Labor Burden Rate Calculator

Your tech's wage is only part of what they cost. The fully loaded cost adds the employer's payroll taxes, workers' comp, general liability, and benefits on top of the base wage. Dividing that loaded annual cost by paid hours gives the burdened cost rate — what an hour of that tech truly costs you.

annualWage      = wagePerHr × paidHoursPerYear        (default 2,080)
payrollTaxes    = annualWage × (FICA% + FUTA% + SUTA%)
workersComp     = annualWage × (WC$ / 100)            (rate per $100 payroll)
genLiability    = annualWage × (GL$ / 1,000)          (rate per $1,000 payroll)
benefitsAnnual  = (health + retirement + other) × 12
loadedAnnual    = annualWage + taxes + WC + GL + benefits

burden %         = (loadedAnnual − annualWage) / annualWage
burdenedCostRate = loadedAnnual / paidHoursPerYear

billableHours        = paidHoursPerYear − nonBillableHours
costPerBillableHour  = loadedAnnual / billableHours

The number most calculators miss. Dividing the loaded cost by all 2,080 paid hours understates the real cost of an invoiced hour, because PTO, holidays, training, and drive/idle time are paid but never billed. Enter your non-billable hours and the tool also shows the cost per billable hour — the gap (e.g. $33 vs $43) that silently eats margin when you bid off the lower number.

Why FUTA defaults to 0.6%. FUTA is 6.0% of the first $7,000 of wages, but employers who pay state unemployment on time get a 5.4% credit, leaving an effective 0.6%. We default to 0.6% so the tool doesn't overstate your burden.

Workers' comp is entered as dollars per $100 of payroll and general liability as dollars per $1,000 — the conventions your carrier quotes — so you can paste their rate unchanged. These, plus SUTA, are state/trade/experience-rated; treat the defaults as editable placeholders, not quotes. This tool does not run payroll or store employee records.

Labor burden is the term for everything this page adds on top of a wage, and whether the worker is on payroll at all is the question behind 1099 versus W2 for service businesses, since a subcontractor carries none of these lines and a different set of risks instead.

Once the loaded hourly cost is settled it feeds two decisions. The rate you actually charge per hour is built from that cost, and the test of whether another seat pays for itself works out the billable hours and jobs a week that seat has to sell before it pays for itself. The share of paid hours that reaches an invoice is measured separately.

Sources: Connecteam labor-burden formula + tax defaults; HiBob fully-burdened labor components; busybusy per-$100 workers'-comp / per-$1,000 general-liability convention.