The True Cost of Bringing Someone On
You’re maxed out. Projects are backing up. You’ve turned down three jobs this month because you can’t get to them. Hiring help seems like the obvious solution. But that $18/hour helper actually costs $60,000 or more in total annual burden—and that’s before counting the hidden costs that don’t show up on any paycheck.
Understanding the real math of employment helps you decide if hiring makes sense, and how to structure the position for success.
Breaking Down the $60,000
Base Wage
$18/hour × 2,080 hours (full-time) = $37,440
That’s just the starting point. $18/hour is entry-level for someone who needs training. Experienced woodworkers command $22-$35/hour depending on location and skills.
Payroll Taxes (Employer Portion)
- Social Security (6.2%): $2,321
- Medicare (1.45%): $543
- Federal unemployment (0.6%): $225
- State unemployment (varies, ~3%): $1,123
Subtotal: ~$4,212
Workers’ Compensation Insurance
Woodworking is classified as hazardous work. Typical rates: $6-$15 per $100 of payroll.
At $10 per $100: $3,744
Benefits (If Offered)
- Health insurance contribution: $3,600-$12,000/year
- Retirement plan matching: $0-$2,000/year
- Paid time off (10 days): $1,440 (wage cost for non-productive time)
Subtotal: $5,000-$15,000
Training and Onboarding
- Your time training (100+ hours at your shop rate): $5,000-$10,000
- Reduced productivity during learning curve: $2,000-$5,000
- Material waste during training: $500-$1,500
Subtotal: $7,500-$16,500
Overhead Allocation
- Additional workspace: $1,000-$3,000/year
- Tools and equipment for employee: $1,000-$5,000 (amortized)
- Additional insurance (general liability increase): $500-$1,500
- Administrative time (payroll, scheduling, management): $2,000-$4,000
Subtotal: $4,500-$13,500
Total First-Year Cost
$37,440 + $4,212 + $3,744 + $5,000 (min benefits) + $7,500 (min training) + $4,500 (min overhead) = $62,396 minimum
With full benefits and higher training costs, this reaches $80,000+.
The Revenue Requirement
To break even on a $60,000 employee cost, you need additional revenue. At typical woodworking margins:
- At 30% net margin: Need $200,000 additional revenue
- At 40% net margin: Need $150,000 additional revenue
- At 50% net margin: Need $120,000 additional revenue
Can your shop realistically produce $120,000-$200,000 more work with one additional person? If you’re currently doing $150,000, you’re talking about nearly doubling output. Is that demand actually there?
When Hiring Makes Sense
You’re consistently turning down work: Not occasionally, but regularly. Track declined jobs for 3-6 months. If you’re leaving $100,000+ on the table annually, hiring starts to make sense.
You’re working unsustainable hours: 70-hour weeks aren’t a long-term strategy. If you’re burning out, something has to change—hire help or reduce volume.
Bottlenecks are labor-related: If your limiting factor is hands, not equipment or space, additional labor directly addresses the constraint.
You can delegate effectively: If all tasks require your judgment, another person doesn’t help. You need work that can be handed off—sanding, finishing, material prep, delivery.
When Hiring Doesn’t Make Sense
Inconsistent demand: If your workload varies dramatically, a part-time or contract arrangement might be better than full-time employment.
Space constraints: Adding a person to an already cramped shop creates friction and safety issues.
Equipment limitations: If you only have one table saw, two people can’t both use it. Equipment utilization may be your actual bottleneck.
Quality concerns: If your reputation depends on work being “done by you,” delegation threatens your value proposition.
Alternatives to Full-Time Employment
Part-Time Employee
20 hours/week reduces base cost by half while providing consistent help. Still requires workers’ comp and payroll taxes.
Independent Contractor
Legitimate contractor relationships have different requirements:
- Must control their own work methods
- Set their own hours
- Provide their own tools (generally)
- Work for multiple clients
Don’t misclassify employees as contractors—IRS penalties are severe.
Task-Specific Subcontracting
Hire specialists for specific operations:
- Finishing (dedicated spray shops)
- CNC machining
- Upholstery
- Delivery and installation
Pay per-piece or per-project without ongoing employment obligations.
Temporary/Seasonal Help
Bring on help for known busy periods (holiday orders, specific large projects). Staffing agencies can provide workers with lower administrative burden.
Finding the Right Person
Skills vs. trainability: Experienced woodworkers command higher wages but produce faster. Eager learners cost less but require months of training investment.
Where to look:
- Woodworking schools and community college programs
- Trade associations
- Local woodworking clubs
- Social media woodworking groups
- Craigslist and Indeed
- Word of mouth in maker communities
Trial periods: Consider a 90-day probationary period with explicit evaluation criteria. Some shops do paid “working interviews” for a day before making offers.
The Management Challenge
Hiring transforms your job. You’re no longer just a woodworker—you’re now a manager. This requires:
- Clear instruction: Can you explain your methods systematically?
- Quality standards: What’s acceptable and what isn’t? Written criteria help.
- Scheduling: Planning work so employee is productively occupied
- Feedback: Regular communication about performance
- Documentation: Time tracking, performance records, policy compliance
Many solo woodworkers underestimate how much time management consumes. Budget 5-10 hours weekly for supervision and administrative tasks.
Legal and Administrative Requirements
Before your first hire:
- Employer Identification Number (EIN): Register with IRS if you don’t have one
- State employment registration: Register as employer with state tax authority
- Workers’ compensation insurance: Required in most states
- Employment eligibility verification: I-9 form for every employee
- Withholding setup: Income tax, Social Security, Medicare
- Unemployment insurance: State and federal registration
- Labor law posters: Required workplace postings
- Employee handbook: Policies on attendance, safety, conduct
Consider using a payroll service (Gusto, QuickBooks Payroll, ADP) to handle tax filings and compliance. Cost: $40-$100/month for one employee. Worth it to avoid mistakes.
Making the Decision
Answer these questions honestly:
- What specific tasks will this person perform?
- Do you have 40 hours of delegatable work weekly?
- What additional revenue will their work generate?
- Can you afford 6 months of wages while they come up to speed?
- Do you have space and equipment for another person?
- Are you prepared to spend 10+ hours weekly on management?
- What happens if this doesn’t work out? (Termination costs, unemployment claims)
If you can’t confidently answer these questions, you’re not ready to hire.
The Bottom Line
Your first employee doesn’t cost $18/hour—they cost $30/hour or more when you account for all expenses. That $60,000+ annual burden needs to generate significant additional revenue to make sense.
Hiring can transform a struggling solo operation into a thriving business. But it can also sink a business that wasn’t ready. Do the math, consider alternatives, and hire only when the fundamentals clearly support it.
And when you do hire? Treat that person well. Good employees are rare in skilled trades, and the cost of turnover—recruiting, training, lost productivity—dwarfs any wage savings from cutting corners.
