Free tool

Labor Burden Calculator

Find out what an hour of field labor actually costs you once payroll taxes, workers' comp, and benefits are added in, and how much of each hour you bill is left over before overhead.

Your inputs

Use totals from your actual payroll for field employees only, over the last six or twelve months. Example numbers are filled in.

Field payroll
$
$
$
$
$
Hours
Your rate
$

Your results

Based on the payroll and hours you entered.

Total loaded labor cost
Burden as a % of wages
Loaded cost per paid hour
Share of paid hours that land on jobs
Loaded cost per job hour
This is the number your labor rate has to cover before overhead and profit.
Left per hour before overhead
As a % of your rate

How labor burden works

Labor burden is everything a field employee costs you on top of their wage, including employer payroll taxes, workers' comp, health insurance, and retirement contributions. Added together, those costs commonly run 30 to 50 percent of wages for Florida trades, where workers' comp rates are among the highest in the country, so a $30 an hour technician can easily cost $40 or more for every hour on the payroll.

The calculator divides that full cost by the hours actually logged to jobs instead of the hours paid. Shop time, drive time between jobs, training, holidays, and slow days all get paid, but nobody bills for them, so the jobs you do bill have to carry those hours too. That's why the loaded cost per job hour is almost always well above the loaded cost per paid hour.

  • Use field employees only. Office, sales, and owner pay belong in overhead.
  • Pull actual totals from payroll rather than estimates, ideally six to twelve months so slow and busy stretches even out.
  • Prevailing wage work deserves its own calculation, since required fringe benefits put those hours in a different cost bracket.
  • Recalculate at least once a year, or whenever wages, insurance, or workers' comp rates change.

What's left per hour still has to cover overhead and profit. Our post on how to calculate an HVAC labor rate walks through adding overhead and profit to reach a rate that works, and the Job Costing Setup Kit includes this calculator along with a bid pricing calculator you can keep in your own files.

This calculator is for estimating only and isn't tax, legal, or payroll advice. Results depend on the information you enter.

Want your books to show this every month?

Prophet Accounting keeps the books for home service and construction contractors with burdened labor in job cost, so labor percentage and job margins are visible every month.

See how we work with contractors Call (772) 380-2871