IDEA: Divide total payroll by net sales: is the percentage rising or dropping?

If your total payroll dollars (OT, regular, commissions, vacation pay, SUTA, FUTA, social security match, medical and dental insurance and all other payroll benefits) are rising as a percentage, you are either consciously dropping your pricing or you are miscalculating your costs when bidding. Use all payroll for every head in the place. You need to give increases to your employees. That needs to be reflected in your pricing.  If the market does not accept price increases in your industry, look for other costs to cut or productivity gains to be made.

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