Labor Cost Calculator
Turn an hourly wage into a fully burdened cost per hour by adding payroll taxes, workers' comp, benefits, and overhead, then see a suggested billable rate.
Labor Cost Calculator
Enter an hourly wage and your employer cost loads. The calculator shows the fully burdened hourly cost, the annual loaded cost, the labor burden percentage, and a suggested billable rate at your chosen markup.
Hourly Wage
Base wage paid to the worker, before any employer loads.
Annual Hours Worked
Pick a preset or enter a custom number. Productive (billable) hours give a more accurate rate.
Employer FICA
6.2 percent Social Security plus 1.45 percent Medicare. Statutory total is 7.65 percent.
FUTA + SUTA
Combined unemployment tax. FUTA effective rate is 0.6 percent. SUTA varies by state and experience rating.
Workers' Comp Rate
Premium per $100 of payroll. Industry-dependent: office is below 1 percent, construction can exceed 10 percent.
Annual Benefits
Health, dental, retirement match, and paid leave per worker per year.
Annual Overhead
Per-worker share of equipment, software, training, and facilities.
Billable Markup
Markup applied to burdened cost to suggest a client billable rate.
Estimates only. Gross employer cost before income tax withholding and worker take-home math.
Pricing & Period Costs
Track every payable hour with Timeclock44 so your burdened rate stays anchored in real time worked.
Price Jobs With Real Labor Numbers
Stop guessing at payroll loads. Timeclock44 keeps a clean record of every hour worked so your burdened cost and billable rate are based on real data.
What Labor Cost Really Includes
The sticker wage on a paycheck is only part of what an employer pays to keep a worker on the team. The full number, the burdened cost, covers five buckets: base wages, employer payroll taxes (FICA, FUTA, SUTA), workers' comp premiums, benefits (health, dental, retirement, paid leave), and a share of overhead like equipment, software, and facilities.
A worker at $25 per hour rarely costs $25 per hour. Once you add the 7.65 percent FICA share, a few points for unemployment, workers' comp, and a typical benefits package, the loaded number lands closer to $32 to $38 per hour. The exact mix depends on industry, state, and how rich the benefits plan is.
How to Calculate Burdened Hourly Cost (Step by Step)
Start with annual wages: hourly wage times annual hours worked. At $25 per hour and 2,080 hours, that is $52,000. Next, add employer payroll taxes. FICA is a flat 7.65 percent (6.2 percent Social Security plus 1.45 percent Medicare). FUTA is typically 0.6 percent effective on the first $7,000 per worker after the state credit. SUTA varies by state, usually 1 percent to 6 percent on a state-specific wage base.
Then add workers' comp. Premiums are set per $100 of payroll by class code, so an office role might run under 1 percent while construction can exceed 10 percent. Add annual benefits and the per-worker share of overhead. Divide the total by annual hours and you have the burdened hourly cost.
The annual hours number matters. 2,080 (40 times 52) is the simple ceiling. 1,920 to 2,000 reflects typical holidays and PTO. If you bill only for productive time, use a lower number (1,800 or even less) so the hourly figure is not understated.
Typical Labor Burden Rates by Industry
Most U.S. employers fall between 18 percent and 40 percent burden on top of base wages, depending on industry and how rich the benefits are. Use these as starting points, not hard rules.
- Office and knowledge work: 18 percent to 22 percent. Workers' comp is low, but benefits and PTO can push it higher.
- Manufacturing and retail: 22 percent to 28 percent. Higher workers' comp and SUTA, moderate benefits.
- Construction and field work: 28 percent to 40 percent or more. Workers' comp can be a large slice on its own.
- Healthcare: 25 percent to 35 percent. Rich benefits plans plus regulatory load.
The Bureau of Labor Statistics Employer Costs for Employee Compensation (ECEC) release publishes benchmark data on benefits as a percent of total compensation. Use it to sanity check your inputs against the broader market.
Turning Burdened Cost Into a Billable Rate
Burdened cost is what you spend. Billable rate is what you charge. The gap between them covers everything the burden buckets do not: utilization (you cannot bill 100 percent of paid hours), sales and admin overhead beyond direct allocation, profit margin, and the cushion you need for slow weeks.
Service businesses commonly mark up burdened cost 25 percent to 100 percent. A 35 percent markup is a reasonable floor for steady, well-utilized work. Specialty trades and consultancies with low utilization or stiff competition often run 75 percent or higher. Use the markup field to test scenarios, then compare against the rates competitors quote.
Round out the picture with the billable hours calculator, the annual work hours calculator, the overtime calculator, the regular rate of pay calculator, and the payroll time converter.
Estimates only, not tax, legal, or accounting advice. FICA, FUTA/SUTA, workers' comp, and benefits costs vary by state, industry, and employer. Verify rates with the IRS, your state unemployment agency, and your insurance carrier before pricing work or filing taxes.
Frequently Asked Questions
Common questions about labor cost calculator
What is a fully loaded or burdened labor cost?
It is the total cost an employer pays per hour to keep one worker employed: base wage plus employer payroll taxes (FICA, FUTA, SUTA), workers' comp, benefits, and a share of overhead. Sticker wage alone usually understates the real number by 20 percent to 40 percent.
What is the difference between hourly wage and labor cost?
Hourly wage is what shows up on the paycheck. Labor cost adds everything the employer pays on top: the 7.65 percent employer FICA share, FUTA and SUTA unemployment, workers' comp premiums, health and retirement benefits, paid leave, and a share of overhead.
What is a typical labor burden rate?
Most U.S. employers land between 1.18x and 1.40x base wages. Office and knowledge work tend to run 18 percent to 22 percent. Manufacturing and retail come in at 22 percent to 28 percent. Construction and field work often hit 28 percent to 40 percent or higher.
How do I calculate the employer's share of payroll taxes?
Employer FICA is a flat 7.65 percent (6.2 percent Social Security plus 1.45 percent Medicare). FUTA is typically 0.6 percent effective on the first $7,000 per employee after the 5.4 percent state credit. SUTA varies by state and experience rating, usually 1 percent to 6 percent on a state-specific wage base.
Should I use 2,080 hours or fewer for annual hours?
Use 2,080 (40 x 52) if you want the simple ceiling. Use 1,920 to 2,000 for a more realistic figure after typical holidays and PTO. If you bill clients only for productive time, use the lower number so your hourly cost is not understated.
How is this different from a paycheck calculator?
A paycheck calculator estimates the worker's gross-to-net pay. This calculator estimates the employer's total cost, a different number used for pricing jobs, building budgets, and quoting bids.
What markup should I use for a billable rate?
Service businesses commonly mark up burdened cost 25 percent to 100 percent to cover sales, admin, downtime, and profit. The right number depends on your industry, utilization, and competitive pricing. Use the markup field to test scenarios.
Does this include overtime?
No. This tool computes straight-time fully loaded cost. For overtime math, use the Overtime Calculator or the Regular Rate of Pay Calculator.