Background to labour rates
In South Africa, labour rates for electricians are negotiated by the Electrical Contractors Association in participation with the bargaining council. These rates are amended annually and the latest rates for 2018 were published and circulated by the ECA earlier this year. For more information on the rates, negotiation process and membership with the ECA, please contact the association directly.
Calculate total available labour hours per annum (52 weeks x 40 hours per week) = 2080 hrs, next deduct annual leave + statutory holidays of 3 weeks x 40 hours + 12 days x 8 hrs = 216 hrs, 2080 - 216 = 1864 hrs. Please see table 1 below on how the '1864-hrs' value should be applied.
| Direct overheads | Installation electrician | Artisan | Elconop 3 | Elconop 2 | Elconop 1 | Electrical assistant |
|---|---|---|---|---|---|---|
| Actual wage rate (1864 hrs) | 191898,8 | 158458,64 | 118084,4 | 111299,44 | 76405,36 | 62481,28 |
| Leave pay (15 days x 8hrs x rate) | 12354 | 10201,2 | 7602 | 7165,2 | 4918,8 | 4022,4 |
| Leave bonus (16 days x 8 hrs x rate) | 13177,6 | 10881,28 | 8108,8 | 7642,88 | 5246,72 | 4290,56 |
| Paid public holiday (12 days x 8hrs x rate) | 9883,2 | 8160,96 | 6081,6 | 5732,16 | 3935,04 | 3217,92 |
| ECA Levy (R12.71 x 52 weeks) | 660,92 | 660,92 | 660,92 | 660,92 | 660,92 | 660,92 |
| Bargaining Council Levy (4% of rate x 52 weeks) | 856,44 | 707,2 | 527,28 | 496,6 | 341,12 | 278,72 |
| Medical Scheme (R1685 x 12) | 20220 | 20220 | 20220 | 20220 | 20220 | 20220 |
| Pension / Provident fund(7,5% of rate x 52 weeks) | 16060,2 | 13261,56 | 9882,6 | 9314,76 | 6394,44 | 5229,12 |
| Sick pay fund (0.3% of rate x 52 weeks) | 642,2 | 530,4 | 395,2 | 372,84 | 255,84 | 209,04 |
| Skills development Levy (1% of rate x 52 weeks) | 2141,36 | 1768 | 1317,68 | 1241,76 | 852,8 | 697,32 |
| Workmen compensation (2.24% of rate x 52 weeks) | 4796,48 | 3960,84 | 2951,52 | 2782 | 1909,96 | 1561,56 |
| U.I.F (1% of rate x 52 weeks) | 2141,36 | 1768 | 1317,68 | 1241,76 | 852,8 | 697,32 |
| Total cost per annum | 274832,56 | 230579 | 177149,68 | 168170,32 | 121993,8 | 103566,16 |
| Minimum cost per hour for direct overheads (total 1864 hrs) | 147,44 | 123,7 | 95,04 | 90,22 | 65,45 | 55,56 |
| On-cost per hour - total direct overheads minus actual wage | 44,49 | 38,69 | 31,69 | 30,51 | 24,46 | 22,04 |
Additional overheads
In addition to the cost of labour, overheads must be calculated and added so as to ensure that all costs are taken into account when charging for work performed or to be performed. It would be almost impossible for the association to calculate the average overheads with any accuracy as this would vary widely from firm to firm.
However, when charging overheads the following needs to be taken into account:
- Training of apprentices,
- rent,
- municipal rates,
- lights and water,
- telephone,
- shop tools and testing equipment,
- advertising,
- audit fees,
- provision for bad debts,
- bank charges,
- office staff salaries and expenses,
- depreciation,
- sundries connected with office administration,
- office equipment depreciation,
- purchase of motor vehicles,
- insurance,
- miscellaneous expenses,
- lost and non-productive time.
- Lost and non-productive time would include: travel time to and from the work site, tea time(statutory 20 minutes per day equals 82 hours per annum, sick leave (10 days per annum = 80 hr per annum)