All the extra costs of employing workers beyond their hourly pay, like taxes and insurance.
Labor burden is the total cost of employing a worker beyond their base hourly wage, including payroll taxes, workers compensation insurance, health insurance, retirement contributions, and other employee benefits. Estimators apply a labor burden rate of typically 25 to 45 percent of base wages when calculating labor costs in a bid. Ignoring labor burden leads to significant cost underestimates.
A carpenter earning $35 per hour has a total labor burden cost of $52 per hour after adding payroll taxes, workers comp, and benefits.
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