Labor cost and rate calculator
Work out your labor cost per hour, burden included, and the rate to charge. Type your crew, their average wage, the burden on top of it, how many paid hours they really bill, your yearly overhead and the margin you want. You get what a field hour costs you and what to charge for it. Nothing is sent anywhere.
What the starting numbers assume
The numbers already in the boxes are an example, not an average of contractors. Replace each one with your own; the sources are listed at the end of this page.
The math also uses one average wage for the whole crew and leaves out overtime. Your own pay counts only if you add it to overhead.
Average wage: $20
A round example. The national median for construction laborers and helpers was $22.44 an hour in May 2025 (BLS); skilled trades run higher.
Labor burden: 25%
An example between two BLS numbers for construction and field occupations in June 2026: legally required benefits, which include payroll taxes and workers' comp, were 13.1% of wages, and all benefits were 45% of wages.
Paid hours: 1,800
Full time is 2,080 hours (52 weeks x 40). The example leaves out 280 hours of unpaid time off and slow weeks. If you pay all year, type 2,080.
Billable share: 85%, crew of 4, overhead $55,000, margin 15%
Examples only. No public benchmark fits every trade, so use your time cards and last year's books.
Why the wage is not your cost
A $20 wage costs more than $20. Payroll taxes, workers' comp, insurance and benefits sit on top of it: that is the labor burden, written as a share of wages. Employer Social Security and Medicare alone are 7.65% of wages; workers' comp and liability rates depend on your trade and state.
Then not every paid hour is sold. Drive time, shop time, weather and callbacks are paid and not billed, so the whole year's labor and overhead has to be recovered on the hours that are.
Formulas
Field hours = workers x paid hours x billable share. Loaded cost per hour = (paid hours x wage x (1 + burden) + overhead) / field hours. Rate to charge = loaded cost / (1 - margin).
The margin is on the price, not a markup on cost: a 15% margin on a $38.40 loaded cost is $45.17 an hour.
The same budget in Groundflag
Groundflag's company budget asks for these same fields (Price book, then Company budget) and saves the rate to charge as the labor rate of the price book, so every estimate prices an hour of a crew the same way. Job costing then shows the hours and dollars actually spent against that budget.
Questions
How do I calculate labor cost per hour?
Add the burden to the wage ($20 with a 25% burden is $25), multiply by the paid hours of the crew, add the year's overhead, then divide by the hours the crew actually bills. With the example numbers on this page that is $38.40 per field hour, before margin.
What is a good labor burden for a contractor?
It depends on the trade and the state, because workers' comp and liability insurance move the most. Add up what you paid last year in payroll taxes, insurance and benefits and divide it by the wages: that is your own burden, better than any average.
What share of paid hours is billable?
Count the hours your crews logged on jobs last year and divide by the hours you paid. Anything you lose to travel, the shop, rain and warranty work comes off that share and raises the hourly rate.
Should I use markup or margin on labor?
Either works if you are consistent, but they are not the same number: a 15% margin needs a 17.6% markup. The markup and margin calculator converts one into the other.
Sources
- Construction laborers and helpers, Occupational Outlook Handbook, BLS, checked on October 31, 2026
- Employer Costs for Employee Compensation, June 2026, table 4, BLS, checked on October 31, 2026
- Topic no. 751, Social Security and Medicare withholding rates, IRS, checked on October 31, 2026
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