ProfitBidBurdened Labor Cost Calculator
Your employee's wage is not your labor cost. The burdened cost — wage plus employer taxes, workers comp, insurance, benefits, spread over only the hours you can bill — is commonly 25-50% higher. Price with the wage and you subsidize every job.
How burdened labor is calculated
Step 1: Load the wage with percentage burdens (payroll taxes, workers comp, insurance). Step 2: Add per-hour benefit and equipment costs. Step 3: Divide by billable efficiency — if you pay 40 hours but can only bill 32, every billable hour must carry the other 8. That third step is the one most estimates skip, and it is worth 25% on its own in this example.
Rates vary by state and trade class code; use your actual workers comp rate from your policy, not the defaults here.
Frequently asked questions
What is a typical labor burden for construction?
Total burden commonly lands 25-50% above base wage once payroll taxes, workers comp, insurance, benefits and non-billable time are included. Roofing and framing comp rates push it higher; finish trades are usually lower.
Should I use burdened cost in every estimate?
Yes. Labor lines in an estimate should be hours multiplied by the burdened hourly cost, then marked up for overhead and profit. Using the raw wage prices the job below cost before you start.