Labor Cost Calculator

Calculate comprehensive labor costs including wages, benefits, taxes, and overhead

✓ Total Labor Cost ✓ Benefits & Taxes ✓ Labor Burden

Labor Cost Calculator

Basic Wage Information

Base hourly rate
Regular working hours
Working weeks (accounting for vacation)

Overtime & Premium Pay

Average overtime hours per week
Overtime pay multiplier (e.g., 1.5 for time-and-a-half)

Benefits & Taxes (%)

Employer portion
Employer portion
State & federal unemployment

Additional Benefits

Employer contribution
Employer match/contribution
Workers comp, training, etc.

Overhead & Indirect Costs

Office space, equipment, utilities
Actual productive time percentage

About Labor Costs

Labor costs include wages, benefits, taxes, and overhead expenses associated with employees.

Components:

• Base wages & overtime
• Payroll taxes (FICA, FUTA, SUTA)
• Benefits (health, retirement)
• Overhead & indirect costs

Cost Categories

Direct Labor: Wages + Overtime
Payroll Taxes: FICA + FUTA + SUTA
Benefits: Health + Retirement
Overhead: Facilities + Equipment

Quick Examples

Manufacturing Worker
$25/hr, 40hrs/week
Full benefits package
Office Employee
$30/hr, 40hrs/week
Standard benefits
Part-time Worker
$20/hr, 25hrs/week
Limited benefits

Labor Burden Rate

Definition: Total cost above base wages
Typical Range: 25% - 40% of wages
Includes: Taxes, benefits, overhead
Formula: (Total Cost - Wages) ÷ Wages

Industry Benchmarks

Manufacturing: 30-35%
Construction: 35-45%
Professional Services: 25-35%
Retail/Hospitality: 20-30%
Advertisement

How to Use

  1. Enter the employee's hourly wage and working hours
  2. Add overtime hours and premium pay rates if applicable
  3. Input payroll tax rates (Social Security, Medicare, Unemployment)
  4. Include benefit costs (health insurance, retirement contributions)
  5. Add overhead and indirect cost percentages
  6. Calculate to see total labor cost and burden rate

Understanding Labor Costs

Direct Labor Costs

Base wages, overtime pay, and bonuses directly paid to employees.

Indirect Labor Costs

Payroll taxes, benefits, insurance, and overhead expenses.

Labor Burden

The additional cost above base wages, typically 25-40% of total compensation.