True Employee Cost Calculator
Go beyond the hourly wage. Add taxes, benefits, overtime and workers' comp to see what an employee really costs you per hour. Then download a clean cost sheet.
- Live results
- Wages, taxes, benefits
- PDF cost sheet
Step 1
Enter the wage and the hours for one pay period.
Paid time off hours (optional)
Step 2
Taxes you pay on top of wages. The rates are pre-filled, so check them against your own payroll.
Step 3
What you contribute for each employee.
Step 4
Choose how your state or carrier charges for workers' compensation.
What Is Employee Cost — And Why It's More Than Just Wages
When contractors price a job, it's tempting to plug in an employee's hourly wage and call it "labor cost." But the wage on a paycheck is only part of what an employee actually costs your business. Payroll taxes, workers' compensation, benefits, and paid time off all add to the real, fully-loaded cost of every hour that employee works — a number often called labor burden or true hourly cost.
Underestimating labor burden is one of the most common ways contractors quietly lose money on jobs that look profitable on paper. If you price your bids using raw hourly wage instead of true cost, every hour of labor on the job is under-recovered — and it compounds across every estimate you send.
The Employee Cost Formula
The Employee Cost Calculator above computes this automatically, but the underlying formula is straightforward:
Where each component comes from:
- Gross Pay — regular, overtime (1.5×), vacation, PTO/holiday, and sick/bereavement hours at the employee's hourly wage
- Employer Taxes — FUTA, Medicare, Social Security, and state unemployment/other employment taxes the employer pays on top of wages (not deducted from the employee's paycheck)
- Benefit Costs — employer-paid retirement contributions, health insurance, and any other benefits
- L&I / Workers' Comp — calculated per $100 of payroll, per hour, or as a flat percentage depending on your state's method
Worked Example
Using the calculator's default numbers — a $25.00/hr employee working an 80-hour pay period — here's how the true cost breaks down:
That's 1.21× the base wage — meaning if this employee is billed or estimated at $25/hr, the job is under-recovering over $5 of real cost on every single hour worked. Add your company's overhead and target margin on top of this number, and you have the true minimum rate a job needs to charge to stay profitable.
Why This Matters When You're Estimating a Job
Labor burden is one of the most common blind spots in construction estimating — it's easy to see on a calculator and just as easy to forget the moment you're back in a live estimate. QuickEstimate applies your true labor cost, overhead, and target margin automatically to every estimate, so pricing stays consistent whether it's your first job of the year or your five-hundredth.
- Set your labor rates once — QuickEstimate applies them to every future estimate automatically
- See your real profit margin before you send a proposal, not after the job is done
- Protect against underpricing without re-doing this math by hand on every job