Labor Burden Calculator
The wage you pay is never what the labor costs. Payroll taxes, workers' comp, benefits, and paid time off pile on top of every hour — and if you price off the bare wage, every job quietly loses that difference. Enter the numbers below to see the fully loaded cost per hour, and the multiplier the trade calculators apply for you.
The employee
The wage is the sticker price; the burden is the real cost
When you hire someone at $25 an hour, $25 is the number you both agree on — but it's nowhere near what that hour costs your business. On top of the wage you pay the employer half of Social Security and Medicare, federal and state unemployment tax, a workers' compensation premium priced on your trade's risk, and whatever benefits you offer. Then there's the quiet one: paid time off. You pay for holidays, vacation, and sick days, but no work comes out of them — so every one of those paid-not-worked hours has to be recovered across the hours that are worked, which pushes the real cost of each productive hour up further.
Add it all and divide by the hours actually available for work, and a $25 wage commonly lands between $33 and $40 of true cost. Expressed as a multiplier that's roughly 1.3 to 1.6 times the wage. That multiplier is why every pricing calculator on this site loads wages before it prices a job — quoting off the bare $25 would bury the taxes, comp, benefits, and PTO inside a margin you thought was profit.
Your own multiplier depends heavily on two inputs: workers' comp, which can run from a few percent for low-risk work to well over 20% for roofing and tree work, and benefits, which swing from nothing to five figures a year. Change those two and watch the multiplier move. The 1.4× the site uses as a default is a reasonable mid-trade average — this page is where you replace it with yours.
Two worked examples
HVAC technician at $25/hour. Base year: $25 × 2,080 = $52,000. Payroll taxes at 10% add $5,200; workers' comp at 10% adds $5,200; benefits run $6,000. Total annual cost: $68,400. With 15 days (120 hours) of paid time off, productive hours are 1,960. $68,400 ÷ 1,960 = $34.90 per hour — a 1.40× multiplier, or 40% on top of the wage. That's the classic loaded rate, and exactly the figure the trade calculators assume by default.
House cleaner at $18/hour. Base year: $18 × 2,080 = $37,440. Payroll taxes at 10% add $3,744; workers' comp is lower here at 4%, adding $1,498; benefits are a leaner $2,400. Total: $45,082. With 10 days (80 hours) PTO, productive hours are 2,000. $45,082 ÷ 2,000 = $22.54 per hour — a 1.25× multiplier. Lower comp and lighter benefits mean a smaller burden, which is why a flat 1.4× would overstate this job. Run your own numbers rather than assuming.
Four ways burden gets missed
Pricing off the bare wage. The costly default. If your quotes are built on $25 when the labor costs $35, you're giving away $10 an hour on every job and calling the shortfall a slow month.
Ignoring paid time off. PTO feels like a benefit line, but its real effect is to shrink the productive hours your fixed annual cost is spread across — which raises the cost of every hour worked. Leave it out and the loaded rate comes in too low.
Using one comp rate for every trade. Workers' comp is priced on risk. Borrowing a plumber's rate for a roofing crew — or the reverse — can throw the multiplier off by ten points or more. Use your actual class rate.
Confusing burden with utilization. Burden is what an hour of labor costs. It doesn't account for the hours you can't bill because of driving, quoting, or downtime — that's a separate question. Handle it with the hourly rate calculator, then price with both in view.
Frequently Asked Questions
What is labor burden?
Everything an employee costs beyond their base wage: employer payroll taxes, workers' comp, benefits, and paid time off. A $25 wage often costs $33–$40 all in.
How do I calculate the labor burden rate?
Add base wage plus payroll taxes, comp, and benefits for the annual cost, then divide by productive hours (paid hours minus PTO). Divide that by the wage for the multiplier.
Why do the pricing calculators multiply wages by about 1.4?
Because the bare wage isn't the cost. Roughly 1.4× is a mid-trade rule of thumb folding in taxes, comp, benefits, and PTO. This page shows where it comes from and computes yours.
Does labor burden include unbilled and idle time?
No. Burden is the cost of employing someone. Non-billable driving, quoting, and downtime are a utilization question — see the hourly rate calculator.
Is this calculator really free?
Yes. No account, no email, no ads. It runs in your browser and the numbers you enter are never sent to us. We use basic traffic analytics, described in our privacy policy.
Estimates only: results are based on the numbers you enter. We work to keep the formulas accurate, but costs, taxes, and regulations vary by location — always verify your own numbers before making business decisions. MyPricingCalculator.com is not responsible for pricing or business decisions made with these tools.