What Does a $32 an Hour Employee Actually Cost?
True cost per billable hour
$50.37
At 9% workers comp, 3% unemployment, 2% liability, $2 an hour of benefits and 6.5 billable hours in an 8 hour day.
How that number is worked out
These are the figures this page was built with and every line the calculator produces from them. Change anything above and all of it moves.
- Base hourly wage you pay32 $
- Workers comp rate9 %
- State and federal unemployment3 %
- General liability, as a payroll percent2 %
- Benefits, per hour2 $
- Productive hours out of every 86.5 hrs
True cost per billable hour$50.37
| Base wage | $32.00 /hr |
|---|---|
| FICA at 7.65% | $2.45 /hr |
| Workers comp at 9% | $2.88 /hr |
| Unemployment at 3% | $0.96 /hr |
| Liability at 2% | $0.64 /hr |
| Benefits | $2.00 /hr |
| Burdened cost, every paid hour | $40.93 /hr |
| Only 6.5 of 8 hours are billable | $50.37 /hrthis is what a billable hour actually costs you |
| Burden over base wage | 57.4% |
Billable hours in an 8 hour day compared
The productive hours field is the one everybody skips, and it moves the true cost more than any tax rate does.
| Billable hours in an 8 hour day | True cost per billable hour | Burden over base wage |
|---|---|---|
| 6 of 8 | $54.57 | 70.5% |
| 6.5 of 8 | $50.37 | 57.4% |
| 7 of 8 | $46.77 | 46.2% |
| 8 of 8 | $40.93 | 27.9% |
What else matters here
A $32 an hour tradesman costs $40.93 a paid hour and $50.37 a billable hour, 57.4 percent over the wage.
What is not in that figure is everything the person uses. Blades, bits, blocks, screws, tape, caulk, fuel, the truck they drive, the small tools they break and the ones that walk off are consumed by the hour and almost never estimated by the hour. Most contractors either bury them in overhead, where they stop being visible, or forget them entirely.
Both options are worse than pricing them. Total last year's small tools, consumables and vehicle costs, divide by the billable hours the crew actually turned in, and you get a real number per hour: two or three dollars is common and high wear trades run higher. Add it to the benefits field on this page, which is the only per hour dollar field here, and the billable cost stops being an underestimate.
What this calculator assumes
- FICA is fixed at 7.65 percent, the employer half of Social Security and Medicare.
- Workers comp rates are set per trade and per state and swing enormously. Roofing can run over 25 percent where office work is under 1. Use your own rate off your policy.
- The productive hours field is the one everybody skips and it is the one that decides whether the job makes money. Drive time, loading, fuel stops and cleanup are paid and unbilled.
Questions people ask
What does a $32 an hour employee really cost?
$40.93 per paid hour with burden, and $50.37 per billable hour at 6.5 productive hours in an 8 hour day.
Where do small tools and consumables go?
Into the hourly cost. Divide last year's small tools, consumables and vehicle spend by the billable hours your crew turned in, and add the result to the benefits field. Two or three dollars an hour is common.
Why is workers comp set at 9 percent here?
Because it is a middle of the road number and the calculator has to open with something. Comp rates are set per trade and per state and they swing enormously, from under 1 percent for office work to over 25 percent for roofing. Put your own rate off your policy into the field.
The labor burden calculator takes any dimensions you like and hands back the same list.