Labor burden calculator

Calculator by CrewBrain ↗

The three results

• Fully burdened hourly rate: the full cost of an hour worked, which is the wage plus every cost that grows with it, including the pay for time off. This is the number to use as the “cost of one person-hour” in the job price calculator when every hour worked is on a job.
• Labor burden rate: how many percent more than the wage the hour costs you.
• Cost of each billable hour: the cost of an hour worked divided by the share of worked hours you can bill. If a crew member works ten hours but you bill seven and a half, each billable hour carries the cost of the time in between.

What is a labor burden rate?

Labor burden is every cost of having an employee that is not the wage itself. Think of payroll taxes, workers’ compensation, insurance, paid holidays and benefits. The labor burden rate turns that into one percentage, so you can apply it to any wage.

You can work it out per person or for the whole crew. For the whole crew, add up a year of burden costs from your payroll and insurance statements, then divide by a year of wages. Per person is more exact when wages, benefits or trades differ a lot inside the team.

The dollar figure you end up with is also called the burdened labor rate or the fully loaded labor rate. Both mean the real cost of one paid hour.

What goes into labor burden in the US and in Canada

Some costs are set by law. Others are your choice. Both belong in the burden.

In the United States

• FICA (Social Security and Medicare). The employer pays 6.2% for Social Security and 1.45% for Medicare, so 7.65% of wages up to the yearly Social Security limit, per the IRS (checked October 2026).
• FUTA and state unemployment (SUTA). The federal unemployment tax (FUTA) is paid by the employer. It is reduced by a credit for what you pay into your state unemployment fund. Your state sets your SUTA rate. See the IRS guide to FUTA, and use the rate on your state notice.
• Workers’ compensation. Set by your state and by the kind of work. A roofing crew pays far more than an office worker. Use your own premium.
• Your choices: paid time off, health insurance, retirement match, uniforms, phones and tools.

In Canada

• CPP (Canada Pension Plan). The employer matches the employee’s contribution at 5.95% of pensionable earnings for 2026, up to a yearly maximum, per the Canada Revenue Agency (checked October 2026). Quebec uses its own plan (QPP) with its own rate.
• EI (Employment Insurance). The employer pays 1.4 times the employee’s premium, up to the yearly maximum, per the Canada Revenue Agency (checked October 2026).
• WCB (workers’ compensation board). Each province runs its own, and the rate depends on your industry class and your claims history. Look yours up: WorkSafeBC premium rates in British Columbia, or WSIB premium rates in Ontario.
• Vacation pay and statutory holidays. Your province sets the minimums. Both are paid hours with no customer attached.
• Employer health tax. Some provinces charge one once your payroll passes a set amount. Check your own province.

CPP and EI stop for the year once a worker reaches the maximum, and so does Social Security in the US. So a higher-paid, full-year worker costs you less in tax late in the year. For pricing, use the average over the whole year.

Paid hours you cannot bill

This part is easy to miss, and it matters most for crews. You pay for hours that no job pays for:

• Statutory holidays, vacation and sick days.
• Training, safety meetings and new-hire ride-alongs.
• Rain-outs, cancelled jobs and waiting for parts.
• Shop days: fixing equipment, cleaning the trucks, picking up supplies.

Drive, loading and setup time are different. Count them as job time, because your job estimates should already include them. Our guide on how to estimate labor hours for a job shows how.

The calculator counts these in two separate boxes, so nothing is counted twice. Holidays, vacation and sick days go in the paid time off box, as a share of wages. Everything else on the list goes in the “share of hours worked that you can bill” box. To find that share, take a few months of timesheets and divide the hours spent on jobs (including drive) by the hours actually worked. Leave holiday, vacation and sick hours out of both numbers. CrewBrain’s crew app clocks hours by job, so this number comes straight out of payroll.

Decision rule: put unbillable time in one place, never two. Either use the cost of each billable hour in your job prices, or keep the fully burdened hourly rate and treat unbillable wages as overhead paid from your margin. Counting it in both places prices you too high. Counting it in neither prices you too low.

Typical labor burden percentage, and why yours is different

You will see many “typical” ranges online. Treat them with care. Your own rate depends on things no average knows:

• Where you are. Your state or province decides unemployment tax, WCB, health tax and holiday pay.
• Your trade. Workers’ comp for roofing or tree work costs far more than for cleaning.
• Your claims history. A clean safety record can lower your WCB or workers’ comp rate over time.
• Wage level. Some payroll taxes stop once a worker hits a yearly maximum, so the rate can be lower for your highest-paid people.
• What you offer. Health plans, paid sick days and retirement matching all add to it.
• Seasons. A crew that is paid through slow weeks has more unbillable hours.

The starting numbers in the calculator above come out to about 31%. That is an example, not a benchmark. Work out your own once a year from your real statements.

Worked example: one wage, built up to a job price

Illustrative numbers, using the calculator’s starting values. A crew member earns $25 an hour.

Now price a job. Two people work 4 hours each, including drive and loading. Materials are $30, and vehicle and fuel are $40. The owner wants a 50% margin.

The wage-only price looks fine on paper. But the job really costs $332, so at $540 the real margin is about 39%, not 50%. Over a season of jobs, that gap is money that was meant for the office, ads and your own pay.

Dividing by 0.50 is not the same as adding 50% on top. Adding 50% to $332 gives $498, which is only a 33% margin. Our guide to profit margin vs markup explains why. To run your own job, put the fully burdened rate into the job price calculator.

These numbers are an illustrative example of the method. They are not typical rates, a price list or a promise of results. Use the figures from your own payroll and insurance statements.

Build your own labor burden spreadsheet

If you would rather keep this in a spreadsheet, set it up with one row per person and these columns:

1. Name and hourly wage.
2. Hours actually worked last year (leave out paid holidays, vacation and sick days), and how many of those were on jobs, including drive.
3. Employer payroll taxes paid last year, from your payroll year-end summary.
4. Workers’ comp or WCB premium for that person’s wages.
5. Insurance, benefits, uniforms and tools for that person.
6. Total burden: the sum of columns 3 to 5, plus wages paid for holidays, vacation and sick days.
7. Labor burden rate: total burden ÷ wages for hours actually worked.
8. Fully burdened hourly rate: wage × (1 + burden rate).
9. Cost per billable hour: (wages for hours worked + total burden) ÷ hours on jobs.

Update it once a year, and whenever wages, tax rates or premiums change. Then use the result as the hourly cost in your job pricing and in the hourly rate calculator. To see whether finished jobs really earned their price, read job costing for service companies.

Where to find your own numbers

1. Payroll taxes: your payroll provider’s year-end summary of what the employer paid.
2. Workers’ compensation: your latest premium divided by your insured payroll.
3. Insurance: any premium you pay that is based on payroll or crew size.
4. Paid time off: the weeks of paid vacation, holidays and sick days you give, divided by the weeks actually worked. Four weeks off in a 48-week working year is about 8%.
5. Billable share: clock-in time that was spent on customer work, divided by total clock-in time.

Why owners skip this step

The wage is easy to see and the rest is spread across tax bills, insurance statements and payroll reports. So many owners price from the wage alone, and the burden quietly comes out of their own pay. Put the real number into your job pricing and the margin you set is the margin you actually keep.

Questions owners ask