Free tool
Labor burden calculator
A $30 hour is not a $30 hour. Pick your state and trade and this loads the real unemployment wage base and a workers’ comp class to start from, then shows what the hour costs once the hours you cannot bill are paid for too.
Burden rate
28.05%
on top of base wages
Cost per paid hour
$38.41
what payroll costs
Cost per billable hour
$43.42
what a bid must recover — 1,840 billable hours
Where the money goes, per employee per year
| Base wages | $62,400.00 | 2,080 paid hours |
| Social Security (6.2%) | $3,868.80 | capped at the annual wage base |
| Medicare (1.45%) | $904.80 | no cap |
| FUTA | $42.00 | 0.6% on the first $7,000 |
| SUTA — Texas | $243.00 | 2.7% on the first $9,000 |
| Workers' compensation | $5,241.60 | $8.40 per $100 of payroll |
| Health & benefits | $5,400.00 | $450/month |
| Truck, tools, phone | $1,800.00 | $150/month |
| Total burden | $17,500.20 | 28.05% of wages |
| Fully burdened cost | $79,900.20 | wages + burden |
SUTA rates and wage bases are the 2026 new employer figures for construction where the state publishes one — your own rate notice will differ, often a lot, so type yours in. Workers’ comp rates are indicative mid-range figures by trade; use your declarations page and your experience modifier. Nothing here is sent anywhere.
Why the state matters more than the percentage
Unemployment tax is charged on a wage base, not on the whole wage. Texas stops at $9,000 of each employee’s pay; Washington charges into the seventies of thousands. On a $62,400 wage that is the difference between a few hundred dollars a year and several thousand — per person. Any burden calculator that asks for one flat percentage is hiding that from you.
Workers’ compensation moves further still. The comp classes here span from about $0.35 per $100 of payroll for office work to over $26 for roofing. Your own experience modifier then multiplies it. The trade preset gets you within range; your declarations page gets you right.
Once you know the burdened hour, put it to work: the estimate builder applies burden per line, and the markup calculator works out what has to sit on top of it.
Frequently asked questions
How do you calculate labor burden?
Add every employer cost that rides on a wage — Social Security and Medicare, FUTA, your state's unemployment tax, workers' compensation, health benefits, and the truck, phone and small tools that come with the person — then divide by base wages. A $30/hour employee typically costs $40-46 an hour before a single dollar of overhead or profit. The calculator on this page does it with your state's actual wage base rather than a flat percentage.
What is a typical labor burden rate in construction?
Most contractors land between 30% and 50% of base wages, and the spread is driven by two things: workers' compensation class, and where the work is done. Roofing carries several times the comp rate of interior trim; a state with a $7,000 unemployment wage base costs a fraction of one with a $50,000 base. That is why a national average percentage is close to useless for bidding.
Why is cost per billable hour higher than cost per paid hour?
Because you pay for hours you cannot bill. Two weeks of vacation, six holidays, shop time, yard loading, travel between jobs and rework are all paid — so the whole year's cost has to be recovered from the hours that reach a customer. At 2,080 paid hours with 240 non-billable, every billable hour carries 13% more cost than the payroll number suggests. Bidding off the paid-hour figure is a quiet, permanent loss.
Should labor burden go in the estimate or in overhead?
In the estimate, on the labor line. Burden is a direct cost of the specific hours a job consumes, so it scales with the work; overhead does not. Contractors who push burden into overhead end up marking up a cost they have not counted, and their markup silently absorbs a 30-50% expense it was never sized for.
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