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Labor Cost Calculator

Estimate the full labor cost of a job, shift or project. Enter the crew size, regular and overtime hours and the base wage, add the labor burden for payroll taxes, workers' comp and benefits, and see the total, the cost per labor hour and the price to charge with a markup.

Last updated:

Crew and hours
$

Average wage across the crew.

h
h
$

Optional: per diem, travel, safety gear, training for this job.

Labor burden (% of wages)
%

US: 7.65% Social Security + Medicare, plus unemployment taxes.

%

Varies widely by trade: under 1% for office work, much higher for roofing.

%

Health insurance, retirement match, paid time off.

%

Liability insurance, training, uniforms.

Pricing (optional)
%

Add a markup to get the price to charge a client.

Enter your values to see the result.
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How to use the Labor Cost Calculator

  1. Enter the crew: number of workers and their average base hourly wage.
  2. Enter hours per worker: regular hours and overtime hours, and pick the overtime multiplier.
  3. Set the labor burden as percentages of wages: payroll taxes, workers' comp, benefits and other costs.
  4. Add a markup if you want the price to charge a client.
  5. Read the total labor cost and the cost per labor hour, then check the overtime table.

Labor cost formula

  • Regular wages = workers × regular hours × wage
  • Overtime wages = workers × overtime hours × wage × overtime multiplier
  • Burden = (regular + overtime wages) × (payroll tax % + workers' comp % + benefits % + other %)
  • Total labor cost = wages + burden + flat job costs
  • Cost per labor hour = total labor cost ÷ (workers × total hours)
  • Price with markup = total labor cost × (1 + markup %)

Example: 4 workers × 40 h × $24 = $3,840 regular, plus 4 × 6 h × $24 × 1.5 = $864 overtime, gives $4,704 of wages. A 26.5% burden adds $1,246.56, so the job's labor costs $5,950.56, or $32.34 per labor hour for 184 hours, about 1.35 times the base wage.

Typical burden components (US)

ComponentTypical rangeNotes
Social Security + Medicare (employer share)7.65%Social Security part stops above the yearly wage base
Federal unemployment (FUTA)0.6% on first $7,000After the usual state credit
State unemployment (SUTA)About 0.5% to 6%+Set by state and employer history, on a capped wage base
Workers' compensationUnder 1% to over 20%Depends heavily on job class and state
Health insurance and benefitsOften 5% to 30%Varies with plans offered and wage level
Paid time offAbout 4% to 10%2 to 5 weeks of paid leave a year

Ranges are broad rules of thumb for estimating. Use your payroll provider's figures and insurance quotes for real bids.

Estimating tips

  • Overtime is costly twice: the 1.5× premium and the burden on top of it. Adding a worker can be cheaper than long overtime.
  • Include non-productive time such as travel between sites, setup and cleanup in the hours.
  • For a client price, labor markup must also cover overhead and profit, not just burden.

Frequently asked questions

How do I calculate labor cost for a job?

Labor cost = (regular hours × wage + overtime hours × wage × overtime multiplier) × number of workers × (1 + burden %). For 4 workers at $24 with 40 regular and 6 overtime hours each and a 26.5% burden, wages are $4,704 and the total is about $5,951.

What is labor burden?

Labor burden is the cost an employer pays on top of wages: the employer share of payroll taxes, unemployment insurance, workers' compensation, health insurance, retirement contributions, paid time off and similar costs. It is usually expressed as a percentage of wages.

What is a typical labor burden percentage?

It varies by industry, benefits and state. Many US employers see roughly 20% to 40% on top of wages; trades with high workers' comp rates or generous benefits can be higher. Use your own payroll and insurance numbers when you have them.

What are US employer payroll taxes?

Employers pay 6.2% Social Security (up to the yearly wage base) and 1.45% Medicare, 7.65% in total, plus federal unemployment tax (FUTA, 0.6% on the first $7,000 of wages after the usual state credit) and state unemployment tax at a rate set by each state.

How is overtime calculated?

Under the US Fair Labor Standards Act, non-exempt employees earn at least 1.5 times their regular rate for hours over 40 in a workweek. Some states and contracts also require daily overtime or double time. Burden percentages usually apply to overtime pay too.

What is a fully burdened labor rate?

It is the true cost of one hour of labor: wage plus all burden costs, divided by hours worked. In this calculator the cost per labor hour includes overtime, burden and any flat job costs, so you can compare it directly with what you bill.

Are all the tools on FreeToolCabin tested for quality and accuracy?

Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.

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