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Free Labor Cost Calculator
An employee’s true hourly cost is not their wage. It is the base hourly wage plus the employer payroll taxes, workers’ compensation, and overhead you carry for every hour they work — the number known as the loaded labor rate. Add those costs to the wage and you have the rate to bid, budget, and job-cost against. Enter a wage below to see the loaded hourly rate, what it costs per week, and what it costs per year. The payroll tax field starts at 7.65%, the standard employer FICA share and the rate our own job costing content uses; workers’ comp and overhead start empty, because those numbers are yours, not ours.
Calculate a loaded hourly rate
Enter a base wage and the employer costs you carry on top of it. Only the payroll tax field starts with a number in it — 7.65%, the standard employer FICA share.
Workers’ comp and other overhead start empty on purpose. Workers’ compensation rates vary by state and by each employee’s job classification, so there is no default worth prefilling — take the rate off your own policy. “Other overhead” is optional: use it for anything you pay per hour worked that is not the wage or a percentage of it. Leave either field blank and it adds nothing at all.
| Cost component | Rate entered | Cost per hour |
|---|---|---|
| Base hourly wage | — | $20.00 |
| Employer payroll tax | 7.65% of wage | $1.53 |
| Workers’ compensation | Not entered | $0.00 |
| Other overhead | Not entered | $0.00 |
| Loaded hourly rate | 7.65% above the wage | $21.53 |
The annual figure is simply the weekly cost times 52 weeks. It assumes the same hours every week and does not model unpaid weeks, seasonal shutdowns, overtime premiums, or benefits — add anything else you pay per hour worked to the overhead field. To split a week into regular and overtime hours first, use the free time card calculator.
A Worked Example: $20.00 an Hour
Here is the whole calculation on a $20.00 wage, done in public. Read the inputs carefully: only the 7.65% payroll tax is a real, sourced rate. The 5% workers’ comp rate and the $1.00 per hour of other overhead are example inputs, chosen to keep the arithmetic easy to follow. They are not benchmarks, averages, or recommendations — your rates will differ.
| Cost component | Input | Cost per hour |
|---|---|---|
| Base hourly wage | $20.00 per hour | $20.00 |
| Employer payroll tax | 7.65% of wage (standard FICA share) | $1.53 |
| Workers’ compensation | 5% of wage — example input only | $1.00 |
| Other overhead | $1.00 per hour — example input only | $1.00 |
| Loaded hourly rate | $3.53 above the wage (17.65%) | $23.53 |
| Cost for a 40-hour week | 40 hours × $23.53 | $941.20 |
| Cost for a year | $941.20 × 52 weeks | $48,942.40 |
The $20.00 wage costs $23.53 an hour once it is loaded — 1.18× the base rate, or $7,342.40 a year above wages on a 40-hour week. Quote the $20.00 and that difference comes out of the margin.
Base Wage Plus Employer Payroll Tax
Common base wages carrying the 7.65% employer payroll tax and nothing else — no workers’ comp, no overhead, no assumptions about your business. This is the floor under any loaded rate: your own workers’ comp rate and per-hour overhead go on top of these figures.
| Base wage | Payroll tax (7.65%) | Wage + payroll tax | 40-hour week |
|---|---|---|---|
| $15.00 | $1.15 | $16.15 | $646.00 |
| $20.00 | $1.53 | $21.53 | $861.20 |
| $25.00 | $1.91 | $26.91 | $1,076.40 |
| $30.00 | $2.30 | $32.30 | $1,292.00 |
Every row is the wage plus 7.65% of the wage, rounded to the cent — pure arithmetic, which is why no rate had to be assumed to publish it.
How to Calculate a Loaded Labor Rate
1. Start with the base hourly wage
Use the wage actually paid for the hour you are costing. If the hour is paid at an overtime or premium rate, load that rate rather than the standard one — the percentages below apply to whatever wage the hour earns.
2. Add the employer payroll tax
Multiply the wage by 7.65%, the standard employer FICA share and the rate used in our job costing content: $20.00 × 7.65% = $1.53 per hour.
3. Add your workers’ comp rate — your real one
Workers’ compensation is a percentage of payroll set by your state and by each employee’s job classification, so it has to come off your own policy. There is no national figure to drop in here, which is why the calculator leaves the field empty rather than guessing.
4. Add anything else you pay per hour, then multiply out
Unemployment taxes, liability insurance, benefits, uniforms, vehicles, tools — anything you can express as dollars per hour worked belongs in the overhead field. The total is your loaded hourly rate; multiply by hours per week for the weekly cost, and by 52 weeks for the annual cost.
Frequently Asked Questions
What is a loaded labor rate?
It is an employee’s true cost for one hour of work, not just their wage. Our guide to small business resolutions lists what belongs on top of the hourly wage to reach a final hourly cost: FICA and Medicare, federal and state unemployment taxes (FUTA and SUTA), workers’ compensation, liability insurance, and city or county income taxes where they apply. A “loaded” pay rate rolls all of that into one number, so job costing tools can show real, not estimated, profit or loss for every job.
What does the 7.65% payroll tax rate cover?
It is the standard employer share of payroll tax on wages — the figure Chronotek Pro’s job costing uses when it loads labor dollars. As our security guard company guide puts the formula: labor dollars are loaded to include “the employee’s base rate + payroll taxes (7.65%) + workers’ comp (?%) + benefits (?%).” That 7.65% covers the employer’s payroll tax on the wage and nothing else. Unemployment taxes, liability insurance, and benefits are separate costs, which is why this calculator gives workers’ comp and overhead their own fields instead of burying them in one percentage.
Why is there no default workers’ comp rate in the calculator?
Because there is no honest one to supply. Workers’ compensation rates vary by state and by each employee’s job classification — the same wage can carry very different premiums for an office role and a field crew. Notice that our own job costing formula writes it as “workers’ comp (?%)”: the question mark is the point. Take the rate from your policy or your carrier’s declaration page and enter it above. The 5% used in the worked example on this page is an example input picked to keep the arithmetic readable, not a benchmark or an average.
Why do loaded rates matter when bidding a job?
Because labor is the largest line in the bid: field service companies see labor costs run 55–90% of a typical job contract’s revenue. Bid off the bare wage and every hour you quoted is missing its payroll tax, workers’ comp, and overhead — a gap that scales with every hour you win. Chronotek Pro’s job costing dashboard reports live labor dollars for every job by day, week, and pay period using loaded pay rates, and lets you add a percentage to employee pay rates that reflects the cost factors in your own business.
How do I lower labor costs without cutting anyone’s pay?
Start with hours you are paying for that nobody worked. One cleaning company owner tested TimeTiles™ with his 50-person staff and found time cards ran 8 minutes shorter per shift once employees had to be on site to clock in instead of clocking in from their cars; across 300 shifts a week at a loaded pay rate of $16.46 an hour, that came to $34,236.80 a year in eliminated waste. Note that the math uses a loaded rate — the bare wage would have understated the savings. For more, how to control labor costs and field service labor cost tracking cover the operational side.
Does overtime change the loaded rate?
The percentages apply to whatever wage you pay for that hour, so an overtime hour paid at a premium carries proportionally more payroll tax and workers’ comp than a regular hour — the loaded rate rises with the wage it is built on. The flat overhead figure normally does not. The practical order is to total the week and split regular from overtime hours first with the time card calculator, then load each wage separately here.
See loaded labor costs as they happen
A calculator gives you one hour’s true cost. Chronotek Pro’s live job costing dashboards apply loaded pay rates to GPS-verified hours and report labor dollars by employee and job for the day, week, and pay period — then predict where budgets are heading. Start a 30-day free trial, no credit card required.
Related reading: Loaded pay rates and true job costs · How to control labor costs · Field service labor cost tracking · Free time card calculator