Trade Contractor Cost Tool
Contractor Labor Burden Calculator
An employee who earns $32/hour actually costs your business significantly more. Use this calculator to audit payroll taxes, workers' compensation rates, and benefits to discover your true cost per productive billable hour.
1. Base Wage & Hours
Default: 2,080 (40 hrs × 52 weeks)
2. Mandatory Employer Payroll Taxes & Insurance
Federal rate is 7.65%
Varies by state & rating
Class code specific
3. Benefits & Non-Productive Time
80 hrs = 10 standard days
Total perks & safety allowance
Burden Analysis Summary
Gross Base Wage:$66,560 /yr
FICA (Employer):$5,092
SUTA & FUTA:$2,372
Workers' Comp:$5,658
Paid Leave & Perks:$6,160
Calculated Labor Burden Rate
+29.0%
On top of base hourly wages.
True Cost Per Billable Hour
$42.92 /hr
Accounts for non-billable paid time off.
What is Labor Burden and Why Does It Break Trade Bids?
Labor burden is the actual cost of having an employee on your payroll beyond their raw hourly rate. When a plumbing, electrical, framing, or HVAC subcontractor calculates a project estimate using only base wages (e.g. $30/hr), they are absorbing 25% to 40% of hidden payroll costs straight out of their profit margin.
The primary elements that comprise a contractor's labor burden include:
- Employer FICA: 6.2% Social Security + 1.45% Medicare.
- FUTA & SUTA: Federal and State unemployment insurance taxes.
- Workers’ Compensation: Heavily elevated in construction trades depending on risk classifications (roofing and steel erection carry much higher rates than painting or trim carpentry).
- Non-Productive Paid Hours: Holidays, sick days, weather cancellations, and training time that generate zero billable job revenue.