Labor Burden Calculator: the true hourly cost of an employee

A tech's real cost is their wage plus employer taxes (FICA 7.65%, FUTA, SUTA), workers' comp, and benefits — spread over only the hours they actually produce. For a typical trades employee that's a 1.35–1.70× multiplier on the base wage. Bid with the burdened number, not the paycheck number.

Base hourly wage$/hrPaid hours per weekhrsWeeks paid per yearwksPTO days per yeardaysPaid holidaysdaysHealth insurance (employer share)$/moOther benefits$/moRetirement match, phone, uniforms, tool allowance.Workers' comp rateper $100 payrollFrom your policy. Trades commonly run $4–$15 per $100.State unemployment (SUTA) rate%Your assigned rate; new employers often ~2.7%.SUTA wage base$Varies by state ($7,000–$56,700 in 2026).

True cost per productive hour

$37.89/hr

Annual gross wages: $58,240
FICA (7.65% employer share): $4,455
FUTA (0.6% of first $7,000): $42
SUTA (2.7% of first $9,500): $257
Workers' comp ($7.50/100): $4,368
Benefits: $6,600
Fully burdened annual cost: $73,962
Productive hours (minus PTO + holidays): 1,952 hrs
Burden multiplier: 1.35× base wage

A $28.00/hr tech actually costs you $37.89/hr of billable time. If you're bidding labor at the base wage plus a token markup, every job is quietly underpriced by the difference.

How this calculator works — the formula

burden = FICA (7.65%) + FUTA (0.6% of first $7,000) + SUTA + workers’ comp + benefits

productive hours = paid hours − (PTO + holidays)

burdened rate = (gross wages + burden) ÷ productive hours

Employer FICA is 6.2% Social Security + 1.45% Medicare on wages. FUTA is 6.0% on the first $7,000 but nets to 0.6% with the full state credit. SUTA rates and wage bases are set per state and per employer — use the numbers from your state notice. Workers’ comp is billed per $100 of payroll and varies hugely by class code (roofing can exceed $25/$100; office staff under $1).

Questions contractors actually ask

What is a typical labor burden percentage for construction?

Most trades shops land between 35% and 70% on top of base wages once payroll taxes, workers' comp, and benefits are counted — before accounting for unproductive time. High-comp trades like roofing run higher.

Why divide by productive hours instead of paid hours?

Because you bill jobs against hours worked on jobs. Two weeks of PTO plus six holidays removes ~128 hours a year that you still pay for — spreading total cost over the remaining hours is what makes the rate honest.

Does labor burden include overhead?

No. Burden is the cost of employing the person. Truck, insurance, office, and marketing are company overhead, recovered separately — run the overhead recovery calculator next and stack the two.

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