Labor Cost Calculator
Calculate total labor cost per employee and team with overhead, benefits, and burden rate.
By Konstantin Iakovlev · Updated September 2026 · Source: BLS — Employer Costs for Employee Compensation, June 2026
Loaded Hourly Cost
$45.00
Annual Per Employee
$93,600.00
Total Annual Labor
$468,000.00
Per Employee Cost
| Effective Hourly Rate | $45.00 |
| Weekly Cost | $1,800.00 |
| Monthly Cost | $7,799.40 |
| Annual Cost | $93,600.00 |
Total Team Cost (5 employees)
| Weekly | $9,000.00 |
| Monthly | $38,997.00 |
| Annual | $468,000.00 |
Use the Labor Cost Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.
Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.
How It Works
Workforce planning falls apart when it runs on base pay alone. The fully loaded cost of an employee folds in every overhead, benefit, and burden rate.
The calculation starts from the hourly wage and adds a benefits add-on per hour, which should cover employer payroll taxes (7.65% FICA plus unemployment taxes), health insurance and retirement contributions. That loaded rate is then multiplied by an overhead multiplier for rent, utilities, equipment and administrative staff: loaded hourly cost = (hourly rate + benefits per hour) × multiplier. The weekly cost is the loaded rate times hours per week, the annual figure uses 52 weeks and the monthly one 4.333 weeks, and the team totals multiply by the number of employees. Enter annual revenue to see labor as a percentage of it.
Skip the employer-paid taxes and insurance premiums and the figure you get understates reality by a wide margin, so fold all of them into the benefits add-on. Overhead is the trickier part: because the multiplier scales wages plus benefits, you can derive it from your own books as 1 + (annual overhead ÷ annual wages and benefits), so overhead equal to half of loaded pay gives 1.5.
Example: Loaded Cost of a Five-Person Crew
- 1 Input: five employees at $25.00 an hour, 40 hours a week. Benefits add-on: $5.00 an hour, made up of employer FICA (7.65% × $25 = $1.91) and $3.09 of health, retirement and unemployment-tax costs. Overhead multiplier: 1.5, meaning overhead runs at half of wages plus benefits.
- 2 Loaded hourly cost: ($25.00 + $5.00) × 1.5 = $45.00.
- 3 Per employee: $45.00 × 40 hours = $1,800 a week, and $1,800 × 52 = $93,600 a year. The monthly figure uses 4.333 weeks: $1,800 × 4.333 = $7,799.40.
- 4 Team of five: $9,000 a week, $38,997.00 a month and $468,000 a year. Entering $1,500,000 of annual revenue shows labor at 31.2% of revenue.
Source: BLS — Employer Costs for Employee Compensation, June 2026 · Last updated: September 2026
Frequently Asked Questions
How do you calculate labor burden rate?
What is included in total labor cost?
How do I reduce labor costs without layoffs?
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