Labor burden calculator

A $32 an hour carpenter does not cost $32 an hour. Add payroll taxes, workers' comp, insurance, benefits and the hours you pay for but can't bill, and see the rate your estimates and change orders should carry.

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Inputs

Wage & hours

Base wage

$/hr

Paid hours per year

hrs

40 hrs × 52 weeks = 2,080, including paid time off.

Paid time off

hrs

Holidays, vacation, sick.

Other unbillable

hrs

Training, weather, shop time.

Payroll taxes (employer share)

Social Security

cap $

Medicare

no wage capFUTA

cap $

SUTA

cap $

FUTA 0.6% assumes the full state credit; credit-reduction states pay more. SUTA rate and wage base are set by your state and your claims history. Set a wage base to 0 for no cap.

Insurance

Workers' comp rate

$per $100 payroll

Your class code's manual rate × experience mod, from your policy. Roofing and steel run far higher than clerical.

General liability

% of payroll

If your GL is rated on revenue instead, convert it or leave it in overhead.

Benefits

Health & benefits

$/hr

Union fringe

$/hr

Per paid hour. Union fringes (pension, H&W, training) come from your CBA; open shop leave it at 0.

ResultsLive

Burdened cost per productive hour: $0
Labor burden: 0%; on top of base wage
Annual cost per worker: $0

Where each billable hour goes

Sample inputs are illustrative only. Tax wage bases, SUTA rates and workers' comp rates vary by state, year, class code and your experience mod. Use your own payroll and insurance numbers.

Method

How this is calculated

Labor burden is everything you pay for an hour of labor beyond the base wage, expressed per hour the worker is actually productive on a job.

Annual wages       = wage × paid hours
Productive hours   = paid hours − PTO − other unbillable hours
Social Security    = min(wages, SS wage base) × SS rate
Medicare           = wages × Medicare rate
FUTA / SUTA        = min(wages, wage base) × rate
Workers' comp      = wages ÷ 100 × rate per $100
General liability  = wages × GL %
Benefits, fringe   = $/hr × paid hours

Annual cost        = wages + taxes + insurance + benefits + fringe
Burdened rate      = annual cost ÷ productive hours
Burden %           = burdened rate ÷ wage − 1

Why productive hours matter

You pay for 2,080 hours but only bill the hours on a job. PTO, weather days, safety training and shop time are real wages that have to be recovered through the hours you do bill. Spreading cost over productive hours puts that cost in the rate.

What this leaves out

Overtime premium. Workers' comp is usually charged on straight-time payroll; overtime adds taxes and fringe but is easiest to price separately.
Small tools, vehicles, phones, PPE. Many contractors carry these in the labor rate; others recover them as job cost or overhead.
Prevailing wage. On public work the wage and fringe are set by the wage determination; enter those.
Additional Medicare tax. The extra 0.9% above $200,000 is employee-only, so it's not an employer cost.

The defaults are illustrative, not current rates for your state or trade. Pull real numbers from your payroll provider, your workers' comp policy (class code rates and experience mod) and your state unemployment notice.

Stop re-keying the numbers behind this math.

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