Labor Cost Calculator

Your details

The employee's base hourly wage before any taxes or benefits.
/hr
Average paid hours per week, including any regular overtime.
hrs
Vacation days, sick days, and holidays where the employee is paid but not working.
days
In the US, employers pay 7.65% FICA (6.2% Social Security + 1.45% Medicare). Add state taxes as applicable.
%
Workers' comp premiums as a percentage of gross wages. Varies widely by industry and state.
%
Federal and state unemployment tax as a percentage of gross wages. Varies by state experience rating.
%
Annual employer contribution toward health, dental, and vision premiums.
Employer retirement contribution as a percentage of gross wages (e.g. 3% match).
%
Any other annual benefit costs: life insurance, disability, tuition, transport, meals, etc.
Allocated share of rent, utilities, equipment, software, and admin overhead attributable to this employee.
If you are billing this employee's time to clients, enter the profit margin you want to add on top of total costs.
%
Enter your total annual revenue to see labor cost as a percentage of revenue. Leave as 0 to skip.
Currency
Total annual labor costTypical burden
$70,038.00

Gross wages plus all taxes, benefits, and overhead - the true fully-loaded cost

Annual gross wages$52,000.00
Hourly labor cost$35.02
Labor burden rate0.3%
Billable hourly rate$41.20
Labor cost % of revenue0.3%
Net hours worked per year2,000
Total annual burden costs$18,038.00
Base wages$52,000.00
Total burden$18,038.00
Fully-loaded cost$70,038.00

This employee costs $70,038.00/year fully loaded - vs $52,000.00 in base wages.

  • For every $1 in base wages, you spend an extra $0.35 on taxes, benefits, and overhead (34.7% burden rate).
  • The true hourly cost of this employee is 1.40x their base pay rate - a common rule of thumb is 1.25x to 1.4x, so your result puts you above the typical range.
  • Labor cost is 28.0% of annual revenue, which is within the typical 20-35% range for most industries.
  • To cover all costs and hit your target profit margin, bill this employee's time at $41.20/hr or more.

Next stepTo reduce fully-loaded labor cost, review your benefits package, negotiate workers' compensation rates, and track overtime carefully - overtime hours are the fastest way for burden to climb.

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