# Paying a sub



## PSDnate (Feb 9, 2012)

I've been in business for 7 years now. I have enough work so I'm adding another plow truck this year. I have a buddy lined up with a truck and plow ready to go. I charge per push and would like to pay him a percentage. What is the going percentage rate to pay a sub?


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## 1olddogtwo (Aug 6, 2007)

Define "Sub"


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## JMHConstruction (Aug 22, 2011)

What are going rates in your area? I've paid subs anywhere from 40-90% of the job. Never paid for snow, but it would probably be close to what everyone else is paying subs. It comes down to what do you need to make a profit, and go from there.


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## Randall Ave (Oct 29, 2014)

Different areas, different rates. And your just hitting some driveways, or your doing big commercial lots.


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## BUFF (Dec 24, 2009)

PSDnate said:


> I've been in business for 7 years now. I have enough work so I'm adding another plow truck this year. I have a buddy lined up with a truck and plow ready to go. I charge per push and would like to pay him a percentage. What is the going percentage rate to pay a sub?


When I subbed I was paid 30% less than the contractor (who's a friend) was being paid. He made money, I made money and was fair in my opinion. Just make sure your buddy is insured and paid as contracted help.


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## Defcon 5 (Mar 20, 2014)

Most subs in this area are paid and hourly rate...Make sure you have a subcontractors agreement signed by him defining
the terms of the agreement...The government has rules on what a subcontractor is...Make sure you look into those also...


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## JustJeff (Sep 9, 2009)

Yes. It comes down to if you want to pay him hourly, or per job. If you pay him per job, you don't have to care how long it takes him to do it as long as it gets done right. You'll also know exactly what your profit/loss on each push.


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## PSDnate (Feb 9, 2012)

I get paid per push so I thought it would be fair to pay him that way. That way I can't lose out. I understand that it's different per area but I was just looking for something to give me an idea. 40-90% is a big range hahaha. Thanks for the replies.


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## Randall Ave (Oct 29, 2014)

My guess is he would want to make at least $80.00 an hour. That's probably low.


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## JMHConstruction (Aug 22, 2011)

PSDnate said:


> 40-90% is a big range hahaha


Different jobs, tasks, and work performed. I was just giving an example that not everything, and everyone is the same. Also depending on materials provided, they pay will differ. If you supply salt or something that needs to be taken into account


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## Philbilly2 (Aug 25, 2007)

1olddogtwo said:


> Define "Sub"


Pat, he must have overlooked your post...

Can you define "sub" for all of us?


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## Defcon 5 (Mar 20, 2014)

Philbilly2 said:


> Pat, he must have overlooked your post...
> 
> Can you define "sub" for all of us?


I overlook pats posts all the time.....On purpose.....


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## ktfbgb (Jan 31, 2016)

PSDnate said:


> I've been in business for 7 years now. I have enough work so I'm adding another plow truck this year. I have a buddy lined up with a truck and plow ready to go. I charge per push and would like to pay him a percentage. What is the going percentage rate to pay a sub?


Every area is different. So its going to be hard to get a going rate.

You've been asked a couple times to define sub as you see it pertaining to your company. There is a difference between a sub and a independent contractor.

If you are hiring a sub you get the contracts, and then find someone to do it for less than what the contract is worth. You give them a contract to sign with you, and agree on a price. They will need to submit proof of GL, work comp, and commercial auto coverage to you. So that you can submit them to your insurance at the end of your policy period. You will give them a 1099. You have no control over them or how they do the work, excep for holding them to the terms spelled out in the contract.

Many times people get confused and they are hiring a independent contractor. This is someone who can be paid hourly or per job. They are providing their own equipment and may or may not be required to have their own insurance. You can have more operational controll with these guys. But not very much. The IRS has strict rules on what makes a IC vs an employee.

Guys operate illegally all the time. Most of the time they are not intentionally breaking the law, but they are.

If the guy has his own legal business, and you write a contract with him for a set price based on services provided, he is a sub. If not he's a IC and it gets dicey.

As the business owner you need to decide what is an acceptable profit margin for you, and then figure that into the price of the contract before hand. You need to know what your subs are going to charge you before submitting the proposal to the client.


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## PSDnate (Feb 9, 2012)

I have all the contracts. The guy I'm bringing in has a legal business and will be taking care of the accounts that I give him to take care of. He will be using his equipment. He will be getting a 1099. I just wanted it to be fair to both parties. That's why I was asking what the going percentage rate was. Not an hourly rate or how much to exactly pay him.


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## JMHConstruction (Aug 22, 2011)

What do you need to make a profit


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## cjames808 (Dec 18, 2015)

I hear it's common to payout 50%-75% depending if ground work to subs working for smaller contractors. 

Larger boys around here pay hourly $85+ 

Both depending on equipment and experience.


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## ktfbgb (Jan 31, 2016)

My standard markup on subs is 20%. I don’t know if that’s helpful to you or not.


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## JMHConstruction (Aug 22, 2011)

ktfbgb said:


> My standard markup on subs is 20%. I don't know if that's helpful to you or not.


Even though I've never paid a snow sub, based on what I charge for my own accounts to what subs here get paid is about 60-80% of the job, depending on company and equipment (based on price broken down to hourly). I would guess most here base their prices at 75% of the job. I'm making sure to say "of the job" so I don't start a "mark up" definition war.


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## JMHConstruction (Aug 22, 2011)

ktfbgb said:


> My standard markup on subs is 20%. I don't know if that's helpful to you or not.


I charge the same for my subs on jobsite usually unless I have to supply something of course. My window guy charges a bit more, but he's awesome, fast, and I've NEVER had am issue.

Just punching numbers here, it seems like most snow company's are adding on a bit more. Can't blame them, they have more on the line than I do with my electrician wiring in a fan.


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## ktfbgb (Jan 31, 2016)

JMHConstruction said:


> I charge the same for my subs on jobsite usually unless I have to supply something of course. My window guy charges a bit more, but he's awesome, fast, and I've NEVER had am issue.
> 
> Just punching numbers here, it seems like most snow company's are adding on a bit more. Can't blame them, they have more on the line than I do with my electrician wiring in a fan.


Ya that's just a standard rate to start with. I don't sub out snow unless I really need the help. Like hauling. On the construction side base is 20. Then adjusted based on the job. Small jobs I do 20 I have a $60K remodel on a condo unit starting in 2weeks. I only marked subs up 7.5% on that. If I did 20 I would never get the jobs


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## JustJeff (Sep 9, 2009)

cjames808 said:


> I hear it's common to payout 50%-75% depending if ground work to subs working for smaller contractors.
> 
> Larger boys around here pay hourly $85+
> 
> Both depending on equipment and experience.


I don't know where you live, but my trucks aren't leaving my house for anything close to 50%.


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## JMHConstruction (Aug 22, 2011)

I have yet to build a $60k deck, so I'm good there. :laugh:


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## ktfbgb (Jan 31, 2016)

JMHConstruction said:


> I have yet to build a $60k deck, so I'm good there. :laugh:


Really? I did quote for a deck this spring for $100k. I lost it to someone that came in at 80. Maybe you get materials way cheaper than we do. They probably dont make you do the footers we do either to pass for the live load of the snow.


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## JMHConstruction (Aug 22, 2011)

ktfbgb said:


> Really? I did quote for a deck this spring for $100k. I lost it to someone that came in at 80. Maybe you get materials way cheaper than we do. They probably dont make you do the footers we do either to pass for the live load of the snow.


I've quoted 55k, but the largest I've done is 47k. Most are 15-30k. I actually prefer the small 13-17k ones we can get done in 2 or 3 days. I hate the ones that just drag on forever.

For whatever reason, even the $1m houses go for the cheap easy boring designs, and barely splurge on composite.


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## ktfbgb (Jan 31, 2016)

JMHConstruction said:


> I've quoted 55k, but the largest I've done is 47k. Most are 15-30k. I actually prefer the small 13-17k ones we can get done in 2 or 3 days. I hate the ones that just drag on forever.
> 
> For whatever reason, even the $1m houses go for the cheap easy boring designs, and barely splurge on composite.


Makes sense to me.


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## PSDnate (Feb 9, 2012)

Thanks guys! These were the answers I was looking for.


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