Labor burden
Labor burden is everything you pay on top of a worker's wage — payroll taxes, workers' comp, benefits, and overhead — so the true cost of an hour is usually 25–40% above the wage.
If you bid labor at the bare wage, you under-cost every hour by your full burden. The fully burdened rate (wage × (1 + burden %)) is the number your estimates should use. Workers' comp varies widely by trade, which is why higher-risk trades carry a higher burden.
See also: Labor burden calculator
Related terms
- Overhead — Overhead is the cost of running your business that isn't tied to one job — truck, tools, office, insurance, admin — recovered by adding it to every bid.
- Markup — Markup is profit measured against your cost — the percentage you add on top of cost to get your price.
- Job costing — Job costing is tracking the actual costs of a specific job — materials, labor, subs, and other expenses — against what you estimated, so you know the real profit on that job.