Labor Burden Calculator

The labor burden calculator is a helpful tool that calculates the additional costs associated with employing an individual beyond their hourly wage. By using this estimator, you can gain a clearer understanding of your labor burden and make informed decisions. We advise you to consult your accountant after using the calculator to ensure accuracy. It is important to note that the expenses of hiring and keeping an employee can accumulate quickly. When establishing what it costs to deliver services, it may appear straightforward to use an employee’s hourly wage, but wages are only part of the equation. Without properly accounting for all expenses, you may find that your business model is not nearly as profitable as you thought.

Instructions:

To estimate the labor cost for an hour, follow these steps:

Step 1: In the “Starting Wage” field, enter the hourly rate for the employee.

Step 2: Retrieve your Worker’s Compensation Declaration and enter the rate below. Ignore the “general liability” field, put a zero in that field.

Step 4: When you enter the WC Rate field of the calculator, the calculator will display the cost for one hour of labor.

Step 5: Repeat the process for each level of employee to determine the labor cost for one hour.

Note: For illustration purposes, standard rates for FICA, FUTA, and SUTA have been pre-entered. Please note that your state may or may not have FUTA or SUTA, but we have included them in this calculation to emphasize the additional insurance costs per hour of labor. This calculator is designed as a general guideline. Confirm with your state or CPA exact calculations. This is just for estimating purposes only.