{
  "slug": "shop-labor-burden-rate",
  "title": "Shop Labor Burden Rate Calculator",
  "heading": "Shop Labor Burden Rate Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/shop-labor-burden-rate",
  "summary": "True cost per hour of an employee, beyond base wage.",
  "description": "The wage you pay an employee is only part of what they cost the business. Payroll taxes (FICA, FUTA/SUTA), workers' comp insurance, health benefits, retirement match, PTO, and other benefits all add to base wage, and that fully burdened rate is what you should use in job costing and quoting, not the raw hourly wage. Shops that quote off base wage alone routinely underprice labor-heavy jobs by 25-45%, since burden rates commonly add that much on top of wages. This calculator takes annual wage plus each burden category and computes both the burden rate as a percentage and the fully loaded hourly cost, using actual paid hours (not calendar hours) as the divisor since burden costs are spread across the hours the person is actually working and billable, not vacation days.",
  "formula": "Fully Burdened Hourly Rate = (Annual Wage + Payroll Taxes + Workers Comp + Benefits + Other) ÷ Annual Paid/Working Hours. Burden % = (Total Burden ÷ Annual Wage) × 100.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=shop-labor-burden-rate",
  "inputs": [
    {
      "id": "hourlyWage",
      "label": "Base hourly wage",
      "kind": "number",
      "hint": null,
      "default": 24,
      "unit": "$/hr",
      "min": 0,
      "max": null
    },
    {
      "id": "workHours",
      "label": "Scheduled hours per year",
      "kind": "number",
      "hint": null,
      "default": 2080,
      "unit": null,
      "min": 1,
      "max": null
    },
    {
      "id": "ptoHours",
      "label": "Paid time off (vacation/holiday/sick)",
      "kind": "number",
      "hint": null,
      "default": 160,
      "unit": "hrs",
      "min": 0,
      "max": null
    },
    {
      "id": "payrollTaxPct",
      "label": "Payroll taxes (FICA/FUTA/SUTA)",
      "kind": "number",
      "hint": null,
      "default": 9,
      "unit": "%",
      "min": 0,
      "max": 30
    },
    {
      "id": "workersComp",
      "label": "Workers' comp rate",
      "kind": "number",
      "hint": null,
      "default": 6,
      "unit": "%",
      "min": 0,
      "max": 40
    },
    {
      "id": "benefitsAnnual",
      "label": "Health + retirement benefits",
      "kind": "number",
      "hint": null,
      "default": 8500,
      "unit": "$/yr",
      "min": 0,
      "max": null
    },
    {
      "id": "otherAnnual",
      "label": "Other (uniforms, training, etc.)",
      "kind": "number",
      "hint": null,
      "default": 600,
      "unit": "$/yr",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "fullyBurdenedRate",
      "label": "Fully burdened hourly rate",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "burdenPct",
      "label": "Burden as % of base wage",
      "format": "percent",
      "hint": null,
      "primary": false
    },
    {
      "id": "totalCost",
      "label": "Total annual cost to employ",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "totalBurden",
      "label": "Total annual burden (above wage)",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Base hourly wage: 24 $/hr",
      "Scheduled hours per year: 2080",
      "Paid time off (vacation/holiday/sick): 160 hrs",
      "Payroll taxes (FICA/FUTA/SUTA): 9 %",
      "Workers' comp rate: 6 %",
      "Health + retirement benefits: 8500 $/yr",
      "Other (uniforms, training, etc.): 600 $/yr"
    ],
    "outputs": [
      "Fully burdened hourly rate: $34.64",
      "Burden as % of base wage: 33%",
      "Total annual cost to employ: $66,508",
      "Total annual burden (above wage): $16,588"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter base hourly wage ($/hr).",
      "Enter scheduled hours per year.",
      "Enter paid time off (vacation/holiday/sick) (hrs).",
      "Enter payroll taxes (fica/futa/suta) (%).",
      "Enter workers' comp rate (%).",
      "Enter health + retirement benefits ($/yr).",
      "Enter other (uniforms, training, etc.) ($/yr).",
      "Read your fully burdened hourly rate on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "hourlyWage": 14.399999999999999,
        "workHours": 1240,
        "ptoHours": 96,
        "payrollTaxPct": 5.3999999999999995,
        "workersComp": 3.5999999999999996,
        "benefitsAnnual": 5100,
        "otherAnnual": 350
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "hourlyWage": 24,
        "workHours": 2080,
        "ptoHours": 160,
        "payrollTaxPct": 9,
        "workersComp": 6,
        "benefitsAnnual": 8500,
        "otherAnnual": 600
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "hourlyWage": 38.400000000000006,
        "workHours": 3320,
        "ptoHours": 256,
        "payrollTaxPct": 14.4,
        "workersComp": 9.600000000000001,
        "benefitsAnnual": 13600,
        "otherAnnual": 950
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "Why divide by paid hours minus PTO instead of total scheduled hours?",
      "a": "Because PTO hours are paid but not productive/billable — the true cost of an hour of actual work has to absorb the cost of the hours the person is paid for but not present. Dividing by full scheduled hours understates the real burdened rate you should be using for job costing."
    },
    {
      "q": "What's a typical burden percentage in manufacturing?",
      "a": "35-50% above base wage is common for shops with standard benefits and workers' comp rates. Heavy manufacturing with higher-risk workers' comp classifications (welding, metal fabrication) often sees comp rates alone of 5-12% of payroll, pushing total burden toward the higher end of that range."
    },
    {
      "q": "Should overtime premium be factored into this rate?",
      "a": "This calculator gives you the standard-time burdened rate. For overtime hours, add the 1.5x wage premium directly, and note that most fixed burden costs like benefits don't scale with overtime hours worked, so overtime hours are actually somewhat less burdened on a percentage basis, though still more expensive in absolute dollars."
    },
    {
      "q": "Do I need to calculate this separately for each employee?",
      "a": "Ideally yes, since wage, benefit elections, and workers' comp classification (based on job duties) all vary by person. Many shops use a blended average burden rate for quick quoting and a precise per-person rate for detailed job costing and profitability analysis."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/machine-hourly-rate",
    "https://www.revenuelab.fyi/toolbox/job-shop-quote-markup"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Shop Labor Burden Rate Calculator (https://www.revenuelab.fyi/toolbox/shop-labor-burden-rate)"
}