Hourly pay vs. commission

Ken C.

The company I've been working for the past few months is a flat rate company that pays its employees commission only. Some weeks, I've made twice as much as I did working for previous companies (T&M companies that paid their employees by the hour). The downside is, I've had some horrible weeks too. This is one of them. It's 2:00, and I'm at home because there are no calls (only had one call this morning). It drives me nuts to be sitting around due to lack of work, both because I'm bored and because I'm not making any money. Funny thing is, most other companies in my area seem to have plenty of work. Have any of you pros ever been paid by commission? And what do all of you think about commission pay vs. hourly pay?

Robert O'Connor_7

pay.......

Get both! Commission for me only happens when I sell BIG. Other than that, go by the HR. w/benefits. I work by the hour (i'm also one of the owners) so when i'm sitting home, It's my fault. You on the other hand are relying on someone else getting you work. Make a move, or get more work. Maybe the boss over there is feeding the work to one of the favorites??? Robert O'Connor

Ken_8

I was a 100% commission employee for 12 years

and it worked very well.

But not like your situation. We always had a "draw."

We would have a "draw" with unlimited negative potential and only positive potential. If you got too far "in the hole," the draw would be adjusted or you'd be asked to resign (get fired). I think the "draw" was based on some minimum percentage of basic pay; say 600 a week. every month there would be an "accounting" and if you were over the $2,400 in commissions you'd draw a commission check for the overage. Some months you'll get just the 600 a week. Some months you'll pull down a commission check for the overage of perhaps an additional $1,000? on a great month? You do that 12 months in a row and you get $42K instead of just 30.

Obviously if the shop is flat rate you'll make between 150 thousand a year and 200 thou for openers and retire at 37 years of age.



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MikeC_2

Commision

I was a service manager for 12 years and never paid commisions on parts.We paid our techs hourly.We only paid a commision on legitimate equipment sales and service contracts.Ever go to the muffler shop and wonder why you leave 500$ lighter when your tailpipe fell off?

john_35

commission

I worked for a company that went to 100% commission pay last year. At first I was doing better than hourly because it was late winter and we still had work. Then we had a wet Spring and there was neither heat or A/C work enough to keep me ahead of my bills. I had to file partial unemployment just to squeak by. I really felt like the owner had left me twisting in the wind and so when he asked if there was any way he could get me to stay the answer was no. Long story short, the guy lost all but one of his service techs last summer and now I hear he's paying hourly again.
If you're gonna agree to commission make sure you get some kind of guaranteed minimum rate. $600.00 a week is good if you can get it. I haven't met the owner that would pay that rate yet.

Ken D.

Commission/Hourly

I worked for one outfit that paid commission. The deal was 100% commission. What happened was that the money was not all that good and guys would oversell parts and labor in order to make a living. Parts would be replaced that were not defective, labor would take a long time in order to run up the bill. The boss knew what was going on and in fact, loved it as he was making the lion's share of the profits. He had a big sign in the office that said " Sell or Be Fired." He was in hog's heaven until the local newspaper set him up and the county consumer protection sued him. Good-By business! Needless to say, I did not work there long. To this day if one of those mechanics who are working for someone else now, lets it be known where he worked previously he would more likely than not be thrown off the property.

Joel_3

????

Is this only for service work? are installers paid the same way?? if so can't you do install on slow service days? My service guys do both if there isn't alot of calls. Then again everybody gets overtime every week 5-20hrs since there's plenty of work. speaking of that how does that work lets say you work 55hrs and get payed for 70hrs how do they calculate overtime with that. it is state law here 1.5x over 40 so how does your boss get around that legally???

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Joel_3

and

I was under the impression that with high FR charges and performance based pay tech rates would be very high 6 figures or close. If 42k with bonuses is accurate I'd like some explanation of that OFF THE WALL PLEASE!!!!! via e-mail, you guys doing this what do you really get$$ wise. i'm assuming full medical for your familly, retirement plan,truck, life insurance, disability, tuition reimbursment, etc your getting right? if not than maybe i don't want to go FR. I mean I want to make my techs (andmy) life better , but it's not sounding better in this thread!

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Ken C.

There is a minimum ($200), but only if your weekly sales is less than $1,000. If I sold $1,005, for instance, then it would be commission only.

Ken C.

Not much for benefits either ... no full medical for family (only partial for a single plan), no retirement, no sick days or holiday pay.

Joel_3

Ken

WOW!!!! what's with that?? are they FR but not charging enough? or are they keeping it all to themselves? I supose a company can be poorly run wether it's FR or T+M. To me it just seemed FR guys have by the nature of the beast a better handle on thier cost so they know what they need to get to provide for thier employees. My guys are getting a much better package than you are, and I'm working hard to make it even better. And we aren't FR yet!! (soon). You should polish up your resume my friend

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Chris Reak

Try this. It seems to work well for the companies I have worked with. The goal is at the end of the year, a technician will receive a total wage for the year of 28% of total invoice. This leaves the company with a healthy profit, and very happy and fairly paid employees. But how do you go about doing that without the tech being paid on commission? Here is what we came up with and like I said, seems to be working fine. The employee gets paid hourly $15-$20 whatever the owner or controller feels comfortable with. At the end of the year, they get a Christmas Bonus check containing the rest. Everything is still taxed etc... This way, the tech has weekly money to meet domestic needs, and gets a lump sum for the rest when it is needed.

Thanks
Chris Reak

Ken_8

Hey Joel?

Ya gotta remember manpower is a commodity. After all, this is a capitalist society - the basis of a democracy right? If I can get somebody better and cheaper...

Also remember a number that sounds reaonable to you is relative to the going rate in that part of the country. If you work in Goatlick Mississippi - the hourly wage might be 8-bucks an hour with no bennies. If you work in NYC on a union gig - the rate is ten times that!

Then too, you can rent an entire 2000+ SF house in Goatlick Miss for 550 a month. You can't get a motel room in NYC for that for a night!

Regional supply and demand forces on workers is like everything else. If the supply of competent workers is larger than the demand - the payscale will be low. The opposite is also true however.

A union electrician in NYC with 20 years of service probably makes more than you and I combined. Bennies? We simply couldn't afford them - period.

So when a guy from Goatlick tells you how HE sees it, try and remember the three important points we all know and love: Location, Location and supply and demand.

Basic capitalism at work. I for one, fully embrace it.

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Joel_3

right

I agree , sometimes i forget how affordable othher areas of the country are .Where i live i think the rates and pay should be much higher than they are. Here it's pretty tough to find a decent apartment for less than 1k a month most are 1200-1500 3brd. There are no used houses in my town under 300k. New houses start at about 550 on ocasion, most are 600+ go a few towns over and 600k gets you a lot!One town we work in, last year the average house price (new and used) was 975k , it's totaly out of control. So if your working in goatlick where you can buy a decent used house for say 150k then who cares if your getting 5$hr less? Your actually better off!

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Iah

Which one is better to get taxed: Hourly pay or commission (in terms of saving more money)

The company I'm working with is making me choose on which they should tax the Hourly Pay or my Commission? I want to find out which one has less I'll be better off by the end of the year. As a matter of fact, I have no clue which one, I'm not sure the details of getting taxed through commission basis, is it a lot more? Can I do tax deductible? like for gas? dinner receipts?



Please if you can help me I appreciate it.