When to Hire Your First Cleaner: Employee vs Subcontractor

You’re booked. Someone asks if you can take their house and you hear yourself say you’ll check the calendar, knowing there’s nothing to check. That’s the moment people start thinking about hiring — and also the moment they discover that “I’ll pay her $22 an hour” is not what it costs.

Here’s the real number, what it earns you, and the single condition that decides whether the whole thing works.

What an Hour of Help Actually Costs

The wage is the beginning of the cost, not the end.

Employee at $22/hour — fully loaded

The 7.65% is fixed — 6.2% Social Security plus 1.45% Medicare — and it’s the employer’s half, on top of what comes out of her cheque. The other two lines are marked illustrative deliberately: workers’ compensation rates vary enormously by state and job classification, and unemployment rates vary by state and your own claims history. Get real quotes rather than borrowing my placeholders; cleaning is not a low-risk classification everywhere.

Round number: an employee costs about 15% more than their wage, before you count a minute of your time running payroll.

Subcontractor at $28/hour

No employer payroll taxes, no workers’ comp through you, no payroll filing — you issue a 1099-NEC and you’re done. But they price higher precisely because they’re carrying their own taxes, insurance and equipment. $28 is a realistic ask for someone doing that.

The employee is cheaper per hour. The subcontractor is cheaper in effort.

The part you can’t choose

You don’t get to pick the label. Classification follows the working relationship — the IRS applies common-law rules examining behavioural control (who decides how and when the work is done), financial control (who supplies equipment, who can profit or lose) and the type of relationship.

If you set the schedule, hand her your products, tell her which order to clean rooms in, and she works only for you — that pattern points toward employment no matter what the contract says. A genuine subcontractor brings their own supplies, sets their own methods, and typically has other clients.

Misclassification means back taxes, interest and penalties. If you’re unsure, Form SS-8 lets you ask the IRS to determine status, and an hour with an accountant costs far less than getting this wrong. This is one of the few decisions in a cleaning business where the cheap option can be genuinely expensive.

What an Hour of Help Earns

Take a standard $120 two-hour clean. Job costs from the pricing floor: $4 supplies, $12.16 mileage, $5 overhead = $21.16.

Doing it yourself nets $98.84 and costs 2.75 working hours — about $35.94 an hour of your time. Handing it to an employee nets $48.40 and costs you nothing but the phone call.

So hiring trades roughly half the profit for the hours back. Whether that’s a good trade depends entirely on what happens to the hours.

The One Condition

Hire when you are turning work away — not when you are tired.

That distinction is the whole thing. Run the two scenarios:

You hire and use the freed hours to sell. Maria takes four jobs a week off you. That’s 11 working hours a week — about 48 hours a month — handed back to you. You give up $50.44 of margin per job, roughly $874 a month across those 17 jobs, and spend the hours quoting. Land two new weekly $120 clients and you’ve added $1,039 a month in recurring revenue, permanently. The trade pays from month one and compounds every month after.

You hire and use the freed hours to rest. Same $874 a month of margin given away. Revenue unchanged. You have simply bought yourself time at a price of $874 a month — which may be a perfectly reasonable purchase, but it’s a lifestyle decision, not a growth one, and it’s worth being honest with yourself about which you’re making.

There’s a third scenario worth naming: you guarantee hours you can’t fill. Promise 20 hours a week at $25.22 and you’ve committed to $504 a week — about $2,184 a month — whether or not the work exists. Filled, those 20 hours are 10 jobs a week: $1,200 revenue, minus $504 labour, minus $212 job costs = $484 a week of profit, or roughly $2,096 a month. Excellent. Half-filled, you’re paying full price for half the return. Start with per-job or flexible hours until the demand is proven.

The Readiness Checklist

Before hiring, you want all five:

1. You’re declining work, or your calendar is full enough that you would have to. Demand first, capacity second.
2. Your prices clear the loaded rate with room. If a job barely covers $25.22 an hour of labour, there’s no margin to share. Fix pricing before hiring.
3. You know your margin per job — you can’t tell whether hiring helped if you didn’t know where you started.
4. You have 4–6 weeks of labour cost in reserve. Wages are due on payday regardless of whether a client pays late.
5. You’ve decided classification honestly and, ideally, checked it with an accountant.

Point 2 is where most first hires fail. Hiring doesn’t fix underpricing — it exposes it. A business running on $95 cleans has no room for a $25 labour hour, and adding staff to it just makes the losses arrive faster.

Tracking It Afterwards

Once someone’s working for you, two numbers decide everything: labour as a percentage of revenue, and margin before and after.

Log every shift — date, worker, hours, pay rate — so labour cost rolls into your monthly P&L automatically. Your margin will fall when you hire; that’s expected and correct, because free owner-labour has become paid labour. What matters is whether total net profit in dollars goes up. Margin percentage falling while profit dollars rise is a business scaling properly. Both falling means you hired too early, or priced too low to afford it.

Your cleaning business tracker should show you both, month over month, without you working anything out by hand.

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Cleaning Business Income & Client Tracker — $14.99

The Staff & Sub Pay tab turns hours × pay rate into labour cost and feeds it straight into the Dashboard’s monthly P&L, so you can see margin and net profit before and after your first hire. Job Schedule assigns a cleaner to each job and tracks hours; Settings holds your default labour rate. Nine tabs, sample data pre-filled, works in Excel and Google Sheets.

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Part of the complete guide to tracking a cleaning business. Nothing here is tax or legal advice — worker classification and payroll obligations vary by state, so confirm yours with a qualified professional.