Free HR calculator
Labor Burden Rate Calculator
See the full cost of each productive hour, including payroll taxes, benefits, workers compensation, training, and overhead. Use that rate to budget projects, price services, and compare staffing options.
About this calculator
Method note The fully loaded cost of an employee Note reviewed:
What to expect Have annual pay, productive hours, and estimated employer costs ready. About one minute.
Pay and productive hours
Total cost per productive hour
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Send yourself a copy of your calculation and inputs.
The labor burden calculation
How salary becomes an hourly cost
Start with annual salary and add employer payroll taxes, benefits, insurance, training, and overhead. Divide those additional costs by salary to calculate the burden rate. Then divide total annual employment cost by productive hours to find the hourly rate.
Calculation details
What goes into the burden rate
Employer FICA is generally 7.65%, including 6.2% for Social Security up to the annual wage base and 1.45% for Medicare. FUTA starts at 6% on the first $7,000 of wages and is often reduced to 0.6% through a state unemployment tax credit of up to 5.4%. State unemployment rates depend on the employer and location. For wages below the Social Security wage base, a combined 8% to 12% is a rough planning range for initial estimates.
Health insurance can represent a substantial share of employment costs. KFF's 2025 survey reported average employer health insurance contributions of approximately $7,900 for single coverage and $20,100 for family coverage. For a $75,000 salary, those amounts equal roughly 11% and 27%. Add retirement, leave, equipment, training, and overhead using your actual expenses.
Planning ranges by industry
For initial comparisons, use these illustrative total burden ranges, developed for this calculator: professional services, 28% to 40%; manufacturing and healthcare, 35% to 50%; skilled trades and construction, 45% to 65%; and retail and hospitality, 20% to 35%. Your payroll and benefit costs will give you a rate specific to each role.
Put your hourly rate to work
Project budgets: A manager earning $75,000 with a 41% burden costs about $50.66 per hour over 2,080 hours. For 100 project hours, that is approximately $1,460 more than budgeting at base pay alone.
Service pricing: Start with the total hourly cost when setting billable rates.
Staffing decisions: Compare total employee costs with overtime and contractor rates. At $55,000 in salary and a 41% burden, hourly cost is about $37 over 2,080 hours, compared with $26.44 in base pay.
Budget using total labor cost
Create hourly rates by role
Create a rate card for several roles. The Benchmark tab includes published reference figures, and the Summary tab shows burden multipliers and hourly costs.
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Compare this estimate with your records to help plan your next step.