Calculate what an employee actually costs per productive hour after wages, payroll burden, workers' compensation, benefits and other employment costs are included.
Hourly wage is only the starting point.
Enter your own assumptions below. The starting values are only an illustrative example.
These results update automatically as you change the assumptions.
Planning estimate only. Verify payroll, workers' compensation, benefits, productive-hour assumptions and other employment costs for your business before relying on the result.
The free calculator estimates the loaded labor cost of one employee. The MarginForge Excel workbook lets you model multiple labor roles, calculate blended team labor costs and compare the billable labor rates required at different gross-margin targets.
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An employee can be paid for hours that are not available to perform productive customer work. Those hours still cost the business money.
If divided by all paid hours:
If divided by productive hours:
That's a $6.50-per-hour difference simply from recognizing that not every paid hour is available to produce work.
$42.27 per productive hour is an estimated cost of employing the worker—not necessarily what you should charge the customer.
Your selling price may also need to recover direct job costs, business overhead, taxes, risk and the margin required by your business.
Want a reusable labor-cost model?
Move from the free single-employee calculator to the Contractor Labor Cost & Labor Burden Calculator for multiple roles, blended rates, and margin-aware billable labor scenarios.
Employer payroll burden can be included when the goal is to estimate the employer’s total employment cost. The exact components should reflect your business’s payroll and accounting treatment.
Paid nonproductive time should be reflected in the model, but it should not be counted twice. If annual wages already include all paid hours and productive hours are reduced for PTO, separately adding those same PTO wages again can overstate labor cost.
Not in the MarginForge framework. Loaded labor estimates employment cost. General business overhead is modeled separately.
No. Loaded labor is a cost input. A customer selling rate may also need to recover overhead, taxes, risk and the margin required by your business.
Not every paid hour is available to perform productive customer work. Fewer productive hours mean the same annual employment cost must be recovered across fewer working hours.
Review it whenever wages, payroll burden, workers’ compensation, benefits or workforce utilization materially change, and periodically compare your productive-hour assumptions with actual operations.
Important
This calculator provides a planning estimate only. MarginForge does not provide payroll, accounting, tax, legal or financial advice. Results depend on the information and assumptions you enter.
You are responsible for verifying payroll burden, workers' compensation, benefits, productive-hour assumptions and other employment costs for your business before relying on the calculation for pricing, bids, quotes, proposals or other business decisions.