Labor Cost Calculator
The wage is never the cost. On top of every hourly rate sits the employer share of payroll taxes, unemployment insurance, workers' comp, and whatever benefits you pay for, and pricing work from the bare wage means the gap comes out of your margin. This calculator loads a wage into its true hourly cost and the annual figure, which is the floor under any rate you quote. Pair it with the BLS wage data on our trade rates page to see where your labor market sits.
- Base wage
- $22.00 / hour
- Payroll taxes and insurance (10%)
- $2.20 / hour
- Benefits, spread across hours
- $2.31 / hour
- Fully loaded cost
- $26.51 / hour
- Annual cost (40 h/week)
- $55,140.80
This is what an hour of this employee actually costs you, and the floor under any billed rate. Charging less than the loaded cost loses money before overhead.
What to Know
- The employer's mandatory load starts at 7.65% (Social Security + Medicare match) before unemployment insurance and workers' comp; 10% to 14% is a realistic all-in tax-and-insurance figure for most small employers.
- The common rule of thumb is that an employee costs 1.25x to 1.4x their wage once taxes and benefits are counted. This calculator computes your actual multiple instead of guessing inside that range.
- Workers' comp varies enormously by trade: clerical work costs well under 1% of payroll, roofing can exceed 20%. Trade businesses should use their real policy rate in the percentage field.
- Benefits spread across fewer hours cost more per hour: a $400/month health contribution adds 23 cents an hour at 40 hours a week, but 46 cents at 20. Part-time labor carries proportionally heavier benefit loads.
- The loaded cost is the break-even floor for billing, before a dollar of overhead (vehicle, tools, office, software) or profit. Billed rates at 2x to 3x the wage exist because that stack is real.
What Trades Earn: Median Hourly Wages (BLS, May 2025)
National median wages for workers in each trade, not billed rates. A business bills 2x to 3x the wage to cover taxes, insurance, overhead, tools, and non-billable time; use these as the labor-cost floor under a quote, not the price.
| Trade | Median hourly wage |
|---|---|
| Plumbers, pipefitters, steamfitters | $34.70 |
| Electricians | $34.37 |
| HVAC mechanics and installers | $32.75 |
| Carpenters | $31.55 |
| Roofers | $27.95 |
| Painters (construction and maintenance) | $26.64 |
| Photographers | $21.47 |
| Landscaping and groundskeeping workers | $18.82 |
| Janitors and cleaners | $17.71 |
| Maids and housekeeping cleaners | $17.07 |
Source: BLS Occupational Employment and Wage Statistics, May 2025 national estimates · checked 2026-08
Frequently Asked Questions
What percentage should I use for payroll taxes?
Start at 7.65% for the FICA match, add your state unemployment rate (commonly 1% to 4% on the first slice of wages), and your workers' comp rate for the role. Around 10% is a fair default for low-risk work; trades with high comp rates should use their policy's actual figure.
Does this include overhead?
No, deliberately. Loaded labor cost covers what the employee costs. Rent, vehicles, tools, software, and admin time are overhead, which belongs in your markup. Keeping the two layers separate is what makes a quote auditable when it wins or loses.
How do I go from loaded cost to a billed rate?
Add overhead per billable hour, then apply your target markup. If loaded cost is $26.51 and overhead runs $10 per billable hour, a 60% markup on the $36.51 puts the rate near $58. Our markup calculator does that step.
Need the Document, Not Just the Number?
Results are general-purpose calculations, not legal, tax, or accounting advice. How our math is built and checked →