Free Labor Burden Calculator

An employee's pay rate and what you actually pay for that employee are not the same. It seems simple, but many construction businesses lose money because they do not correctly calculate the real cost of maintaining an employee. Calculating labor burden can be tricky. Most small businesses consult an accountant to identify their fully-burdened labor rate. But they still don't understand how the additional costs impact their business. The key is to locate the hidden costs that organizations overlook.


This labor-burden calculator is designed to estimate how much you pay an employee over and above their hourly wage. Inaccurate data can lead to bad information and decisions. We encourage you to use this estimator to help visualize your labor burden but recommend you review the information with your accountant.

Instructions

Step 1: Enter the hourly labor rate at the top in the per hour labor cost field.
Step 2: Next, find your General Liability and Worker's Compensation Declaration Pages.
Step 3: Locate two similar classes of labor you want to see costs on.
(For example, carpentry code for Liability might be 91343, and 5403 for your Worker's Comp. When you find those on insurance policy, to the right you will find the rate per $1,000 for Liability, and the rate per $100 for Worker's Comp.)
Step 4: Enter those two numbers in the GL Rate and WC Rate of the calculator. The cost will be displayed for one hour of labor.
Step 5: Repeat as many times as needed to see the cost of one hour of labor for each labor classification your employees perform.
**We've put in some very standard rates for FICA, FUTA, and SUTA for display purposes. Your state may or may not have FUTA, or SUTA, but for this calculation we want to highlight the overburben cost for insurance for one hour of labor.

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Starting Wage $ /hr
Fixed Costs
FICA: 7.65%
FUTA: 6.0%
SUTA1: 3.0%
Insurance
General Liability Insurance Rate2: $ /$1000
Worker's Compensation Rate3: $ /$100
Total Hourly Cost
Total Hourly Burden

1 3.0% used as a mid-range estimate, actual SUTA rates are affected by your unemployment claims in each state.

2 General Liability rates are typically calculated on a per $1,000 of payroll. And actual rates vary based on claims history, location, and many other underwriting factors. Xx was used as an example of what would be normal. Rate calculated by dividing 10.15 by 1,000. 10.15 is a normal Gl cost associated with electricians per $1,000 of payroll.

3 Workers Compensation rates are typically calculated on a per $100 of payroll. And actual rates vary based on claims history, location, and many other underwriting factors.Xx was used as an example of what would be normal. Rate calculated by dividing 10.15 by 1,000. 10.15 is a normal Gl cost associated with electricians per $1,000 of payroll.

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