Labor Burden Calculator

About the Labor Burden Calculator

Calculates an employee's fully-burdened hourly cost by adding taxes, benefits and overhead (the burden rate) to their base wage.

How to use this calculator

1. Enter the employee's hourly wage or salary amount.
2. Enter the burden percentage as a percent, such as \(35\) for \(35\\%\).
3. Check whether the result should represent a total hourly cost, weekly cost, or annual cost, depending on the pay period you entered.
4. Use the result to compare staffing costs, set prices, or plan a budget.

The formula explained

The formula computes the fully burdened cost by multiplying the base wage by \(1 + burden\\%\) after converting the percent to a decimal. In other words, it adds the extra burden cost on top of the wage.

• burdened = the fully burdened cost
• wage = the base pay before added costs
• burden% = the added labor burden rate, written as a percent

Step by step method

1. Start with the base wage.
2. Convert the burden percentage to a decimal and add \(1\).
3. Multiply the wage by that total.
4. Interpret the result as the full cost for the same pay period.

Worked example

Problem. An employee earns \(\$25\) per hour, and the labor burden is \(30\\%\). What is the fully burdened hourly cost?

1. Convert \(30\\%\) to \(0.30\), then add \(1\) to get \(1.30\).
2. Multiply \(25 \\times 1.30\).
3. The fully burdened cost is \(\$32.50\) per hour.

Tips and common mistakes

• Make sure the burden percentage is entered as a percent, not as a decimal unless the calculator specifically asks for a decimal.
• Keep the pay period consistent, because an hourly wage with an annual burden rate needs matching units before the result is useful.

Frequently asked questions