Labor Burden Calculator

The numbers behind your pricing

Labor burden is the gap between what an employee costs on paper and what they actually cost to employ. The wage is the headline number; the burden is everything behind it — employer payroll taxes, workers' compensation, benefits, paid time off, vehicle and tool use, training, and the cost of non-productive hours. A contractor who prices labor at the wage rate is silently losing the burden on every hour, and over a year that gap is the difference between a profitable crew and a crew that drains the business.

This calculator captures the major burden components. Employer payroll taxes run roughly 7–10% on top of wages. Workers' comp is the wildcard — it's priced by classification code, so a roofer or framer can carry 15–25% comp while an office role carries under 1%. Benefits (health insurance, retirement, PTO) add another layer, and indirect costs like vehicle use and tools add more. Add them all and a $25/hour employee routinely costs $38–$45/hour fully burdened.

The productive-hours input reveals the sharpest edge: the cost per hour the employee actually generates revenue. If a 2,080-hour work year includes 300 hours of breaks, cleanup, downtime, and non-billable tasks, the employee only produces 1,780 billable hours — and the full burden must be recovered across those fewer hours. That pushes the true cost per productive hour even higher than the simple burdened rate.

Use this number in every estimate. If your fully burdened labor cost is $42/hour and you bill labor at $40, you're paying the customer $2/hour for the privilege of the work. The fix is to quote at the burdened rate plus overhead plus profit — and to know your comp class code, because it's the single biggest lever in the burden calculation for high-risk trades.