Free calculator
Labor Burden Calculator
Enter a wage and your own rates to get what an employee really costs: payroll taxes, workers’ comp, liability and benefits, per paid hour and per billable hour. Set a margin to get the rate to bill.
- 2026 payroll taxes
- Cost per billable hour
- Billing rate at your margin
- No email required
Employee
2,080 is full time: 40 hours × 52 weeks, with paid holidays and time off included.
Paid hours not billed to a job (per year)
Paid time nobody bills for: holidays, time off, training and safety meetings, and time in the shop, the yard or driving between jobs. The hours you do bill carry the cost of these.
Your rates
Saved in this browser, so you only type them once. They are not put in shared links.
Payroll taxes
- Social Security
- 6.2% of wages up to $184,500 (2026)
- Medicare
- 1.45% of all wages
FUTA is 0.6% of the first $7,000 after the full credit for state tax. Enter a higher rate if your state is a credit reduction state. Your state sends your unemployment rate each year, and the wage base it applies to.
Insurance
Use the workers’ comp rate for this employee’s class code times your experience mod. Leave liability blank if your policy is rated on sales instead of payroll.
Benefits
Other is anything else you pay per employee each year, like uniforms, safety gear or a tool allowance.
Not tax advice. Rates and wage bases change every year, and your accountant, payroll provider and insurance agent have the exact numbers for your company.
Burden per year
- Social Security
- Medicare
- Federal unemployment (FUTA)
- State unemployment (SUTA)
- Workers’ comp
- General liability
- Health insurance
- Retirement match
- Other
- Total burden
Your estimate
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Nothing here yet. Run the numbers above and press “Add to estimate”.
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Start free trialHow it’s calculated
Wages and hours. Annual wages = base wage × paid hours. 2,080 hours is 40 a week for 52 weeks, with paid holidays and time off inside it. Billable hours = paid hours − holidays − time off − training − shop and drive time.
Social Security. 6.2% of wages up to the 2026 wage base of $184,500, from the Social Security Administration and IRS Publication 15 (2026). The wage base goes up most years.
Medicare. 1.45% of all wages, with no wage base. The 0.9% Additional Medicare Tax on wages over $200,000 is withheld from the employee only. The employer pays no share of it.
Federal unemployment (FUTA). 6.0% of the first $7,000 of each employee’s wages, less a credit of up to 5.4% for state unemployment tax paid on time, for a net 0.6%, or $42.00 per employee (IRS Topic 759 and Publication 15). States that owe the federal unemployment fund are credit reduction states, and employers there get a smaller credit: for 2025, California employers paid a net 1.8%. Enter your net rate if that applies to you.
State unemployment (SUTA). Your rate × wages up to your state’s wage base. Both are set by your state, and the rate depends on your history, so there is no default.
Workers’ comp. Wages ÷ 100 × your rate per $100 of payroll. The rate depends on the employee’s class code and your state, and your experience mod multiplies it. General liability, when your policy is rated on payroll, is wages ÷ 1,000 × your rate per $1,000. Both are applied to all wages, because the payroll rules most states use count holiday, vacation and sick pay as payroll.
Benefits. Health insurance is your monthly share × 12. Retirement match is your percentage × wages, assuming the employee puts in enough to get the full match. Other is the yearly amount you enter.
Burden and hourly cost. Labor burden = the items above added up, and burden % = burden ÷ wages. Cost per paid hour = (wages + burden) ÷ paid hours. Cost per billable hour = (wages + burden) ÷ billable hours. Each tax and item is rounded to the cent, and so are the hourly figures.
Billing rate. Cost per billable hour ÷ (1 − margin). The markup that gives the same price is margin ÷ (1 − margin), so a 25% margin is a 33.3% markup. The markup vs margin calculator converts any pair, and the markup vs margin guide explains why the two are never the same number.
Add to estimate. One labor line: the hours you enter × your billing rate or your burdened cost per billable hour. Nothing is priced with numbers you did not enter.
This is a pricing tool, not tax advice. Pricing the whole job? The construction estimate template puts labor next to material, equipment and subs with overhead and margin on top, and how to bid a construction job walks through it step by step.
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More free tools and price data: Markup vs Margin Calculator · Pay Application Builder
Frequently asked questions
What is labor burden?
Labor burden is what an employee costs you on top of the wage: your share of payroll taxes, workers’ comp, liability insurance rated on payroll, and benefits. It is usually written as a percentage of wages. The federal part is fixed by law. For 2026 that is 6.2% Social Security on the first $184,500 of wages, 1.45% Medicare on all wages, and FUTA of 0.6% on the first $7,000, which tops out at $42.00 per employee in most states. For a full-time employee at $30.00 an hour, that comes to $4,815.60 a year, 7.72% of wages. State unemployment, workers’ comp and benefits depend on your state, your trade and your company.
What is the labor burden on a $30 an hour employee?
$30.00 an hour for 2,080 paid hours is $62,400.00 a year. Federal payroll taxes add $4,815.60. With example rates for the rest, not typical ones (state unemployment of 3% on the first $10,000, workers’ comp at $8.00 per $100 of payroll, liability at $10.00 per $1,000, $600 a month toward health insurance and a 3% retirement match), the burden is $19,803.60 a year, 31.7% of wages. The employee costs $82,203.60 a year, or $39.52 per paid hour. Your own rates will move this a lot, so enter them in the calculator.
How do I calculate a billable hourly rate?
Take the year’s wages plus burden and divide by the hours you can actually bill, not the hours you pay. That is the fully burdened cost per billable hour. Then divide by 1 minus your margin. In the example, $44.87 an hour at a 25% margin is $59.83 an hour: $44.87 ÷ 0.75. Multiplying by 1.25 instead gives $56.09, which is a 25% markup and only a 20% margin. Office, trucks and other overhead are not labor burden, so cover them in your overhead and margin.
Why do billable hours matter more than paid hours?
Because the hours you bill have to pay for the hours you don’t. In the example, 248 of the 2,080 paid hours go to holidays, time off, training, and shop and drive time, which leaves 1,832 to bill. The employee costs $39.52 per paid hour but $44.87 per billable hour. Price jobs off the paid-hour cost and you lose $5.35 on every hour you bill.
What is included in labor burden?
Your share of Social Security and Medicare, federal and state unemployment tax, workers’ comp (priced per $100 of payroll by class code), general liability when your policy is rated on payroll (per $1,000 of payroll), and benefits: health insurance, retirement match, and anything else you pay per employee each year, like uniforms, safety gear or a tool allowance. What the employee pays is not burden: income tax withholding, their half of Social Security and Medicare, and the 0.9% Additional Medicare Tax all come out of the wage.
Are my wages and rates sent to BuildWorkPro?
The calculator sends nothing: the math runs in your browser, and the wage, your rates and your estimate are saved in this browser’s local storage, never on our servers. The hours are kept in the page address so you can bookmark a result; like any page address, it is recorded by our site analytics if you accept analytics cookies. The wage is left out of the address and only goes into a link you choose to copy.