Labor burden calculator: the real cost of an employee hour
Labor burden is everything an employee costs beyond the wage: payroll taxes, workers' comp, benefits and paid time off. The loaded rate is what one worked hour really costs you, and it is the number to price from. Enter your own rates below.
On this page
Loaded cost per worked hour$36.91
- Burden on top of the wage
- 31.8%
- Taxes and comp per hour
- $4.76
- Benefits per hour
- $2.02
- Yearly cost of this employee
- $72,341
Runs in your browser. Nothing you type is sent or saved. The result is an estimate from your own inputs, not a quote. Rates are examples. Use the rates from your payroll provider and insurance carrier. Not tax advice.
How labor burden is calculated
- Taxes and comp per hour = wage x (payroll tax rate + workers' comp rate).
- Benefits per hour = monthly benefits x 12 / paid hours per year.
- Loaded cost per worked hour = (wage + taxes and comp + benefits) x paid hours / worked hours, where worked hours leave out paid days off.
The loaded rate still leaves out the truck, tools, phone, training and unbilled time. Those belong in overhead, which the flat rate pricing calculator covers.
Where the numbers come from
| Input | Where to find it |
|---|---|
| Payroll taxes | Payroll provider reports: employer share of federal and state payroll taxes |
| Workers' comp | Your policy, by class code; roofing rates run far higher than office rates |
| Benefits | Monthly premium and retirement match the company pays |
| Paid days off | Your handbook: vacation, holidays, sick days |
Use it in every estimate
Estimating labor at the wage instead of the loaded rate is the most common way a busy shop loses money. Alvin can keep the loaded rates in your price sheet current from QuickBooks payroll reports for you to review, so estimates stop drifting. See how to price landscaping jobs for a crew-hour example.
Frequently asked questions
What is a typical labor burden for contractors?
It varies a lot with workers' comp class, state and benefits. Calculate your own from payroll and insurance records and do not rely on a rule of thumb.
Is labor burden the same as overhead?
No. Burden is tied to each employee: taxes, insurance, benefits, paid time off. Overhead is the cost of running the company: office, trucks, software, marketing, owner's salary.
Do I include paid time off in labor burden?
Yes. You pay for those hours and bill nothing for them, so they raise the cost of every hour the employee does work.
The math is the easy part. Alvin does the office work after it.
Alvin is the personal assistant for home services businesses. Your team asks in the app or forwards an email, and Alvin does the work across QuickBooks, your CRM and your suppliers. Anything that spends money or goes to a customer waits for your approval.