Labor burden calculator
The wage on the pay stub is not what the hour costs you. Taxes, insurance, benefits, the truck, and every paid hour nobody can invoice all sit on top of it.
Run your numbers
A full time employee is normally 2080.
Social Security and Medicare together are 7.65 percent.
Varies by trade and state. Roofing and tree work run far higher than office work.
Federal and state combined. Your state rate moves with your claim history.
Health, retirement, and anything else you pay on their behalf.
What you carry for this person whether or not they bill an hour.
Holidays, vacation, and sick time. Paid, but nothing is produced.
Shop time, meetings, loading, and driving you cannot put on an invoice.
- Cost per billable hour
- $40.88
- Burden rate
- 33.7%
- Fully burdened hourly
- $33.41
- Billable hours a year
- 1700
- Base wages
- $52,000
- Payroll taxes
- $5,382
- Workers comp
- $3,120
- Benefits
- $5,400
- Truck, phone, and tools
- $3,600
- Total burden
- $17,502
- True annual cost
- $69,502
Every billable hour has to carry $15.88 more than the wage on the pay stub. Price off the top number, not the wage.
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What is labor burden and how do you calculate it?
Labor burden is every employment cost above the base wage: the employer share of payroll tax, workers compensation, unemployment tax, benefits, and the truck, phone, and tools you carry for that person. Add a year of those, divide by the base wages, and that percentage is your burden rate. Trade guides commonly put it between thirty and sixty percent of the wage. The number that should set your price goes one step further and divides the true annual cost by the hours you can actually bill, because paid time off and shop time are paid but never invoiced.
Questions about labor burden
What is a normal burden rate?
Trade guides commonly describe thirty to sixty percent of the base wage, and the spread is mostly workers compensation and benefits. A trade with a high comp rate and employer paid health coverage sits near the top of that range, and a small crew with no benefits sits near the bottom.
Why divide by billable hours instead of all paid hours?
Because you cannot invoice a holiday, a safety meeting, or an hour spent loading the truck. Spreading the true cost over paid hours understates what each invoiced hour has to carry. The gap between those two numbers is why crews that look profitable on paper are not.
Does the truck belong in labor burden?
If you carry it for one person whether or not they bill an hour, putting it here gives you the honest cost of putting that person on a job. Some companies keep vehicles in overhead instead. Either is defensible as long as you do it once and stay consistent.
What workers compensation rate should I use?
Use the rate on your own policy, because it varies by trade and by state. Roofing, tree work, and anything at height cost far more than office or light service work, and your experience rating moves it further.
The burden is only as good as the hours behind it
Pinstripe Fleet tracks crew time against the job, separates travel from work, and puts the hours on the invoice, so the unbillable time shows up in a report instead of a guess.
Pinstripe Fleet Management is built and supported by Pinstripe Business Services.