Labor burden calculator
What an employee really costs per hour once payroll taxes, workers’ comp, health insurance, other benefits and paid time off are added to the wage.
Your numbers
PayOn top of pay See your resultResult
Real cost per hour worked $39.902,000 hours actually worked Labor burden 27.9%$17,394 on top of $62,400 in wages Cost per paid hour $38.36 Total cost per year $79,794 Stop working this out by handFleetZap work orders record each technician’s time with timers, so the labor cost on every job uses real hours.
See FleetZap Maintenance · Try the demoThe formula
Burden % = (Payroll taxes + Workers’ comp + Benefits) ÷ Wages · Real hourly cost = Total cost ÷ Hours worked
With the example: $62,400 in wages plus $17,394 in taxes, insurance and benefits is $79,794 a year, a burden of 27.9%, or $39.90 for each of the 2,000 hours worked. Employer Social Security stops at the yearly wage base, so very high wages carry a lower rate. Workers’ comp and unemployment rates depend on your state and job class: use the figures from your policy and tax notices.
Using the numberWhat to do with it
- Use the real hourly cost, not the wage, when you set a shop rate; the mechanic labor rate calculator takes it from there.
- Overtime raises the wage part but not every benefit, so the burden percentage moves with it.
- Recheck it each January, when tax rates, wage bases and insurance renewals change.
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The heart of FleetZap, and everything a maintenance team needs in one place: work orders and preventive maintenance, inspections and the field app, plus a parts store with purchasing, compliance and certificate tracking, multi-location assets with a full lifecycle, and the KPIs that prove it’s working.
- Work orders
- Preventive maintenance
- Procedures, inspections & field app
- Parts & purchasing
- Compliance
- Assets, reports & KPIs
Good to know
What is labor burden?The costs an employer pays on top of wages: payroll taxes, workers' comp, unemployment insurance, health insurance and other benefits, often shown as a percentage of wages.
What is the employer payroll tax rate?Employers pay 7.65% in FICA: 6.2% Social Security on wages up to the yearly wage base, plus 1.45% Medicare. Unemployment and workers' comp rates depend on the state and job class.
Why divide by hours worked, not hours paid?Paid time off is paid but not worked, so the real cost of each working hour is higher than the cost of each paid hour.
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