What labor burden means
Labor burden is the full hourly cost of putting one person to work, not just the wage you pay them. It includes payroll taxes, workers comp, benefits, and the reality that not every paid hour is billable.
Contractor pricing
Labor Burden Calculator
Estimate the true cost of labor beyond hourly pay.
Enter your labor assumptions
Enter wage and burden assumptions to calculate the adjusted hourly labor cost and the true labor cost after non-billable time.
Outputs
- Payroll tax cost
- $3.15
- Workers' comp cost
- $1.40
- Benefits cost
- $4.20
- Adjusted labor cost
- $43.75
- True labor cost
- $54.69
At 20.0% non-billable time, your effective labor cost is 56.3% higher than wage.
Education
Why hourly wage is not true labor cost
A $25 hourly wage does not mean labor costs $25 per hour on the job. Once insurance, taxes, benefits, supervision gaps, callbacks, travel, and other non-billable time are accounted for, the real labor cost is usually much higher.
Why contractors underprice labor
Many contractors build pricing around take-home pay or a rough hourly number. That leaves out the hidden costs attached to every crew hour, which makes estimates look competitive while quietly shrinking margin.
Related resources
roofing estimate templateOpen the related StackQuotes resource.True Labor Cost GuideOpen the related StackQuotes resource.Hourly Rate CalculatorOpen the related StackQuotes resource.Job Costing GuideOpen the related StackQuotes resource.Markup vs Margin CalculatorOpen the related StackQuotes resource.
If your labor numbers are wrong, every estimate is at risk.
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