Labor burden rate: your true cost per hour
The wage you pay is not what an hour of labor costs you. Your fully burdened rate— wage plus everything you pay on top — is the number your bids should use, and it's usually 25–40% higher than the wage.
What labor burden includes
- Payroll taxes — the employer side of FICA, plus federal and state unemployment (FUTA/SUTA).
- Workers' compensation — rated by trade; roofing and framing cost far more than finish work.
- Benefits — health insurance, paid time off, retirement, any per-diem.
- Overhead allocation — the truck, fuel, tools, phone, and admin time it takes to keep that worker productive.
How to calculate it
Add the components as a percentage of the wage, then apply them:
Fully burdened rate = wage × (1 + total burden %)
So a $30/hr worker at a 35% burden costs you $40.50/hr. Run your own numbers in seconds with the free labor burden calculator.
Why it decides whether your bids hold
If you estimate labor at the bare wage, you under-cost every hour by your full burden. On a job with hundreds of labor hours, that's thousands of dollars of margin gone before you swing a hammer. Bid at the burdened rate — and then check the whole job with the job profit calculator.
Keep it current automatically
Burden drifts as wages, comp rates, and overhead change. Instead of re-deriving it by hand, Sevyncarries your real labor cost into every estimate and pulls your actual costs from your bank so each job's profit reflects what labor truly cost — not last year's number.
FAQ
What is a typical labor burden rate in construction?
It varies by trade and state, but a fully burdened rate commonly lands 25–40% above the base wage once you add payroll taxes, workers' comp, benefits, and overhead. Workers' comp alone swings widely by trade and pushes higher-risk trades toward the top of that range.
What's included in labor burden?
Payroll taxes (FICA, FUTA/SUTA), workers' compensation, benefits (health, PTO, retirement), and an allocation of overhead (truck, tools, phone, admin). It's everything you pay to employ someone beyond the wage itself.
How do I calculate my fully burdened labor rate?
Add your burden components as a percentage of the wage, then multiply: burdened rate = wage × (1 + total burden %). For example, $30/hr at a 35% burden is $40.50/hr. Use the free labor burden calculator to do it instantly.