Tools/Labor Burden Rate Calculator

Labor Burden Rate Calculator

Calculate the true cost of an employee beyond their hourly wage. Includes payroll taxes, workers' comp, health insurance, and benefits.

Payroll Taxes

Insurance & Benefits

What Is Labor Burden?

Labor burden is the total indirect cost of employing a worker beyond their base wages. It typically adds 20-40% on top of hourly wages. Knowing your true labor cost is essential for accurate job costing and bidding.

Typical Burden Rates

  • Small biz:20-30% (minimal benefits)
  • Mid-size:30-40% (health + retirement)
  • Union shops:40-60% (full benefits package)

Know your true labor costs

Kumevo tracks actual hours per employee per job so you always know your real labor burden. Integrates with QuickBooks for payroll.

Understanding Labor Burden Rate

The labor burden rate represents all employer-paid costs on top of an employee's base wage. For contractors, understanding this number is critical because it directly impacts job costing accuracy and bidding competitiveness.

Components of Labor Burden

  • FICA taxes (7.65%): Social Security (6.2%) and Medicare (1.45%)
  • FUTA (0.6%): Federal unemployment tax on first $7,000 of wages
  • SUTA (varies): State unemployment tax, typically 1-5%
  • Workers' comp: Varies widely by trade (2-20%+ for high-risk trades)
  • Health insurance: Average $7,911/year for single coverage
  • Retirement: Typical employer match is 3-6% of wages

Example

An employee earning $25/hr with standard taxes, 5% workers' comp, $500/mo health insurance, and 3% retirement match has a burden rate of approximately $9.50/hr, bringing the true cost to $34.50/hr — 38% above the base wage.

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