P4P vs. Hourly Pay in Lawn Care: Why $50 an Hour Breaks Both

A question came up in a lawn care group recently that drew a long thread of replies, most of them arguing about the wrong thing:

“Those of you using P4P, what percentage are you using for crews of more than one person? Using 33% for two-man crews my guys make more hourly than P4P. It’s not the case of working hard either.”

The replies split into two camps. One said raise the percentage. The other said some version of your crew must be slow — P4P rewards hustle.

Both are arguing about how to slice a pie that’s too small.

Here’s the thing almost nobody says out loud in these threads: pay-for-performance and hourly wages don’t create money. They only divide it. Whichever one you pick, the same revenue walks in the door and the same hours get worked. The comp plan just decides who absorbs it when the numbers don’t work.

And at a $50-an-hour rate, the numbers don’t work. Under hourly, you eat the shortfall. Under P4P, your crew does. That’s the entire difference.

What each model actually does

Strip away the ideology and the two systems differ on exactly one thing: who carries the risk of a bad day.

	Hourly	P4P (percentage of revenue)
Who bears the risk of a slow day	You	The crew
What it rewards	Showing up	Finishing efficiently
What it punishes	Nothing, directly	Rain, breakdowns, bad routing, your pricing mistakes
Crew’s income	Predictable	Variable
Typical failure mode	Work expands to fill the day	Quality drops, or good people quit
Needs accurate job pricing	No	Absolutely
Needs a dense route	No	Absolutely

That last pair is where most P4P rollouts die. A percentage plan only functions if the crew can actually influence what they earn. That requires two things the owner controls, not the crew: prices that reflect the real cost of the job, and a route dense enough that finishing early means another stop rather than going home.

Miss either one and P4P stops being an incentive and becomes a pay cut with extra steps.

”Fifty an hour” is three different numbers

Before going further — this phrase causes more confusion in this industry than any other, because operators use it to mean three incompatible things:

1. Per truck, per clock hour — what the job bills divided by time on site.
2. Per man-hour — the same revenue divided by people × hours.
3. Per paid man-hour — the same again, but counting drive time, loading, and shop time.

Only the third one is real, because that’s what you actually pay for.

Take a normal residential stop: $50 a cut, 30 minutes on site with two people, 10 minutes of drive to the next stop.

Framing	Math	Result
Per truck-hour, on site	$50 ÷ 0.5 hr	$100/hr
Per man-hour, on site	$50 ÷ 1.0 man-hr	$50/hr
Per paid man-hour	$50 ÷ 1.33 man-hr	$37.50/hr

Same job. The owner who says “I’m getting a hundred an hour” and the owner who says “I’m getting thirty-seven fifty” are describing the identical stop.

Note where drive time goes. Ten minutes of windshield time with one person is ten man-minutes. With two people in the truck it’s twenty — the second person doubles it, and it’s completely invisible on the invoice.

$37.50 per paid man-hour is the number that decides whether you have a business. Everything below runs off it.

Why that rate can’t support either model

Build the stack. Assumptions stated so you can substitute your own — these are illustrative, not survey data:

• Target field wage: $20/hour
• Payroll burden — FICA, unemployment, and workers’ comp, which is expensive in landscaping: +22%, so the loaded cost of that wage is $24.40
• Equipment, fuel, maintenance, truck payments, plus insurance, admin, software, and marketing: call it $13 per man-hour combined

The important thing about that last line is that it’s roughly fixed. A mower, a truck payment, and a general liability policy don’t get cheaper because you charged more for the lawn.

Revenue per paid man-hour	Loaded wage	Equipment + overhead	Left for owner + profit
$37.50	$24.40	$13.00	$0.10
$50.00	$24.40	$13.00	$12.60
$65.00	$24.40	$13.00	$27.60
$80.00	$24.40	$13.00	$42.60

At $37.50 you are working for free. Not “thin margins” — the owner’s line is a rounding error, before anyone takes a salary or replaces a mower.

Now notice what isn’t in that table: the comp model. Not one row changes based on whether you pay hourly or by percentage. The shortfall is identical either way. All the comp plan does is choose who absorbs it:

• Hourly at $20/hr: the crew gets their $20, and the owner’s take goes to zero.
• P4P at 33%: the crew pool is $16.50 per 1.33 man-hours, so each person earns $12.38/hour — at or below minimum wage in many states — and the owner keeps more.

Same job, same shortfall, different victim. That’s why the original commenter’s crew made more on hourly. Nothing was wrong with their effort. Hourly was simply the version of the plan where someone else covered the gap.

The crew-size trap that makes P4P look worse than it is

There’s a second effect worth understanding, because it’s why the problem showed up specifically on a two-man crew.

A second person doesn’t halve the time on a small residential lot. One mows, one trims and blows, and the trimmer often finishes early and waits. A property that takes one person 45 minutes typically takes two about 30 — a 1.5× speed-up for 2× the labor.

	Solo	Two-person crew
On-site time	45 min	30 min
On-site man-hours	0.75	1.00
Drive man-hours (10 min)	0.17	0.33
Total paid man-hours	0.92	1.33
Revenue per paid man-hour	$54.35	$37.50
Each person earns at 33%	$18.00/hr	$12.38/hr

Same price, same percentage — and the two-person crew burns 45% more man-hours while each person earns 31% less.

The crew isn’t underperforming. They’re absorbing the cost of a routing decision the owner made. On tight residential work, a solo operator is frequently the more profitable configuration; two-person crews earn their keep on larger properties where the second person genuinely adds close to full output.

What your rate actually has to be

Two formulas do all the work here.

To find the rate you need:

Required revenue per paid man-hour = Target wage ÷ Crew percentage

At $20/hour and 33%, you need $60.60 per paid man-hour. That $50 stop is producing $37.50. It isn’t 20% short — it’s 38% short.

To find what the job should bill:

Price = (Target wage × Total paid man-hours) ÷ Crew percentage

For that stop: ($20 × 1.33) ÷ 0.33 = $80.80, not $50.

If that number makes you wince, that reaction is the actual finding. It’s not an argument for a different percentage — it’s the size of the gap between what the work costs and what you’ve been charging for it.

There are only two levers, and neither is “tell them to move faster”:

Raise the price. Uncomfortable, and unavoidable. Sort your route by revenue per man-hour and look at the bottom ten — there’s almost always a cluster of legacy customers priced years ago and never revisited.

Cut the man-hours. Route density is the cheapest win available. Drop drive time from 10 minutes to 4 and that stop falls to 1.13 paid man-hours, worth about $2/hour to each crew member without renegotiating a single customer.

So which model should you use?

Once your rate clears the bar, the choice is genuinely situational.

Pay hourly when:

• Crew members are new, or can’t yet influence the pace of the day
• The work is variable — installs, cleanups, storm work — where time is hard to predict
• Your route is thin or unpredictable, so finishing early doesn’t create more billable work
• You’re on the truck yourself and setting the pace
• You can’t reliably measure per-job time yet

Pay by percentage when:

• The work is recurring and repeatable, and you know your job times
• Your route is dense enough to backfill saved time
• Your prices already reflect the true cost of each job
• The crew leader actually controls sequence and pace
• You have a quality standard and a callback policy, because speed incentives cut both ways

The honest default for most small operations: hourly until your pricing and route density are solid, then percentage. P4P is a multiplier on a system that already works. It is not a fix for one that doesn’t.

How to pay crew members either way

Split the pool 55/45 or 60/40 between crew leader and helper. The leader carries quality, the customer relationship, the equipment, and the call on route order — that’s worth a premium.

Only put someone on a percentage if they can influence the outcome. A first-week helper doesn’t choose the route, set the price, or decide the crew size. Putting them on P4P transfers your business risk to the person with the least control over it, and they’ll leave. Start people hourly and move them onto a percentage once they can genuinely affect the day.

Guarantee an hourly floor underneath any percentage. Crews get whichever is higher. Rain weeks and breakdowns aren’t their fault, and a plan that punishes them for it costs you the good people first — the ones with somewhere else to go.

The legal floor is not optional

In the US, paying by percentage or piece rate does not exempt you from wage and hour law. The FLSA still requires at least minimum wage for all hours worked — including drive time, loading, and shop time — and overtime at 1.5× the regular rate, calculated from total earnings divided by total hours. Some states go further; California, for example, has specific piece-rate rules requiring separate compensation for rest breaks and other non-productive time.

That $12.38/hour figure isn’t only a retention problem. Depending on where you operate, it may be a compliance problem.

This isn’t legal advice — talk to someone who knows your state before rolling out any comp plan.

What to do this week

1. Calculate your real revenue per paid man-hour. Weekly revenue ÷ total field man-hours, drive and shop time included. Not the number you hope for — the one your timesheets say.
2. Compare it to target wage ÷ percentage. Below that line, you have a pricing problem, and no comp plan will paper over it.
3. Measure drive time honestly for one week. Operators are consistently surprised, and it’s often the cheapest 10% you’ll ever recover.
4. Reprice the bottom ten jobs on your route before touching anyone’s pay structure.
5. Put a floor under any percentage plan before you have a retention problem instead of after.

Where the rate problem actually starts

Routes end up 38% short for a boring reason: prices get quoted from memory, in a driveway, under time pressure, and then never revisited. One customer got $50 in 2021 and still pays $50 — not because anyone decided that, but because nobody decided anything.

The fix is a rate card that ties price to something measurable — property size, service, frequency — so every quote reflects what the job actually costs to serve. That’s the discipline this whole article is really about, and it’s what Sorvius is built to enforce: customers answer a few questions about their property and the price comes from your rates instead of your gut, the same way every time.

Fix the rate and the P4P-versus-hourly argument gets a lot less interesting. Leave it broken, and all you’re choosing is who pays for it.