Orillia Simcoe Bookkeeping Services 

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The Hidden Costs of Employees 

WHAT IS THE ACTUAL COST ON AN EMPLOYEE

 What is the TRUE cost of labour?

What should I mark up my employee labour to a client ? 

 If my employee gets paid 30.00 per hour what is my true cost? 

See how a $30.00 an hour employee will cost 38.42 plus?? 


ABC  Construction from time to time bills out his employees hours to a specific client.  Once the custom home is done, as a perk he will offer his employees for a few weeks to do work for the home owner.  As this is a thank you for using his firm he bills out at cost.  They employees will be doing anything from hanging pictures, making shelves to gardening.  


ABC Construction pays the employees directly and then bills his client by the hour.

If we look at one month and just one employee what is the cost?

Employee (1) works a 40 hour week at a rate of pay of $30.00

$30 x40 hours = $1200

The employer must then add the employers contribution 

Employers CPP Portion $ 61.73

Employers EI Portion $ 26.54

4% Vacation Pay      $48

This brings the payroll cost  up to $33.41 per hour 


At this point additional expenses will vary based on Industry and employee perks.  

WSIB at 10% - 3.34  Union Dues 5% 1.67  The total hourly rate cost $ 38.42


Benefits like health and dental or vehicle would be added on if applicable.


Finally  you must add in what it costs you to administer the payroll and HR. 

As well as any tools or supplies your employee uses.  


You might also want to consider what it would cost your client to hire this

employee or if it is even possible.