MarginWorkshopLoaded Labor Cost
Calculate your fully loaded labor rate: base wage plus payroll taxes, workers comp, and benefits, so every bid is priced against your real labor cost, not just the wage you write on the paycheck.
How we got here
- Loaded rate = base wage × (1 + burden) = $25 × 1.30 = $32.5
- Burden added = loaded rate - base wage = $32.5 - $25 = $7.5
Loaded rate at other burden levels
| Burden scenario | Loaded rate |
|---|---|
| Low (20%) | $30 |
| Below average (25%) | $31.25 |
| Typical (30%) | $32.5 |
| Above average (35%) | $33.75 |
| High (45%) | $36.25 |
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Next Decision
Based on your results, these related decisions are available.
- Crew Cost & Required Billable RateTurn your per-worker loaded rate into a per-crew rate and see what you need to charge.
- Job Profit CheckCheck whether a specific bid actually clears a profit once you know your real labor cost.
- Service Call & Trip Charge PricingPrice what it costs just to show up, using your real loaded labor rate.
- Change Order Price CalculatorPrice added scope mid-job using your real loaded labor rate.
- Hire vs. Overtime / Second Crew Break-EvenDecide how to cover a demand spike using your real loaded labor rate.
- HVAC Maintenance Agreement Pricing & Renewal ProfitabilityPrice your maintenance agreements using your real loaded labor rate.
- HVAC Seasonal Capacity PlanningSize your peak-season staffing gap using your real loaded labor rate.
- HVAC Billable Technician Rate & Dispatch RadiusSet your billable technician rate using your real loaded labor rate.
- Employee vs. Subcontractor Cost ComparisonCompare hiring vs subcontracting using your real loaded labor rate.
- Crew Mix Economics (Apprentice vs. Journeyman)Compare crew staffing options using your real loaded labor rate.
- Plumbing Maintenance & Inspection Plan PricingPrice your maintenance plan using your real loaded labor rate.
- Crew Contribution MarginSee what this crew actually nets after direct costs, using your real loaded labor rate.
- Revenue per Field EmployeeSee how much revenue each field employee should be supporting given your real labor cost.
- Crew Utilization Rate & Idle Capacity CostPrice what idle crew time is actually costing you, using your real loaded labor rate.
- Crew Bonus/Incentive Structure Break-EvenPrice a crew bonus or incentive structure against your real labor economics.
- Apprentice-to-Journeyman Ratio EconomicsCompare apprentice-journeyman staffing using your real loaded labor rate.
- Owner Field Labor vs. Management Time (Owner Replacement Cost)Price the owner's field hours using the real loaded labor rate.
- Minimum Job Size ThresholdUse your real loaded labor rate to find your minimum viable job size.
- Geographic / Service Zone PricingPrice your travel premium using your real loaded labor rate.
- Emergency / After-Hours Premium PricingPrice your after-hours premium using your real loaded labor rate.
- Payroll Reserve / Cash BufferUse your real loaded labor rate to size your payroll reserve.
- Vehicle Downtime CostUse your real loaded labor rate to price out idle crew time during downtime.
- Seasonal Capacity & Staffing SmoothingUse your real loaded labor cost to price out the crew-retention side of this comparison.
Want to Learn More?
- GuideThe Loaded Labor Cost GuideA $20 wage is not a $20 cost. This guide shows what burden actually pays for, and why bidding off the wage instead of the loaded rate quietly loses money on every job.
- GuideThe Employee vs. Subcontractor Staffing GuideStaffing has two different questions hiding inside it: who should do ongoing work, and how should a short-term gap get covered. This guide answers both with worked numbers.
Methodology
Formula: loaded rate = base wage × (1 + labor burden). Labor burden covers payroll taxes (FICA, unemployment), workers compensation insurance, and any benefits paid on top of wages, expressed as a percentage of the base wage.
Assumption: the 20% to 45% "likely range" reflects typical contractor labor burden nationally. Your actual burden depends on your state's workers comp rates, whether you offer health insurance or retirement matching, and your payroll tax situation, enter your own number rather than relying on the range if you know it.
Limitation: this is a per-hour labor cost only. It does not include overhead recovery, profit margin, or non-labor job costs, see Overhead Allocation & Break-Even Revenue and Markup vs. Margin for the rest of the pricing chain.
Guide: The Loaded Labor Cost Guide, what burden actually covers, with a worked example.
Frequently Asked
- Why is loaded labor cost higher than the hourly wage?
- Payroll taxes, workers comp, and benefits all sit on top of the base wage; pricing against the bare wage alone understates what an hour of labor actually costs the business.
- What is typically included in the burden percentage?
- Employer payroll taxes (FICA, unemployment), workers comp premiums, and any benefits the business pays, health insurance, retirement match, PTO, expressed as a percentage on top of base wage.
- Does this change by trade or state?
- Workers comp rates vary heavily by trade classification and state, so the same base wage can carry a very different loaded rate depending on both; use your own actual comp rate, not a generic assumption.
- Where does this number get used elsewhere?
- It feeds directly into Crew Cost & Required Billable Rate, Change Order Price, and most other engines that price labor, so getting it accurate here improves every downstream calculation.