Payroll expense is the single, largest expense for childcare centers, pre-schools and Montessori schools. It’s also the expense that is most likely to get out of hand and ruin your profit margin.
Over the years, we’ve seen payroll costs (excluding payroll taxes) vary from a low of 38% of Gross Revenue to a high of more than 70% of Gross Revenue. Generally speaking, it should be about 45%. If it’s higher than 50% of your Gross Revenue, then you should analyze the expense and make sure your funds are being allocated appropriately.
If you have any questions, please don’t hesitate to contact us either through our website at bfsinc.net or by calling our toll free number at 800-467-1774.
Click Here to view additional blog posts on managing your childcare company, Montessori, preschool, special needs school, or preschool more effectively.
Our new book How 1000s of Childcare Centers and Schools Are Making Millions is now available in hardback, Kindle, and Nook so you and your directors can reference the information whenever and wherever you need it. Click Here to order your copy today.
(Legal Disclaimer: Always consult the proper professionals before taking action. By and before the use of the information provided herein, reader agrees that BFS® is not responsible for viewer’s actions related to said information.)
Listen to an enhanced audio version of this article below...