Find the true cost of labor for a job — crew size × hours × rate, plus the burden (taxes, insurance, benefits) most people forget.
Labor burden (payroll taxes, workers' comp, insurance, benefits) often adds 20–40% to base wages — leaving it out is why jobs lose money. Estimate only.
Base wages are only part of it. Payroll taxes, workers' comp, insurance, and benefits — the "burden" — add 20–40% on top. Pricing off the bare hourly rate is one of the most common ways a job quietly loses money.
Total labor = workers × hours × rate × (1 + burden %)
A labor cost figure has two layers. The first is the wage: how many people, for how many hours, at what hourly rate. The second is the labor burden — everything an employer pays because that person is on payroll that never appears on the pay stub: the employer share of Social Security and Medicare (7.65% of wages in the United States), federal and state unemployment tax, workers' compensation premiums, general liability insurance priced on payroll, paid time off, and any health or retirement contribution. The calculator multiplies the wage layer by (1 + burden) so the second layer is never forgotten. What it ignores is just as important: it does not price unbillable time (travel, setup, the parts run), it treats every worker as costing the same rate, and it assumes the hours you enter are the hours the job will actually take.
Three workers for 24 hours each is 72 labor hours. At $28 an hour the base wages are 72 × $28 = $2,016. A 25% burden adds $2,016 × 0.25 = $504, for a total labor cost of $2,520. Divide that back by the 72 hours and the crew's real cost is $35 an hour, not $28. If the trade is heavier and the burden is nearer 35% — roofing and concrete workers' comp rates push many crews there — the same 72 hours cost $2,721.60, an extra $200 that a bid built on the bare wage has already given away.
The 25% default is a placeholder, and the honest way to replace it is last year's numbers. Take total payroll-related costs for the year — employer payroll taxes, workers' comp, liability insurance tied to payroll, paid leave and benefits — and divide by total gross wages paid. A landscaping or painting crew often lands around 20–30%; trades with high workers' comp classifications (roofing, framing, demolition) are frequently 35% or more; office staff sit lower. The rate varies by state because unemployment and workers' comp premiums do, and it moves every year, so recompute it each January rather than carrying a number forward.
This page prices one crew on one job. Once you are running several jobs a month, the question changes from "what does this job's labor cost?" to "what did labor actually cost against what I quoted, and which jobs went over?" — and that needs a running job-cost record rather than a one-off number. The Job Cost & Markup workbook inside our Trades Job & Money Toolkit logs quoted versus actual hours and burden per job so the variance is visible before the next bid, and the labor cost percentage calculator shows whether labor is eating too much of revenue overall.
Employer payroll taxes, workers' compensation, liability insurance, and any benefits — everything you pay beyond the wage itself.
It varies by trade and state; 20–40% is common. Work out your own from last year's totals for the most accurate number.
Related: job cost calculator · labor cost percentage calculator · overtime pay calculator · all free calculators.
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Last reviewed: September 2026. Free to use, no signup — Labor Cost Calculator by ToolWise Digital.
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