Labor burden calculator
Labor burden is what an employee costs beyond the wage: payroll taxes, workers' comp, benefits and paid time off. Add a year of those costs to the wages and divide by the hours the employee actually works. In the example below, a $30.00 an hour employee costs $40.12 per hour worked, 33.7% on top of the wage. Type your own wage, rates and benefits. Free, no account.
The employee
Type one employee's pay and your costs for them. The wage, time off and comp rate start as examples. Type your own. Hours off are paid vacation, holidays and sick days.
Per year
Paid, per year
Payroll taxes
FICA is set by federal law: 6.2% Social Security on wages up to $184,500 in 2026, plus 1.45% Medicare. The calculator applies both.
On the first $7,000
Unemployment
Wages taxed
FUTA is 0.6% after the full credit for state tax, and more in a credit reduction state. The state rate starts at California's 2026 new-employer rate on its $7,000 base. Use the rate on your state notice.
Insurance and benefits
Per $100 of pay
Per year
Per year
The comp rate is an example. Use your policy's rate for the employee's class code. Benefits are health insurance and anything else you pay for; they start at the BLS construction average for insurance, $3.90 per hour worked, over 2,000 hours. Other is gear, phones and training.
Price per labor hour
- Wages: 2,080 hours × $30.00
- $62,400.00
- Social Security, 6.2%
- $3,868.80
- Medicare, 1.45%
- $904.80
- FUTA, 0.6% up to $7,000
- $42.00
- State unemployment, 3.4% up to $7,000
- $238.00
- Workers' comp, $8.00 per $100
- $4,992.00
- Benefits
- $7,800.00
- Cost a year
- $80,245.60
- ÷ 2,000 hours worked
- $40.12
- ÷ (1 − 35% margin)
- $61.73
Paid time off is in the cost and out of the hours, so it raises the hourly cost. Check that margin in the markup calculator
Worked out in your browser from the numbers you type. Nothing is looked up or saved. The wage, time off and comp rate start as examples; the tax rates come from the IRS and California EDD. Confirm every number on site.
How to calculate labor burden
Work it out for a year, then bring it back to one hour worked.
- Multiply the wage by the hours you pay in a year, paid time off included.
- Add your share of payroll taxes: Social Security, Medicare, FUTA and state unemployment.
- Add workers' comp at your policy's rate per $100 of payroll, then health insurance, other benefits and anything else you pay per employee.
- Divide the total by the hours the employee works: hours paid less vacation, holidays and sick days.
- Subtract the wage and divide by the wage for the burden percent.
ExampleOne employee at $30.00 an hour
- Wages: 2,080 hours × $30.00
- $62,400.00
- FICA: 7.65% of wages
- $4,773.60
- FUTA: 0.6% of the first $7,000
- $42.00
- State unemployment: 3.4% of the first $7,000
- $238.00
- Workers' comp: $8.00 per $100 (example rate)
- $4,992.00
- Health and other insurance
- $7,800.00
- Cost a year
- $80,245.60
- ÷ 2,000 hours worked (80 paid hours off)
- $40.12/hr
- Burden on top of the wage
- 33.7%
The wage, the 80 hours off and the comp rate are examples. The state rate is California's 2026 new-employer rate, and insurance is the BLS construction average of $3.90 per hour worked.
Employer payroll tax rates for 2026
What you pay on top of each employee's wages, from the IRS and one state agency. Checked October 2026.
| Tax | Employer rate | Wages it applies to | Source |
|---|---|---|---|
| Social Security | 6.2% | Up to $184,500 a year (2026) | IRS Topic 751 |
| Medicare | 1.45% | All wages, no limit | IRS Topic 751 |
| FUTA | 0.6% after the credit (6% before) | First $7,000 per employee. The credit for paying state tax is up to 5.4%. | IRS Topic 759 |
| FUTA in a credit reduction state | 0.9% at a 0.3% reduction | The credit drops 0.3% for each year a state hasn't repaid its federal loan | IRS |
| State unemployment, California | 3.4% for new employers, then 1.5% to 6.2% | First $7,000 per employee | California EDD |
| Employment Training Tax, California | 0.1% | First $7,000 per employee | California EDD |
| Workers' comp | Per $100 of payroll | Set by class code and state, and listed on your policy | Your carrier |
Every state sets its own unemployment rate and wage base, and most give new employers a set rate for the first years. California is shown as one example. Use the rate on your state notice, and add California's training tax to the state rate if you pay it.
What construction employers pay on top of wages
The Bureau of Labor Statistics surveys what employers spend per hour worked. In June 2026, benefits came to 30.5% of construction employers' compensation costs, or 43.8% on top of wages.
Cost per hour worked, private industry, June 2026
| Cost | Construction | All private |
|---|---|---|
| Wages and salaries | $36.13 | $32.82 |
| Paid leave | $2.63 | $3.54 |
| Supplemental pay | $2.49 | $1.88 |
| Insurance | $3.90 | $3.69 |
| Retirement and savings | $2.39 | $1.57 |
| Legally required benefits | $4.42 | $3.40 |
| Total compensation | $51.96 | $46.89 |
| Benefits ÷ wages | 43.8% | 42.9% |
Source: BLS, Employer Costs for Employee Compensation, table 4. Benefits ÷ wages is worked from the table.
What each line covers
- Paid leave is vacation, holiday, sick and personal leave (BLS).
- Supplemental pay is overtime and premium pay, shift differentials and bonuses.
- Insurance is life, health and disability insurance.
- Legally required benefits are Social Security, Medicare, federal and state unemployment insurance and workers' comp.
- These are averages across employers, including ones that offer no plan. A small crew without retirement or bonuses will land lower; a high comp class code can land higher.
From cost per hour to a price per hour
The burdened hourly cost is what a labor hour costs you. To sell it, divide by one minus your target margin, the same way you price materials.
Per-foot and per-square rates start from the same number. The gutter pricing guide divides a crew's loaded hourly cost by the feet it hangs in an hour, then adds overhead and margin. The markup calculator turns that margin into a markup and checks it on a whole job.
ExampleThis employee's hour, sold and per foot
- Cost per hour worked
- $40.12
- ÷ (1 − 35% margin)
- $61.73/hr
- Gutter labor: 2 installers × $40.12 ÷ 30 ft/hr
- $2.67/ft
The crew size and feet per hour are the gutter pricing guide's example inputs. Time your own crew.
Use loaded labor cost in your rates
Each pricing guide asks for your crew's loaded hourly cost. This is where that number comes from.
FAQ
What is labor burden?
Labor burden is what an employee costs you beyond the hourly wage: your share of payroll taxes, workers' comp, health insurance and other benefits, and the paid time off they don't work. Spread over the hours they actually work, it turns the wage into the hourly cost your prices have to cover.
How do you calculate labor burden?
Add a year of wages, your share of FICA, FUTA and state unemployment, workers' comp, benefits and other costs. Divide that total by the hours the employee works, leaving out paid time off. Subtract the wage and divide by the wage to get the burden percent.
What are the employer payroll tax rates?
The IRS sets the employer's FICA at 6.2% for Social Security, on wages up to $184,500 in 2026, plus 1.45% for Medicare with no wage limit. That is 7.65% on most crew wages. FUTA is 6% of the first $7,000 of each employee's wages, or 0.6% after the full credit for state unemployment tax. Each state sets its own unemployment rate and wage base.
What is a typical labor burden in construction?
The Bureau of Labor Statistics put construction employers' cost at $51.96 per hour worked in June 2026: $36.13 in wages and $15.84 in benefits. Benefits were 30.5% of total pay, or 43.8% on top of wages. That average includes paid leave, bonuses, insurance, retirement and legally required benefits. Your number depends on your state, your comp codes and what you offer.
Does labor burden include workers' comp?
Yes. Workers' comp is priced per $100 of payroll, with a rate for each class code, and the rates vary by state. Use the rate on your policy. At $8 per $100, $62,400 of wages costs $4,992 a year.
How do I turn burdened labor cost into a price per hour?
Divide the burdened hourly cost by one minus your target margin. At $40.12 an hour and a 35% margin, the labor hour sells for $61.73. The markup calculator converts that margin to a markup.
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