Free HR, Payroll & Job Costing Tool
True Employee Cost & Labor Burden Calculator
An employee paid $75,000 base salary actually costs $92,000+ after FICA, FUTA/SUTA, Workers' Comp, group health benefits, and 401(k) matching. Calculate your true burdened hourly rate.
Compensation & Benefits Inputs
Total Fully-Burdened Annual Cost
$95,198/yr(1.27x Multiplier)
Includes +$20,198/yr in statutory taxes, insurance, benefits, and IT overhead above base salary.
True Productive Hourly Cost
$49.58/hr
Across 1,920 net work hrs/yr
Monthly Payroll Outlay
$7,933/mo
Base: $6,250/mo
Official Excel System
$7.20$9-20%
Bi-Weekly Payroll Register & Employee Cost System
Track hourly timesheets, weekly overtime at your own multiplier, and estimated employer taxes and net pay from the rates you enter, in Excel.
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What Goes Into Labor Burden
| Cost | How it is charged | Typical size |
|---|---|---|
| Social Security | 6.2% of wages up to the annual wage base | 6.2% |
| Medicare | 1.45% of all wages | 1.45% |
| FUTA | 6.0% of the first $7,000, usually reduced to 0.6% by the state credit | ≈ $42 per employee / year |
| State unemployment (SUTA) | State rate × state wage base; new employers get a default rate | Varies by state and history |
| Workers' compensation | Rate per $100 of payroll by job class code | Low for office, high for roofing & construction |
| Benefits | Health premiums, 401(k) match, other insurance | Often the largest item |
| Paid time off | Paid hours that produce no billable work | 80–160 hours / year |
Rates change; check your state agency and insurer for current figures.
Labor Burden Calculation (Worked Example)
- Base wages: $25.00/hour × 2,080 paid hours = $52,000.
- Employer burden: FICA $3,978 + FUTA $42 + SUTA $810 + workers' comp $1,040 + health $6,960 = $12,830.
- Labor burden rate = $12,830 ÷ $52,000 = 24.7%.
- Productive hours = 2,080 − 120 hours of PTO and holidays = 1,960.
- Fully burdened rate = ($52,000 + $12,830) ÷ 1,960 = $33.08 per productive hour, 32% above the $25 base wage.
Burden rate = Employer costs ÷ Base wages
Burdened hourly = (Wages + Employer costs) ÷ Productive hours
Labor Burden FAQ
- What is a labor burden rate?
- The cost of employing someone beyond their base wage: employer payroll taxes, workers' comp, benefits, retirement match and paid time off, expressed as a percentage of base pay. It commonly adds 25% to 40%.
- Is payroll burden the same as labor burden?
- Payroll burden usually means only the employer taxes (FICA, FUTA, SUTA). Labor burden adds insurance, benefits and paid time off, so it is the number to price jobs with.
- How do you calculate fully burdened labor rate in Excel?
- Divide annual wages plus all employer costs by productive hours (paid hours minus PTO and holidays). This calculator does it live and the labor burden formula guide shows the exact Excel formula.
- Why divide by productive hours instead of 2,080?
- Holidays, vacation and sick days are paid but not billable. Spreading the annual cost over 2,080 hours understates what each worked hour really costs.
Labor Burden Rate Formula
The exact Excel formula behind this calculator, token by token, with common errors and fixes.
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