Why the payroll burden rate calculator matters
Quoting off base wage is how service businesses end up busy and unprofitable, because the burden and the unbillable hours never appear in the price. This page turns that decision into a handful of inputs you can defend in a budget review: volume, unit cost, rate of adoption, and time. The output is a planning baseline, not a promise — it tells you whether the idea deserves a vendor quote, a pilot, or a pass.
- • Biggest swing factor: billable utilisation, which is usually the biggest hidden cost
- • Second-order factor: benefits and insurance loaded on top of wage
- • Often ignored: employer payroll taxes, which scale with every raise
What actually changes the answer
billable utilisation, which is usually the biggest hidden cost moves this number first, then benefits and insurance loaded on top of wage. Run a conservative case and an upside case before you commit. If the maths only works in the upside case, treat it as a time-boxed test with a kill date rather than a line in next year's plan.
What to do with the result
Use the effective per-person cost as the floor in your pricing model, then add target margin on top of that — never on top of base wage.
Related guides
Long-form playbooks on the same topic, written by the RevenueLab editorial team.
FAQ
What does the payroll burden rate calculator work out?
It applies Gross = people × price each × (1 − discount%); Effective cost = gross ÷ utilisation%, showing the true price of what actually gets used to the values you enter for number of employees, average monthly wage cost each ($), share of paid hours that are billable, any wage subsidy or credit. Quoting off base wage is how service businesses end up busy and unprofitable, because the burden and the unbillable hours never appear in the price.
How accurate is this payroll burden rate calculator?
A burden estimate from the figures you enter. Workers' compensation rates vary sharply by trade and state. Replace the defaults with your own invoice, usage export, payroll data, statement, or vendor quote before making a commitment — the maths is exact, so the answer is only as good as the inputs you feed it.
Which input should I stress-test first?
billable utilisation, which is usually the biggest hidden cost. Re-run with a pessimistic value for it; if the decision flips, that assumption is the thing you need real data on before signing anything. After that, check benefits and insurance loaded on top of wage and employer payroll taxes, which scale with every raise.
Which scenario should I start from?
Start with the preset closest to your situation — small group, current setup, larger group — then edit the sliders. Presets are realistic starting points, not benchmarks to match, and every change updates the result instantly.
What should I do after running the numbers?
Use the effective per-person cost as the floor in your pricing model, then add target margin on top of that — never on top of base wage. A useful planning benchmark to compare against: Fully burdened labour typically runs 1.25x to 1.4x base wage, and higher in trades with heavy insurance.
Can I share or save this calculation?
Yes. Your inputs are written into the page URL, so copying the link shares the exact scenario you are looking at — the person who opens it sees the same numbers. You can also export the inputs and results to CSV or PDF from the result card and keep it with the rest of your workings.
How this calculator is built
Independently maintained
Written by Sam Doshi and the RevenueLab editorial team. We don't sell the data feeds this tool is built on.
Sourced from primary data
Benchmarks come from public AdSense / Stripe / IRS disclosures and reader-submitted data — never third-party "$X per view" claims. Full methodology.
Last editorial review
Reviewed on a rolling quarterly cycle. Dated reviews are published on the methodology record for each calculator.
Editorial standards
See our editorial policy and disclaimer. Results are estimates, not advice.