CWC Electric, LLC Electrician in Topeka, Lawrence & Surrounding Towns
  • Home
  • About
  • Electrical Services
    • Commercial Electrical Services
    • Commercial Lighting
    • Electric Car Chargers
    • Federal Pacific Panels
    • Fire Alarm & Smoke Detector Installation
    • Lighted Mirror Installation
    • LED Lighting
    • Parking Lot Light Repair
    • Ring Door Bell Installation
    • Surge Protection
  • CWC Electric, LLC Blog
  • Photo Gallery
  • Contact
  • Our Trusted Business Partners In Topeka

Why Are Electricians So Expensive?

10/22/2020

21 Comments

 
Picture
Have you ever received an estimate from an electrical contractor and thought “Why are Electrician’s so stinkin’ expensive?” You aren’t alone. Electricians located in the Midwest, typically charge in the $95-$125 an hour range and that does not include the cost of parts used on a project. As a longtime Electrical Contractor, let me explain why.

Per Forbes magazine, in 2018 Kansas electricians made an average salary of $54,940 ($26.93 an hour based on a 40 hour work week). The cost of an employee to a business is more than the wage paid to the employee. Business must share in paying payroll taxes (FICA & FUTA) and often provide other benefits such as vacation, uniforms or paid training.  A rule of thumb used by most businesses is that an employee will cost the business 1.25 to 1.4 times their annual salary. The true cost to a business hiring an electrician at $54,940 is somewhere between $68,675 and $76,916 ($33.66 - $37.70 an hour).

Electricians are in the top five highest paid non-degree professions. For years, society has funneled high school students towards college. With fewer people entering the skilled trades, it has become increasing difficult for businesses to hire qualified workers. Lack of skilled labor has led to high wages. It’s simple supply and demand. Perhaps it is time to teach our children there is nothing shameful about working with your hands and that people going into the trades make as much money as people with college degrees, but without the associated college debt.

Today’s electrician is not your Granddaddy’s electrician who showed up in a rusty truck, pulled a little wire and made up an outlet or a switch. Almost everything installed by an electrician today is a “smart” device which means it has to be programmed and comes with a remote or a phone app.  Being an electrician has always required a strong mathematical background. Now, electricians must know some basics of computer programming and are constantly needing to learn a variety of new technology from installing solar panels to generators. If you think it’s difficult to wire a three way switch in your home, try troubleshooting a complex control system.
Electricians do not have a four year degree but they are required to complete either a four year on the job apprenticeship or a combination of two years of advanced technical schooling and a two year apprenticeship prior to being able to take the test to become a licensed Journeyman. While apprentices earn a salary during their apprenticeship, it takes years of training before they can qualify as an electrician. I like calling it a “Field Degree”.

However, paying an employee is not the only cost to a business. Your electrician likely arrived in a specially designed, shiny service vehicle which averaged somewhere between $32,000 - $45,000 to purchase.  If payments are $7200 a year, $600 month), the vehicle cost to the business is around $3.50 an hour based on an average 2,080 hours of use during a year.

In addition to wages and the price of purchasing service vehicles, electrical contractors must calculate their “rolling overhead”. This term refers to the cost of keeping a service truck operating in the field but doesn’t include the price of the truck.  These expenses include fuel, maintenance costs, taxes, GPS tracking, insurance, signage, racks, tools, test equipment and a large inventory of parts. My service trucks carry on average of $10,000 in inventory. A typical rolling overhead cost per vehicle is easily in the $700 - $1,000 a month range or around $4 - $6 per hour operated.

Isn’t that enough to calculate? No, now your Electrical Contractor must calculate his “base overhead” which is the cost of running his office. These expenses include the cost of maintaining a shop including monthly mortgage, repairs to the building,  insurance, taxes, utilities, administrative office staff salary and benefits, general liability insurance, website, landline and cell phone expense, advertising, IT support,  desks, furniture, computers, internet, cleaning, credit card fees, licenses, customer management and accounting programs, professional fees, association fees, collection fees, right on down to basic office supplies such as paperclips and pens.

A company’s base overhead is likely its largest expense. I remember the first time I calculated my “base overhead”. I thought, “That can’t be right”.  I refigured it and yes, it was right. The base overhead is typically the highest of the four major categories and depending on your contractor’s expenses may be in the $40 - $60 an hour range.
So to recap:
​
Wages                              $  35
Truck                                 $   3
Rolling Overhead              $   5
Base Overhead                $  45 - $50
Total                                  $88  -  $93

So, if your Electrical Contractor is charging you a paltry $100 an hour, he probably gets to keep $6 to $11 after his expenses.  Of course, this is per employee/service truck. A sole proprietor working out of his house with one truck is simply working for a low wage.  I had a friend who was struggling with his small electrical contracting business tell me his accountant had told him that to make a decent profit, he should be charging $140 an hour. Because of a competitive market, he was unable to charge this rate so he ended up working very long hours in order to make a livable salary.

According to the most recent Sage Works Industry Data I reviewed (2018), the average Electrical Contractor made a net profit margin of 5.87%. Other sources quote around a 3% profit margin. It’s no wonder so many businesses fail.
And with the advent of Covid-19, many businesses, including electrical contractors are facing the additional expenses related to providing masks, hand sanitizer and the need for frequent and additional cleaning. So, that profit margin probably just dropped a little more.

 
This article may not be reproduced in any form without the written permission of CWC Electric, LLC.
 
Reference Articles:
​
https://www.forbes.com/sites/andrewdepietro/2019/11/14/electrician-salary-state/#622a376f67de
https://www.sba.gov/blog/how-much-does-employee-cost-you#:~:text=This%20includes%20the%20dollars%20and,range%20from%20%2443%2C750%20to%20%2449%2C000.
https://www.ecmag.com/section/your-business/pricing-service-work-profit
https://www.bls.gov/oes/current/oes472111.htm
https://www.ecmag.com/section/your-business/calculating-net-profit-margins-tricky-business
https://www.ecmag.com/section/your-business/2018-profile-electrical-contractor
https://www.sageworksdatabase.com/


21 Comments
neelam link
10/31/2020 05:53:07 am

Informative blog post, Thanks for it..
<a href="https://www.trustedcaptain.com/michigan/plumbing-services-near-me.html">Plumbing service in Michigan</a>

Reply
Office Fit Outs Auckland link
12/16/2020 03:02:42 am

Thanks a lot to you for sharing whyareelectricianssoexpensive here, these kind of ideas are were much needed. I really appreciate that you have provided the data too, really appreciative and useful blog for us. Looking for more!!

Reply
Residential Electrician Christchurch link
1/19/2021 04:40:42 am

Hey thanks for posting this useful information about why are electricians so expensive here, I really hope it will be helpful to many. It will help a lot; these types of content should get appreciated. I will bookmark your site; I hope to read more such informative contents in future. Appreciative content!I have seen similar information at one place, you can also see on Insightelectrical.co.nz

Reply
Chris Pederson link
2/23/2021 02:40:27 pm

I had no idea that electricians today actually install smart devices. That makes setting them all up for myself a lot easier. Maybe I can get an electrician to help me with all the gifts my kids got me for my birthday.

Reply
hire an electrician link
4/28/2021 03:12:31 am

I wish more homeowners could access this article to understand that what we charge to hire an electrician is the bare minimum. Thanks for a great article.

Reply
click here link
4/28/2021 03:15:49 am

this is true. Electricians have a lot more expenses than what people think. Moreover, the price for all wiring and other materials has gone up significantly since the pandemic. We can't even increase our prices to the same percentage of what the material price has increased.

Reply
check our website here link
4/28/2021 03:25:57 am

I can see that even more here in Berkeley and Oakland where the cost of living and materials is significantly higher than other states.Thanks for sharing.

Reply
Gibson
5/21/2021 05:01:50 pm

I got a quote to upgrade electrical to a 200 amp box for $7000. You can't tell me that's reasonable no matter the extra expenses. I looked up the prices of all the stuff involved and even if you paid exorbitant end-user prices the cost of goods comes to less than 2 grand and you can't tell me it's going to take them 50 hours to upgrade a box. I would welcome $100 an hour price. That's not what I'm getting.... it's more like $500 an hour price from the quotes.

Reply
Local Electrician link
6/5/2021 01:17:26 am

As it turns out, there are a lot of good reasons why electricians charge such high prices. First and foremost, the job that they do is extremely dangerous. There is a real risk of electrocution when working with any type of wiring. Dangerous jobs tend to pay a lot more than those that don't involve as much risk.

Reply
Marina (NMPL) link
6/18/2021 04:14:10 pm

Thank you so much for the article, detailed and understandable. I never wondered why the prices for services related to electricity are so high. I thought that the net salary was quite high, but it turns out that the price includes a lot of all sorts of extras. It’s very strange that you don’t get as much money for a rather dangerous job as you need to.

Reply
Electrician in jaipur link
10/18/2021 04:33:15 am

Hello,
Nowadays this article is attracting mostly everyone in the world as it provide us clear information regarding new electrical updates.It is one of the best article. It is a pleasure worth reading this article. I never thought will get to visit this redline-electrical.co.nz oh, has some nice content for everyone.
Thanks.

Reply
electrician in jaipur link
12/7/2021 03:53:14 am

Thank you so much for such a detailed post! It is hugely advantageous. This is excellent advice from you!

Reply
Ross
12/9/2021 11:40:22 am

In the U.S. we have the national electric code, the N.E.C. Have you ever seen that book? Yes, it takes years of work experience and study to get licensed and for good reason and it is updated every few years. Every code is written in blood and there for a reason. You do not want shoddy electrical work anywhere around you. Trust.

Another thing that wasn't mentioned was doing bids. If you're not charging for bids but going to the site to bid on it, you have to recover those costs somewhere too.

Reply
Kristofer Van Wagner link
1/30/2022 05:44:52 pm

Thanks for breaking down and explaining why electrical services can be pricey. I do agree that because it is a handy skill, it makes sense for the fees to be costly as it requires professional training. I will definitely keep this information in mind when I look to hire an electrician for my home.

Reply
Eli Richardson link
4/1/2022 03:23:35 pm

It really helped when you talked about electricians and how they have years of experience. The other day, I started noticing how my electrical outlets made some buzzing sounds. I think it'd be wise to hire an electrician to check my electrical system, so I'll do it without complaining about their fees. Thank you for helping me understand why an electrician's job should be well-compensated.

Reply
Jeff Carbine link
4/2/2022 09:05:39 am

I appreciate that you explained that almost every item installed by an electrician today is a "smart" device, which requires programming and comes with a remote or a phone app. My cousin-in-law told me last week that he is searching for a professional electrician to help him with his plans to construct an office complex. He's making certain he hires the most dependable electrician for the job. This is a great reference for him to use while looking for an electrician.

Reply
Victoria Addington link
4/12/2022 02:36:59 pm

It was fascinating to know that electricians are included in the top five highest-paid non-degree jobs. That's probably the reason why
electrical contractors are expensive. But regardless, I think their job is essential to maintain the safety in our neighborhood and even commercial industry.

Reply
Steven link
5/29/2022 04:06:15 am

It may seem easy to install or repair electrical systems, but it may not be ideal if you want to ensure safety for yourself and your property. It is advisable to get professional help from Steven Gratigny Electric service company.
We are locally owned and operated out of Santa Barbara, which makes us part of the community. We value our customers a lot, and that’s why we have many returning clients. Above all, we take tremendous pride in our work, and are the best around.

Reply
Steven Gratigny Electric link
6/4/2022 09:53:45 am

Are you considering getting a new ceiling fan for your room? Do you have a ceiling fan that needs to be repaired or replaced? If that’s the case, we can assist and help you. Fans are a lovely addition to any room, but they are also practical in that they help cut down on air conditioning bills when the weather becomes hot.

Reply
plumbing services link
12/31/2022 04:26:24 am

Nice post, Plumbing services, It really helped me to enhance my knowledge. Keep on sharing such kinds of posts in the future also

Reply

Reply
electrician near me link
2/16/2023 08:50:30 am

If the cost charged by a tradesperson (i.e. handyman, general contractor) for performing electrical work, that should raise red flags. In many areas, electrical work can only be legally performed by a licensed electrician, hence the higher price point.

Reply



Leave a Reply.

    Author

    Natalie Hogan, Office Manager and Co-Owner, CWC Electric, LLC

    Archives

    October 2020
    June 2020
    February 2019
    December 2018
    April 2018
    February 2018
    March 2017
    January 2017
    November 2016
    June 2016
    April 2016
    January 2016
    November 2015
    September 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014

    RSS Feed

CWC Electric, LLC, is a Kansas Limited Liability Company.  The information on this website may not be used without the express written consent of CWC Electric, LLC.  The presentation and content of this site shall constitute a proprietary work, protected under applicable intellectual property law. It may not be fully or partially reproduced and/or represented without the express written consent of CWC Electric, LLC.  The CWC Electric, LLC name, and any logo, slogan and trademark are the property of CWC Electric, LLC.  Any reproduction, use and/or modification thereof without the express written consent of CWC Electric, LLC, is prohibited.  The information provided on this site is general in nature, and may be modified at any time and without notice.  CWC Electric, LLC shall not assume any responsibility or liability for any use of the information contained herein.