipper that needs a blade, the fuel run. What is left is what customers pay for.
| Paid hours per year | 2,000 |
| Less 25 unbillable days × 8 hours | −200 |
| Less 18% shop, travel, maintenance | −324 |
| Billable hours | 1,476 (74%) |
|---|
Every billable hour has to carry the unbillable ones. So the real cost per billable hour is the burdened rate divided by utilization: $33.25 ÷ 0.74 = $45.05. That is what a $25 employee costs you per hour a customer pays for.
What this means for your quotes
- A three-person crew at an average $25 wage costs about $135 per hour on site, before any equipment or overhead.
- If you have been estimating labor at wage × hours, your labor line is roughly 45% too low on every quote.
- Drive time is paid time. A 90-minute round trip for three people is 4.5 crew hours, about $200 that has to be in the price.
Common mistakes
- Using the wage as the rate. The single most common error in the trade.
- Forgetting your own hours. If you climb, your time is crew cost. If you estimate and run the office, that is overhead. Both have to be in the price.
- Treating comp as overhead. Comp is rated on payroll, so it belongs on the labor rate, where it scales with hours. Putting it in general overhead under-prices labor-heavy jobs.