How much does it cost to employ a cleaner beyond the wage?

Budget 22-30% on top of the hourly wage in 2026. On an $18/hour cleaner that means about $21.40 loaded: 7.65% FICA, roughly 0.6% FUTA after the state credit, 1-6% SUTA, and workers' compensation at 3-12% of payroll for cleaning classifications. Health benefits or generous PTO push the total past 25%.

Do I have to pay cleaners for driving between houses?

Yes. Under the FLSA, travel between job sites during the workday is paid time and counts toward the 40-hour overtime threshold. Home to first job and last job to home is normally an unpaid commute — unless the crew reports to your shop first, which starts the workday. Some states, including California, are stricter.

Can I pay cleaners per job instead of hourly?

Yes, piece rate is legal, but you must still track actual hours and make sure the effective hourly rate meets the highest applicable federal, state or local minimum wage every week. Overtime is calculated on the regular rate, which includes piece-rate earnings and nondiscretionary bonuses — not just a base hourly figure.

What percentage of revenue should payroll be for a cleaning company?

Field labor including burden should be 40-50% of revenue for residential cleaning and 45-55% for commercial janitorial. Above 55% usually signals underpricing rather than a slow crew. Track it monthly by service line, because recurring maintenance cleaning and one-time deep cleans have very different labor profiles.

Are tips part of payroll for a cleaning business?

Yes. Tips are taxable wages and must be reported and processed through payroll, whether the client pays cash, adds them to a card payment, or sends them through an app. Employees report tips to you, you withhold on them and include them on the W-2. Handing tips over off the books creates both tax and wage-claim exposure.

Payroll for a Cleaning Business: 2026 Guide

Payroll is the largest line item in a US cleaning company and the one most likely to be calculated wrong. In 2026 a healthy residential company spends 40-50% of revenue on field labor including taxes and workers' comp; commercial janitorial runs 45-55%. On top of the wage itself you carry 22-30% in burden: 7.65% FICA, federal and state unemployment, and workers' comp premiums that range from 3% to 12% of payroll for cleaning classifications. This guide covers how to pay cleaners, what counts as paid time, what the burden really costs, and where owners create back-pay liability without knowing it.

Should cleaners be W-2 employees or 1099 contractors?

If you set the schedule, assign the houses, supply the products and tell the cleaner how the work is done, that person is an employee in nearly every state — regardless of what the agreement says. Misclassification is the single most expensive payroll mistake in this industry: back wages, unpaid payroll taxes, penalties, and a workers' comp audit that back-charges premium on every dollar you paid to uninsured contractors. States including California, Massachusetts and New Jersey apply an ABC test that makes contractor status nearly impossible for cleaners doing your core service. True 1099 relationships in cleaning look like a licensed, insured company that sets its own price, brings its own equipment, serves other clients, and can send a substitute.

How should you pay cleaners: hourly, per job, or percentage?

Each model changes the behavior you get. Pick deliberately:

Hourly ($16-$24 in most US markets in 2026, $20-$28 in high-wage metros): simplest, fully compliant, but pays the same for a fast cleaner and a slow one.
Per job / piece rate ($45-$90 per standard house depending on size): rewards speed, but you must still track hours and top up to at least minimum wage for every hour worked, plus overtime calculated on the regular rate.
Percentage of the job (typically 30-40% of the ticket for solo cleaners, 25-30% each in a two-person crew): scales with price increases and aligns the cleaner with upsells. Same minimum wage and overtime obligations apply.
Hourly plus performance bonus ($1-$3 per job for perfect photo proof, zero complaints, on-time arrival): the model most companies land on after trying the others.
Team lead differential of $2-$4 per hour for the person responsible for quality, keys and the client conversation.

Do you have to pay for drive time between jobs?

Yes. Under the federal Fair Labor Standards Act, travel between job sites during the workday is compensable time. The ordinary commute from home to the first job and from the last job home generally is not — but the moment a cleaner stops at your office or shop to pick up supplies or a coworker, the workday has started and everything after that is paid. Several states, California among them, are stricter still and treat time under your control as hours worked. Practical rules that keep you out of trouble:

Pay all site-to-site drive time at the regular rate; it counts toward the 40-hour overtime threshold.
If crews meet at a shop first, the clock starts there — do not treat the drive to the first house as an unpaid commute.
Reimburse mileage for personal vehicles at the current IRS business rate, or pay a documented vehicle allowance. Reimbursements are not wages, but they must be substantiated.
Time spent loading supplies, restocking the van, and mandatory meetings is paid time.
Keep the GPS or clock-in record; in a wage dispute the employer without records loses by default.

What does an employee actually cost above the wage?

Take a cleaner at $18 an hour in 2026 and add the burden:

FICA (Social Security and Medicare), employer share: 7.65% = $1.38.
FUTA: 6% on the first $7,000 of wages, usually reduced to 0.6% with the state credit — about $0.11 per hour early in the year.
SUTA (state unemployment): 1-6% depending on your state and experience rating — call it $0.45.
Workers' compensation: cleaning classifications typically run 3-12% of payroll — call it 5%, or $0.90.
Paid time off, if you offer it, and any state-mandated sick leave: 2-4%, roughly $0.55.
True cost: about $21.40 per hour, or 19% above the wage. Add health benefits and it clears 25%.

This is why bidding at a wage number instead of a loaded cost number quietly destroys margin. Every quote should be built on the loaded rate.

How do overtime and minimum wage apply to cleaning crews?

Federal law requires 1.5x the regular rate for hours over 40 in a workweek, and the regular rate includes nondiscretionary bonuses and piece-rate earnings — not just the base hourly figure. California adds daily overtime after 8 hours and double time after 12. The federal minimum wage remains $7.25 an hour, but more than half of states set higher floors, and many cities set higher ones still; you owe the highest of federal, state and local. If you pay per job or by percentage, you must reconstruct the effective hourly rate each week and top up any week where it fell below the applicable minimum. Piece rate is legal; skipping that reconciliation is not.

How does CleanOS make payroll a 20-minute task?

The hard part of cleaning payroll is not the math, it is knowing who worked which job for how long. CleanOS captures clock-in and clock-out at the property, tracks drive time between jobs, and attaches tips and job bonuses to the right person automatically. At the end of the pay period you review a single sheet: hours per cleaner, overtime flagged, tips, reimbursements and deductions. Contractor payments accumulate against each W-9 all year, so the 1099 export at tax time is a download instead of a reconstruction. The same records also answer a workers' comp audit or a wage claim without a weekend of spreadsheet archaeology.

What are the payroll mistakes that cost the most?

Classifying regular cleaners as 1099 contractors — back taxes, penalties and a retroactive workers' comp premium.
Not paying site-to-site drive time, the most common wage claim in this industry.
Calculating overtime on the base rate instead of the regular rate that includes bonuses and piece-rate pay.
Paying tips through the wrong channel or not reporting them — tips are taxable wages and must run through payroll.
Missing pay frequency rules; many states require semimonthly or biweekly pay and penalize late payment per employee per day.
Discarding time records early. The FLSA requires payroll records for three years and time and earnings records for two — most attorneys advise keeping four.
Running payroll from memory or texts. If it is not in a system, it does not exist when someone disputes it.

What should payroll cost as a percentage of revenue?

Field labor plus burden should land at 40-50% of revenue for residential and 45-55% for commercial janitorial. Above 55% you cannot cover supplies, vehicles, insurance, admin and profit — the problem is usually pricing, not the crew. Below 35% you are either underpaying relative to your market, which shows up as turnover within two quarters, or you are counting owner labor as free. Track the percentage monthly per service line rather than annually across the whole company; recurring residential and one-time deep cleans usually have very different labor profiles, and the average hides the one that is losing money.

Pay people correctly, pay for all the time you control, build quotes on the loaded hourly cost, and keep the records. Payroll rules vary by state and change every year — verify your specific obligations with a payroll provider or a CPA in your state before you set pay models in writing.