Labor Burden Calculator
An employee costs more than their wage. Enter the wage and the extras to see the true cost per paid hour, per productive hour and your labor burden percentage.
How the labor burden calculator works
Labor burden is everything you pay for an employee on top of their wage: employer payroll taxes, unemployment insurance, workers comp, benefits and paid time off. This labor burden calculator turns those costs into a true hourly cost you can use in bids.
The 7.65% default is the employer share of Social Security and Medicare. Unemployment and workers comp rates vary a lot by state and trade, so replace those examples with your own rates from your payroll or insurance.
Pricing from the wage alone is how contractors end up working for free. Use the productive-hour cost, then add overhead and profit.
The formulas
Frequently asked questions
What is labor burden?
It is the extra cost of an employee beyond the wage: payroll taxes, insurance, benefits and paid time off.
What is a typical labor burden percentage?
It varies by trade, state and benefits. Enter your own rates to get yours.
Why use productive hours?
Paid time off is paid but not billable, so the cost must be spread over the hours that can be sold.
Does this apply to subcontractors?
Usually not. Subcontractors are paid an agreed price and cover their own taxes and insurance.
Want job costing with real labor costs?
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Estimates only. Results depend on the numbers you enter and are not financial, tax or legal advice.