Free calculators · Labor cost
Labor burden calculator
Stop pricing labor at the wage. Enter pay, hours, taxes, workers’ comp and benefits to see the true hourly cost of an employee and the rate to bill.
True hourly cost
- Cost per productive hour
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- Cost per paid hour
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- Suggested bill rate
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- Labor burden
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- Annual wages
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- Annual burden
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- Total annual cost
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- Productive hours
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Check your real rates with your payroll provider, insurance agent and CPA.
Runs in your browser. Nothing you type is sent or saved. Not tax, legal or accounting advice.
How the math works
Taxes = SS% × min(Wages, SS base) + Medicare% × Wages + FUTA% × min(Wages, $7,000) + SUTA% × min(Wages, state base)
Workers' comp = Wages ÷ 100 × WC rate
GL = Wages × GL%
Burden = Taxes + WC + GL + Benefits + Other
Burden % = Burden ÷ Wages
Cost per paid hour = (Wages + Burden) ÷ Paid hours
Productive hours = Paid hours − PTO − Non-productive hours
Cost per productive hour = (Wages + Burden) ÷ Productive hours
Bill rate = Cost per productive hour ÷ (1 − Margin)
Example with the default numbers: $25/hr × 2,080 hours = $52,000 wages. Taxes are $4,209 (Social Security $3,224, Medicare $754, FUTA $42, Florida unemployment $189). workers' comp $4,160, GL $1,040, benefits $6,000 and other $1,200 bring the burden to $16,609, or 31.94% of wages. That is $32.99 per paid hour and $36.49 per productive hour (1,880 hours). At a 25% margin, bill $48.66 an hour.
Excel + Google Sheets version
Run it for your whole company.
The True Hourly Cost Calculator runs this for your whole roster (up to 30 people), builds crew-hour rates with equipment, and prints an internal rate card.
Instant digital download. Works in Excel 2016 or later and in Google Sheets. No macros.
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Frequently asked questions
What is labor burden?
Labor burden is everything an employee costs beyond the wage: payroll taxes, workers’ comp, insurance, benefits and other costs. It is usually shown as a percent of wages.
What is a typical labor burden rate for contractors?
Many crews land between 25% and 50% of wages once taxes, workers’ comp, benefits and insurance are included. Workers’ comp class codes and benefits move it the most, so run your own numbers.
Why use productive hours instead of paid hours?
You pay for vacation, holidays, shop time and rain days, but you can only bill the hours spent on jobs. Spreading the full cost over productive hours shows what each billable hour really costs.
How is the bill rate calculated?
The cost per productive hour is divided by one minus your target margin. At a 25% margin, a $36.49 cost becomes a $48.66 bill rate, and 25% of that rate is profit.
Are the tax rates current?
The defaults are 2026 federal figures (Social Security 6.2% up to $184,500, Medicare 1.45%, FUTA 0.6% on the first $7,000) and the Florida new employer reemployment rate of 2.7% on $7,000. Change any value to match your company.
More free calculators
- Markup vs margin calculator: Convert markup to margin and back, or price a job at the margin you want.
- Contractor overhead calculator: Overhead recovery rate and a bid price that covers overhead and profit.