Labor Burden Calculator
Add payroll taxes, workers’ comp, insurance and benefits to a wage and get the fully burdened hourly rate — and the rate per hour actually worked.
The working
Rate = Wage + Wage × (taxes + comp + insurance + other) + Annual costs ÷ Paid hours
Fully burdened rate
Waiting on you
Enter the base hourly wage. Nothing here assumes what anyone is paid, or what an employer’s taxes and insurance cost.
A wage is not what an hour costs. Payroll taxes, workers’ compensation, insurance and benefits all sit on top of it, and the hours you pay for are not all hours that produce work. Enter the wage and the costs you actually carry. The calculator returns the burdened rate per paid hour, the burden as a percentage of the wage, and — if you say how many paid hours produce no work — the rate per productive hour that a job should be priced from.
How this calculator works
Only your inputs and exact unit conversions. Where a figure comes from anywhere else, it is recorded below with its source.
- Formula version
- 1.0.0
- Last reviewed
- 2026-09-29
- External data
- None
- Category
- Cost
What this calculates
The cost to you of one hour of one employee: the wage plus everything you pay because you employ them. Percentage costs — payroll taxes, workers’ compensation, insurance that scales with payroll — are applied to the wage. Dollar costs that arrive as a yearly amount — benefits, tools, training — are divided by the hours you pay for, so they become an hourly figure.
The formula
Percentage costs = wage × (taxes + comp + insurance + other) ÷ 100.
Annual costs per hour = annual dollar costs ÷ paid hours per year.
Fully burdened rate = wage + percentage costs + annual costs per hour.
Burden % = (burdened rate − wage) ÷ wage. It is measured against the wage, not against the burdened rate, which is the convention most published definitions use and the one a payroll comparison needs.
Paid hours and productive hours
You pay for holidays, vacation, sick days and training, and none of those hours can be billed. If an employee is paid for 2,080 hours and 160 of them produce no work, the annual cost has to be recovered from 1,920 hours, not 2,080. Enter the hours paid but not worked and the calculator returns a second rate — the rate per productive hour — which is the figure a job should be priced from. Leave the field blank to see the rate per paid hour only.
What is deliberately not here
A typical burden percentage, or a default for any tax, premium or benefit. Payroll tax rates are set by statute and by the state and the employer’s own account; workers’ compensation differs sharply by classification and by an employer’s claims history; benefits are a choice. A single figure would be wrong for most readers, and this platform does not publish numbers it cannot source. Your percentages come from your payroll records and your policy declarations.
One employee, made-up numbers
Every figure below is invented to show the arithmetic. None of them is typical of anything — yours come from your own payroll records.
- Base wage
- $30.00 / hr
- Payroll taxes + comp + insurance
- 10% + 8% + 2%
- Benefits
- $6,240 / year
- Paid hours / not worked
- 2,080 / 160
- 01Percentage costs= $30.00 × 20%= $6.00 / hr
- 02Benefits per hour= $6,240 ÷ 2,080= $3.00 / hr
- 03Fully burdened rate= $30.00 + $6.00 + $3.00= $39.00 / paid hr
- 04Burden= ($39.00 − $30.00) ÷ $30.00= 30%
- 05Annual cost= $39.00 × 2,080= $81,120
- 06Rate per productive hour= $81,120 ÷ (2,080 − 160)= $42.25 / hr
$42.25 per productive hour, not $30
What it assumes
- 01Percentage costs are percentages of the base wage.
- 02Annual dollar costs are per employee, and are spread evenly over the paid hours entered.
- 03Overtime premiums are not modelled; enter the wage that applies to the hours in question.
What it does not do
- It does not know any tax rate, premium or benefit cost. It cannot tell you what yours should be.
- It models one employee at a time. A crew average is only as good as the wage and hours you enter for it.
- It does not apply wage caps that some payroll taxes have. If a cost stops accruing above a threshold, enter the effective percentage for the employee in question.
- It is an arithmetic tool, not payroll or accounting advice.
Common questions.
- What is labor burden?
- Everything an employer pays because someone is employed, on top of their wage: payroll taxes, workers’ compensation, insurance, benefits and similar costs. The burden is usually expressed as a percentage of the wage.
- How do I calculate labor burden?
- Add up the costs you carry per employee, express the ones that scale with payroll as a percentage of wages, turn the yearly dollar amounts into an hourly figure by dividing by paid hours, and add them all to the wage. The burden percentage is the extra, divided by the wage. The calculator does each step and shows the working.
- What is a fully burdened labor rate?
- The wage plus every employer cost of having the employee, stated per hour. It is the rate a job should be costed at, because it is what an hour of that person actually costs you.
- What is a typical labor burden percentage?
- It depends on the trade, the state, the workers’ compensation classification, the benefits offered and the employer’s own claims history, so any single figure would be wrong for most people. This calculator does not suggest one. Enter the percentages from your own payroll records and policy.
- Why is the rate per productive hour higher?
- Because you pay for hours that produce no billable work — holidays, vacation, sick days, training. The full annual cost still has to be recovered, but from fewer hours, so each productive hour has to carry more.
Behind the numbers
The methods and definitions this calculator applies, explained in full and with their sources.
Where people go next
Ordered by what usually comes next in the same job, not by keyword.