Proving just how expensive fringe in cash really is!
Additional Cost to pay $1.00 per hour in Wages
Yearly cost per hour to pay $1.00 of fringe in wages
Annual cost to pay one employee's fringe in cash
Total yearly ADDITIONAL cost to pay fringe amount in cash and provide medical benefit
You know how important it is to be cost competitive. More importantly, in these tough economic times, you know that just a few thousand or even a few hundred dollars in your bid can be the difference between a large government contract and laying-off employees.
Save money by taking the fringe off of your prevailing wage payroll
Hard to believe that big cost savings can be that easy, but it’s true. While both Davis-Bacon and State prevailing wage mandate the amount of fringe you pay to your employees, they offer options for how you pay it. And that’s why CPWIS is here.
If you’re paying fringe in cash, you’re wasting money
If you’re putting the fringe portion of the prevailing wage on your employees’ paychecks, your mandatory fringe payments are being treated as wages; and since it’s wages, you are required to pay statutory taxes and workman’s compensation. That’s right, you are paying taxes on your fringe! And just what are you getting in return for wasting your money?
Paying your benefits in cash is making you less competitive
Depending upon the state you live in, you might be spending an additional $0.30 for every $1 dollar of fringe money you pay to the employee as wages. That may not sound like much. BUT, for a large government contract, you might be paying thousands of dollars in taxes – THOUSANDS! – that you don’t need to be spending.
Just how much can we lower your job costs?
Let’s say you have 10 employees working 40 hours / week on a year-long job and your mandatory fringe contributions are $10/hour. Your workers comp per hundred is $13.50 (per $100 of payroll) and your G/L premium is $5.49 (per $1,000 in payroll) - a nice conservative amount. Based on these numbers, you are wasting $36,107 dollars per year. That’s right. Look at these job cost reduction calculations. In this competitive economy, can you really afford to be paying extra for your fringe?! Can you really afford to be spending more in taxes and insurance costs than you need to? What could you do with thousands of dollars of job-cost savings? Maybe you could be more competitive in your bids, resulting in you getting more prevailing wage contracts. Or make more money. How about both?
CPWIS is here to help you save money
We design employee benefits strategies that take all that fringe money off of payroll. It’s a win-win-win. You get the benefit of lower taxes and reduced workman’s compensation premiums, which translates into lower job costs, which makes you more competitive. Your employees get the benefit of great benefits. Bet you didn’t think something so simple could affect your bottom-line!
CPWIS will help you in other ways
Of course, cost savings through employee benefits is only one of the ways we can help you be more competitive. Through our consulting and advisory services, we’ll help you implement our employee benefits plans into your accounting systems, helping to insure the accuracy of your fringe contributions AND your payroll! In addition, we will educate your staff so that they can make proper prevailing wage determinations. Not to mention, we work regularly with both internal and outsourced payroll to install recording practices which will protect you in the event of an audit. At CPWIS, we are committed to helping you lower your job costs today WHILE keeping you from having to pay-out your savings tomorrow.
Still not convinced that we’ll save you money?
Use our job cost reduction calculator. Put in the details of one of your government bids – don’t worry, we’re not going to capture the information. We just want you to see a sample of how taking the fringe off payroll works in the real world. Trust us, you’ll be amazed at the savings!
So take a look around our site and then contact us (or have us contact you!) and let us help you put a cost-saving strategy into action. You’ll be glad you did.
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