Employee Pay - Hourly or Commission?

[Grass King]

Hello everyone,

I'm starting a new lawn service company, which will primarily focus on basic service (mow, trim, edge). I am currently employed fulltime 6 days a week at another job. Needless to say, I have a big challenge ahead of me with opposition coming at all directions. But after a year of planning I am ready. So far the biggest problem I am having is finding a couple of guys to do the work. I don't have enough accounts or cash flow to keep someone employed fulltime, but more than myself alone can handle. I just recently advertised in a local paper and am getting calls everyday, and with some help can really get things going. I finally found someone who might be interested, but I'm unsure how to pay him. I think commission is the best way to go, because the potential to make money for him will depend on his willingness to succeed. Anyways, tell me what you think. Thanks in advance, and thanks for this wonderful forum!!!!

[Scaper-S2k]

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I would stick with hourly first. Not to sound mean at all, but if you have too much work to handle yourself, but not enough cashflow to hire someone full time, I would be inclined to think you need to raise your prices. Like I said, please don't take that the wrong way. Commission can get a little hairy.

<<Don't Fear the Green!>>

[Jeff N]

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I'm with Scaper. Before paying someone a commission/incentive, you need to have the systems to support it. If you pay by the job, how do you ensure quality (or that the work's being done period). If someone is selling for you, how do you ensure that the work can be produced for the price they sold it for. Do the jobs by yourself first to get a baseline. Pay your guy by the hour and track every job to see how long it takes someone who's not you. Follow up to make sure the job is getting done properly. Eventually, maybe move into incenting the crew. Good luck...

Jeff Nicholson

[nohhousefire]

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You will probably fail if you just send guys out to do work on commission.
Paying hourly wages requires more than just x dollars an hour. You have to registure with irs as an employer. Open an account for deposit of social security taxes, income taxes, you have to match ss taxes, and provide workmens comp. You have to do quarterly returns and pay those taxes at that time.
A way around it, draw up lease form by day on equipment with agreed pecentage of each days work, lease equipment for a dollar a day, pay percentage of work done per job to subcontractors (this cannot be hourly and requires 1099 at end of year). I underwent an irs audit and won using this system. This also requires some delicate wording in insurance and workmans comp.

[JIM BOB]

Question, at which point does ones parttime lawn care "hustle become a legitimate business venture where you actually have to report your earnings?