Builders hourly rates

[Learning]

Yes they may take home the same as someone earning $50 hr as a wage earner, but as sole traders or under a LTD they would legally pay less tax than a PAYE. Plus get the GST off too. If you can get the work you're better off working for yourself.

That's a bit generous Donna. I'm self employed and I keep roughly half my hourly rate after tax, general and business expenses. To be fair that is better that I was getting as a wage earner but the risks I carry are far greater. Paying my own ACC and insurances (multiple) takes a big chunk. I leave 10% to cover holidays, sick pay and hard times. Any profit left in the company account gets taxed at 30% I believe. Anything I stick in my own pocket gets taxed at 33%. Not sure why you think we pay less tax than PAYE employees.

[DaveW]

as well as wasting time quoting jobs they dont get and the owner never bothers to tell them

The tradie should at least be informed if you don't accept their quotation. They may adjust it.
You don't get if you don't ask!

[DaveW]

I'm planning on doing a new build next year (based in Auckland) and have been looking for licensed builders who are willing to work for wages only.

The quotes I'm getting are between $60 - $70 per hour plus GST for experienced builders and $35-$40 for apprentices.

I think this is high but not over the top.

Ideally, I think somewhere in the $50's is where the fair market value should be long term.

Does anybody know any experienced builders willing to work for, or less than, $60 per hour plus GST? If so please PM me their contact details.

Cheers.

That's a good idea labour only, then you choose your own materials.
Are you managing the build yourself?
You could have the builder phase by phase. Eg. structure first, then you need the electrician and plumber, then the builder back again for the next phase.
I would get quotes from each tradie, for each phase.

[Ogg]

That's a good idea labour only, then you choose your own materials.
Are you managing the build yourself?
You could have the builder phase by phase. Eg. structure first, then you need the electrician and plumber, then the builder back again for the next phase.
I would get quotes from each tradie, for each phase.

Yes, I'm going to manage the build myself.

Most builders I've talked to prefer to do contract only and want to handle the project from start to finish. The ones that do offer labour only, seem to want at least $65 per hour plus GST. A yearly salary at that rate works out to be $135,000 per year, which is high, at almost twice the medium wage for the average Aucklander. However, after expenses it's probably a bit less. Still, a decent take home pay for an occupation that requires minimal education and less than 5 years experience. Not to mention a business with almost no barrier to entry and little start up capital required.

According to "payscale" ( https://www.payscale.com/research/NZ...er/Hourly_Rate ) the average rate for a builder in NZ is $25 per hour. Yet, finding a builder in Auckland for twice that amount is unheard of. How can that be?

Obviously, with high demand prices go up but is supply and demand the real issue?

It seems like there are two rates in NZ. The "immigrant rate", ie the typical Chinese/Indian/Filipino worker employed at a large building company or working out of Albany. Then there's the "cowboy rate", ie the average 30-40 year old something kiwi bloke doing renovations in Ponsonby or Devonport.

The real issue is how do you get these two groups to compete with each other and integrate together into the market place. I don't want to exploit hard working immigrants and hire a translator, but I also don't want to get ripped off paying some young kiwi bloke who dropped out of high school.

Where else can you go? There's Builderscrack, TradeMe or the local newspaper? Either that or drive around town looking for building signs. It seems like most builders don't even advertise these days - by the time they've finished one job they have another lined up, mostly through word of mouth.

When you ask them to quote on a job, they just send it to Carters or Fletchers and they work out how much. Then they just slap on a 20% margin and charge themselves out at their regular rate. If you reject their quote, the price is almost exactly the same elsewhere. It's as if there's no competition at all in the industry, the prices are all fixed.

The biggest problem seems to be trust. The average New Zealander doesn't trust immigrant workers, or if they charge a cheaper rate, they mustn't be any good. Most people just seem to hire a builder because they did a job for their friend or because "he's local".

There really needs to be some kind of nation wide auction faculty or some kind of official review system that keeps track of builder work details. Similar to what Uber did to the Taxi industry, where by it created a level and open playing field that encouraged competition and put more emphasis on driver reviews and profiles. This lead to lower prices, greater trust, and more efficiency. Maybe one day this will happen to builders.

[DaveW]

Yes, I'm going to manage the build myself.

Most builders I've talked to prefer to do contract only and want to handle the project from start to finish. The ones that do offer labour only, seem to want at least $65 per hour plus GST. A yearly salary at that rate works out to be $135,000 per year, which is high, at almost twice the medium wage for the average Aucklander. However, after expenses it's probably a bit less. Still, a decent take home pay for an occupation that requires minimal education and less than 5 years experience. Not to mention a business with almost no barrier to entry and little start up capital required.

According to "payscale" ( https://www.payscale.com/research/NZ...er/Hourly_Rate ) the average rate for a builder in NZ is $25 per hour. Yet, finding a builder in Auckland for twice that amount is unheard of. How can that be?

Obviously, with high demand prices go up but is supply and demand the real issue?

It seems like there are two rates in NZ. The "immigrant rate", ie the typical Chinese/Indian/Filipino worker employed at a large building company or working out of Albany. Then there's the "cowboy rate", ie the average 30-40 year old something kiwi bloke doing renovations in Ponsonby or Devonport.

The real issue is how do you get these two groups to compete with each other and integrate together into the market place. I don't want to exploit hard working immigrants and hire a translator, but I also don't want to get ripped off paying some young kiwi bloke who dropped out of high school.

Where else can you go? There's Builderscrack, TradeMe or the local newspaper? Either that or drive around town looking for building signs. It seems like most builders don't even advertise these days - by the time they've finished one job they have another lined up, mostly through word of mouth.

When you ask them to quote on a job, they just send it to Carters or Fletchers and they work out how much. Then they just slap on a 20% margin and charge themselves out at their regular rate. If you reject their quote, the price is almost exactly the same elsewhere. It's as if there's no competition at all in the industry, the prices are all fixed.

The biggest problem seems to be trust. The average New Zealander doesn't trust immigrant workers, or if they charge a cheaper rate, they mustn't be any good. Most people just seem to hire a builder because they did a job for their friend or because "he's local".

There really needs to be some kind of nation wide auction faculty or some kind of official review system that keeps track of builder work details. Similar to what Uber did to the Taxi industry, where by it created a level and open playing field that encouraged competition and put more emphasis on driver reviews and profiles. This lead to lower prices, greater trust, and more efficiency. Maybe one day this will happen to builders.

Yes you organize the materials directly from the suppliers. No 20% markup.

If you go with a contractor yes you're effectively paying top dollar. Prices vary between contractors.
Since you are prepared to manage the build yourself to save on costs then you do as most contractors do and hire the immigrant workers, but you check on them daily, and your architect also checks on them periodically.
You get the English speaking workers or you hire a foreman.

[Wayne]

Most builders I've talked to prefer to do contract only and want to handle the project from start to finish. The ones that do offer labour only, seem to want at least $65 per hour plus GST. A yearly salary at that rate works out to be $135,000 per year, which is high, at almost twice the medium wage for the average Aucklander. However, after expenses it's probably a bit less.

As has been pointed out the $65/hr doesn't become $135k to the builder.
For a start they have to cover their holidays and stat days + sick, around 35 days they would get paid as a worker but not as a contractor (13% drop right there).
Then they have to cover their overheads - they don't get paid while billing you etc.
They cover their own tools - they aren't free and don't last forever (sure they can depreciate them but that covers 33% of the cost).
Of course there is on-going training required to continue to be a LBP - not free and takes time.

The Build magazine had an article a few years back about chargeout rates. I can't find the one that I was looking for but this one goes there

https://www.buildmagazine.org.nz/articles/show/setting-charge-out-rates

A wage of $30/hr requires a charge-out rate of $49.50 + GST.

One question - do you want a good builder or a cheap builder - you probably can't have both.

[Wayne]

Builders doing labour only and those employing them take a risk.
There is a lot of trust involved.
You run the risk that the builder will waste time to get the income.
The builder runs the risk that you'll accuse them of wasting time and try to reduce their bill.

The builder I have used has always been great - I trust him, he trusts me, the job gets done well.

[Ogg]

As has been pointed out the $65/hr doesn't become $135k to the builder.
For a start they have to cover their holidays and stat days + sick, around 35 days they would get paid as a worker but not as a contractor (13% drop right there).
Then they have to cover their overheads - they don't get paid while billing you etc.
They cover their own tools - they aren't free and don't last forever (sure they can depreciate them but that covers 33% of the cost).
Of course there is on-going training required to continue to be a LBP - not free and takes time.

The Build magazine had an article a few years back about chargeout rates. I can't find the one that I was looking for but this one goes there

https://www.buildmagazine.org.nz/articles/show/setting-charge-out-rates

A wage of $30/hr requires a charge-out rate of $49.50 + GST.

One question - do you want a good builder or a cheap builder - you probably can't have both.

I've seen that article and similar ones from Carters and Fletchers. Those articles are grossly over exaggerated and don't resemble or reflect what actually happens in real life.

For a start builders work all year round, they don't take sick leave. Only teachers take sick leave. I own a small business myself and I never take days off.

Builders work on all days. If it's a Sunday they might do accounts/invoicing or they have their own personal projects on the side as well, (like renovating their own house or rental property) so there's always something they have going on or are making money on.

Thanks to globalization, tools are cheap and most tools last forever. The ones that need replacing are generally made from China and sold at Bunnings for almost nothing. Cars are cheap too. Every builder is driving around in a late model ute or van. Even their wife's cars are registered under the business. There's loads of other benefits too, like mobile phone expenses. All of this is extra "income". The typical kiwi builder is making money and hassling every day. Not to mention doing loads of "cashies" on the side too.

The only legitimate costs, are probably Xero accounting system and a rented premises, like a small warehouse for $500 per week max. No builder is complaining as everything is sweet right now in the middle of a building boom. Almost every high school kid wants in on this too. Even the government is running TV ads encouraging more young people to get into the industry.

I don't have a problem with all this. Good on them all! However, just like the Taxi workers who got disrupted with Uber the same needs to happen with builders.

What's the difference between an Uber driver and a builder? An Uber driver has expenses, runs a business, needs to get licensed, and works long hours. They are in charge of your safety when they drive you, yet they are not paid $65 per hour plus GST. A good Uber driver gets more work, they don't get paid more. The same should apply to builders.

Finding a builder should be like finding an Uber driver.

[Wayne]

I've seen that article and similar ones from Carters and Fletchers. Those articles are grossly over exaggerated and don't resemble or reflect what actually happens in real life.

For a start builders work all year round, they don't take sick leave. Only teachers take sick leave. I own a small business myself and I never take days off.

Builders work on all days. If it's a Sunday they might do accounts/invoicing or they have their own personal projects on the side as well, (like renovating their own house or rental property) so there's always something they have going on or are making money on.

Thanks to globalization, tools are cheap and most tools last forever. The ones that need replacing are generally made from China and sold at Bunnings for almost nothing. Cars are cheap too. Every builder is driving around in a late model ute or van. Even their wife's cars are registered under the business. There's loads of other benefits too, like mobile phone expenses. All of this is extra "income". The typical kiwi builder is making money and hassling every day. Not to mention doing loads of "cashies" on the side too.

The only legitimate costs, are probably Xero accounting system and a rented premises, like a small warehouse for $500 per week max. No builder is complaining as everything is sweet right now in the middle of a building boom. Almost every high school kid wants in on this too. Even the government is running TV ads encouraging more young people to get into the industry.

I don't have a problem with all this. Good on them all! However, just like the Taxi workers who got disrupted with Uber the same needs to happen with builders.

What's the difference between an Uber driver and a builder? An Uber driver has expenses, runs a business, needs to get licensed, and works long hours. They are in charge of your safety when they drive you, yet they are not paid $65 per hour plus GST. A good Uber driver gets more work, they don't get paid more. The same should apply to builders.

Finding a builder should be like finding an Uber driver.

Uber is not a good example - Global exploitation at its worst.
You seem to want it to be a race to the bottom.

I love you teachers comment - shows where you are at (schools really need teachers who are sick in front of classes (probably the kids who made them sick in the first place because parents wouldn't keep them home as that would cost them for child care so let the school look after them)).

Good luck with finding a builder who suits you given your attitude.

[Ogg]

Uber is not a good example - Global exploitation at its worst.
You seem to want it to be a race to the bottom.

I love you teachers comment - shows where you are at (schools really need teachers who are sick in front of classes (probably the kids who made them sick in the first place because parents wouldn't keep them home as that would cost them for child care so let the school look after them)).

Good luck with finding a builder who suits you given your attitude.

So what do you want me to do? Pay a builder $65 per hour plus GST, then become an Uber driver on the side to help pay for it?

I need to make $100 per hour before tax to pay for that builder.

How much does a teacher make these days, with a 3 year degree and one year teachers college? Maybe $55k.

I don't want to see a race to the bottom. More of a race to the middle.

All I'm saying is where can I find a builder for $50 per hour in Auckland willing to work on a new build for 6 months?

[Learning]

All I'm saying is where can I find a builder for $50 per hour in Auckland willing to work on a new build for 6 months?

You answered your own question.

Almost every high school kid wants in on this too.

[Ogg]

You answered your own question.

They can't sign off on the work though as they're not a LBP.

The young kids get charged out at $40 per hour, but only if you hire their older supervisor at $65 per hour.

When they're finally old enough to get their LBP they leave and setup their own company, and the cycle repeats.

There's no middle ground.

[Wayne]

So what do you want me to do? Pay a builder $65 per hour plus GST, then become an Uber driver on the side to help pay for it?

I need to make $100 per hour before tax to pay for that builder.

How much does a teacher make these days, with a 3 year degree and one year teachers college? Maybe $55k.

I don't want to see a race to the bottom. More of a race to the middle.

All I'm saying is where can I find a builder for $50 per hour in Auckland willing to work on a new build for 6 months?

I don't care what you do.
Pay relativity has nothing to do with it - are you saying that what you earn (doing whatever you do now) is worth more than the builder? If so build it yourself.

The teacher isn't a builder so what does it matter what they earn?

If you can't find a builder willing to work for $50/hr in Auckland you will have to pay more - simple economics 101, supply and demand!
Same reason people have to pay so much rent these days - they'd like to pay less but can't.

Start living in the real world.

[Ogg]

I don't care what you do.
Pay relativity has nothing to do with it - are you saying that what you earn (doing whatever you do now) is worth more than the builder? If so build it yourself.

The teacher isn't a builder so what does it matter what they earn?

If you can't find a builder willing to work for $50/hr in Auckland you will have to pay more - simple economics 101, supply and demand!
Same reason people have to pay so much rent these days - they'd like to pay less but can't.

Start living in the real world.

It's not a supply and demand issue.

Taxis didn't all of a sudden become cheaper because there were more cab drivers. It was because Uber changed the way the market operated.

There's a shortage of teachers but you don't see the price of their salary sky rocketing!

Teachers are employed by the government, and taxi drivers are held accountable to a large global technology company.

The myth that there is some how an under supply of builders is false. The way the building industry is setup is the problem.

I can't find a builder for $50 per hour because it's not a free market place. The system is broken.

Like I said before, it's not way out of wack, it's about 30% overvalued. Not heaps, but a significant amount.

[Wayne]

It's not a supply and demand issue.

Taxis didn't all of a sudden become cheaper because there were more cab drivers. It was because Uber changed the way the market operated.

There's a shortage of teachers but you don't see the price of their salary sky rocketing!

Teachers are employed by the government, and taxi drivers are held accountable to a large global technology company.

The myth that there is some how an under supply of builders is false. The way the building industry is setup is the problem.

I can't find a builder for $50 per hour because it's not a free market place. The system is broken.

Like I said before, it's not way out of wack, it's about 30% overvalued. Not heaps, but a significant amount.

Teachers again (did you have a bad experiance at school?) - some would say that the pay rise they negotiated is massive but they are unionised and mostly have 1 boss (the Govt). Chaulk and cheese comparison.

Not a supply and demand thing?
Why do you have to pay so much then?
If there are plenty of builders then you'd think some would be hungry enough to take a lower rate. Or did they act like a big cartel, get together in the pub and decide what they'd all charge?

What's not free about the market? They are independant contractors!
Could it be that you have this wrong?