How the Labor Burden Calculator works
Burden is everything you pay for an hour of labor beyond the wage itself. The calculator converts each component to a dollar figure per hour, adds them to the base wage, and reports the total as a rate, a multiplier, and a percentage. All annualized costs are spread across 2,080 hours, the standard full-time year.
Three components scale directly with the wage: FICA at 7.65%, workers comp at your class-code rate, and retirement match at your contribution percentage. Each is simply the base wage multiplied by its rate. Health insurance is a flat monthly premium, so it becomes (monthly × 12) ÷ 2,080 regardless of wage.
Two components behave differently. Unemployment insurance is capped: FUTA and SUTA apply only to the first $7,000 of annual wages, so the tool takes the lesser of annual wages or $7,000, applies your rate, and divides by 2,080. PTO is the wage you pay for hours not worked — days × 8 × base wage, spread across the same 2,080 hours.
Worked example: a $28 base wage with the default inputs carries $2.14 of FICA, $4.20 of workers comp, $0.20 of unemployment, $3.46 of health insurance, $0.84 of retirement, and $1.08 of PTO. The burdened rate is $39.92 an hour — a 1.43× multiplier, or 42.6% burden — which annualizes to about $83,000 for one full-time employee earning $58,240 in wages.
The burdened rate is a cost figure. Overhead and profit go on top of it, not inside it.
Frequently Asked Questions
What is a typical labor burden percentage in construction?
Most contractors land between 30% and 50% on top of base wage, with the spread driven almost entirely by workers comp class code and whether the company pays health premiums. The default inputs here — 7.65% FICA, 15% workers comp, employer-paid health at $600 a month, 3% retirement, and 10 PTO days — produce a 42.6% burden on a $28 wage.
Why is unemployment insurance such a small number per hour?
FUTA and SUTA apply only to the first $7,000 of each employee's annual wages, not to every hour worked. The calculator caps the taxable base at $7,000, so a 6% rate produces $420 a year, which spread across 2,080 hours is about 20 cents an hour. That is why unemployment barely moves the burdened rate for a full-time worker while it matters much more for short-term seasonal crews.
How does PTO get into an hourly rate?
Paid time off is hours you pay for but do not bill. The tool multiplies your PTO days by 8 hours and by the base wage, then spreads that annual cost across all 2,080 paid hours. At $28 an hour, 10 PTO days is $2,240 a year, or $1.08 on every hour worked.
Should I bill at the burdened rate?
No — the burdened rate is your cost, not your price. It covers wages, payroll taxes, insurance, and benefits, but not overhead (trucks, office, supervision, software) or profit. Take the burdened rate from this tool as your true cost input, then apply overhead and margin on top with the markup and margin calculator.