Contractor Labor Burden Calculator

Calculate a loaded labor cost per productive hour from wage, payroll burden, workers comp, benefits and nonproductive paid time, then estimate a billable rate for a target gross margin.

Quick answer

Contractor Labor Burden Calculator

The wage is not the labor cost. Nonproductive paid time can materially increase the cost of each productive hour even before profit margin.

Formula: Loaded cost per productive hour = total weekly labor cost ÷ productive hours. Billable rate = loaded hourly cost ÷ (1 − target margin).

Base wage ($/hour)Employee base hourly wage.Payroll taxes / statutory burden (%)Employer payroll burden as your own percentage.Workers comp / labor insurance (%)Percentage applied to base payroll for this model.Benefits / allowances ($ per paid hour)Health, PTO allowance, vehicle or other hourlyized benefit cost.Paid hours per weekTotal paid hours.Productive / billable hours per weekHours that can actually carry job revenue.Target gross margin (%)Used to calculate an illustrative billable labor rate.

Enter your numbers and calculate.

How the calculation works

Loaded cost per productive hour = total weekly labor cost ÷ productive hours. Billable rate = loaded hourly cost ÷ (1 − target margin).

Every rate, percentage, cost and value assumption shown in the calculator can be changed. Results are scenario math based on your inputs, not quotes, appraisals, code determinations or predictions.

Questions people ask

Why divide by productive hours?

Because paid but non-billable time still has to be recovered by the hours that produce job revenue.

Is margin the same as markup?

No. The rate formula divides cost by one minus the target margin.

Does this calculate payroll taxes for me?

No. Enter the burden percentage appropriate for your own estimate.