How a company charges for cleaning vs Self-employed house cleaners
Updated: Jul 14, 2020
There are 2 types of Self-employed housecleaners. One takes their cleaning job seriously enough to hold insurance, a bond, pay taxes, incorporate, and so on. We like to call this cleaner the Self-employed. While the other has no insurance, no bond, doesn't pay taxes, and isn't incorporated. They are what we call Moonlighters. How to tell which one you're getting? Self-employed will charge $25+ per hour. A moonlighter will charge $10-15.
The average cost in Arkansas is $25-$50 per hour. This can vary based on many factors.
Determine Your Hourly Rate
Moonlighters Hourly Wage: $10 an hour They Charge you: $12 an hour
Self-Employed Hourly Wage: $10 an hour They Charge you: $25+ an hour
Company Hourly Wage: $10 Per Cleaner They charge you: $45+ per Cleaner, per hour
So why such a difference in cost to the client? It's more simple than you might think.
charge for their pay of $10 per hour and if they bring their own chemicals they might charge $12 -$14 an hour to cover the chemical cost. They tend to buy their supplies from places like Walmart or the dollar store. That's there whole pricing stagey. Most tend to also prefer cash payment. They are essentially working under the table. They also have 0% overhead because they don't pay taxes, they don't have insurance, and so on.
What's the big deal my housecleaner does that an at least his/her family is taken care of?
Well, for one if you do not pay taxes it is very much so illegal. If caught it could land both you and the housecleaner in hot water. As a matter of fact, you could be in more trouble than them. Did you know, the IRS requires anyone with household help, such as a nanny, babysitter, dog walker, or housekeeper, to pay taxes. You'll need to pay Social Security, Medicare, Federal Unemployment Tax, federal and state income tax if their annual pay crosses over a certain threshold, which as of 2020 is $2,000.
Homeowner Loses More Than $15,000 by Hiring the Wrong Maid!
A homeowner named Arianna learned her lesson the hard way when a maid she hired broke an antique vase in her house worth over $12,000. What's more, when the vase broke, its shattered pieces caused serious wrist injury to the maid, which required emergency services and doctor’s bills costing over $3,000—and these necessarily had to be paid by the homeowner, Arianna, by law.
The worst-case scenario is if your maid suffers a catastrophic on-the-job injury—e.g., falling from a ladder or stairs in your home—that results in permanent disability or loss of function. When something like this happens, the injured maid is probably not entitled to state disability benefits or support under state worker’s comp laws—and you, the homeowner, would be responsible for paying exorbitant ongoing expenses associated with the maid’s injuries. This could potentially cost you a fortune or wipe out your life savings! So, in this case, they charge you for their time worked and maybe chemicals (some will even make you supply the chemicals) Essentially leaving you with the overhead taxes, Insurance, and so on.
charge for their pay of $10 per hour and bring their own chemicals. They also have to pay their insurance, bond, pay taxes, Etc. In this case, they charge you for their time worked and their overhead. This means you are not liable if they are hurt if they break something, or goodness forbids steal something. That cost to you will be covered by insurance and bonding. So they pocket $10 an hour and the rest goes to the insurance company, Uncle Sam, and products required to do the job. However, When you hire an individual cleaner, you are basically tied to his/her schedule and availability. What happens in case your house cleaner has things to do, errands that can’t be postponed, or gets sick on your cleaning day?
Whether its 1-5 employees or 100 the cost to do business as a legit cleaning company is far different than that of either mentioned above. This also varies based on the way the business is lined out. Do they have their employees drive their own cars? Do they own a fleet of cars? You have to pay your employees hourly wadge, all company overhead, Employee taxes, business taxes, owner taxes, marketing cost, franchise fees (if you're a franchise), and so on.
This means you are not liable if they are hurt if they break something, or goodness forbids steal something. That cost to you will be covered by insurance and bonding. So the cleaner pockets $10 an hour, the company gets a percentage, the owner gets a percentage and the rest goes to Uncle Sam. So, in this case, think of it like this; for one hour you're paying the company to take all the stress that comes along with being an employee service provider with no liability on your part. So you pay them $45 an hour which they then disperse between the employee, the owner, the business, and Uncle Sam. Uncle Sam can't, not be paid. He is a must and all smart businesses put his need for money before their own. The business can't function if it doesn't at least break even, however it can't grow without a profit margin. The business also can't survive if the owner is starving him/her self. Without the ower managing the business it will sink quicker than the Titanic did. Without paying their employees fair wages they can't maintain the level of service you expect.
So which is the Best Choice for you?
Avoid Moonlighters at all costs they may be cheap but one day they will cost you way more money. It's not will it happen, its when cause it will happen. If you want to save a little money but be sure your cost, in the long run, is covered and your secure? As long as your ok with the concept that you're tied to one person's schedule. Then hire a self-employed cleaner. if you want full consistent guaranteed service, no worrying about if they will show up or if they know what they are doing? Then Hire a cleaning company. Whichever you choose, pay the amount you agreed to because that is the honest cost for the self-employed or company to maintain business. If you're not willing or unable to pay a minimum of $25+ an hour, that's completely ok. You can simply do the cleaning yourself and save yourself that cost.
Innovative Cleaning Solutions is a cleaning company that provides Housecleaning services. If you are in need of a clean and don't have the time, book your FREE Estimate now! For more information about Innovative cleaning Solutions visit our website.
For the self-employed cleaner who second-guesses their pricing this video is for you. I'm sharing this from my friend Angela Brown - Ask a Housekeeper on youtube.