What Does a $38 an Hour Employee Actually Cost?
True cost per billable hour
$59.36
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 pay38 $
- 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$59.36
| Base wage | $38.00 /hr |
|---|---|
| FICA at 7.65% | $2.91 /hr |
| Workers comp at 9% | $3.42 /hr |
| Unemployment at 3% | $1.14 /hr |
| Liability at 2% | $0.76 /hr |
| Benefits | $2.00 /hr |
| Burdened cost, every paid hour | $48.23 /hr |
| Only 6.5 of 8 hours are billable | $59.36 /hrthis is what a billable hour actually costs you |
| Burden over base wage | 56.2% |
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 | $64.30 | 69.2% |
| 6.5 of 8 | $59.36 | 56.2% |
| 7 of 8 | $55.12 | 45% |
| 8 of 8 | $48.23 | 26.9% |
What else matters here
At $38 an hour the burdened cost is $48.23 a paid hour and $59.36 a billable hour, 56.2 percent over the wage.
On public work the wage is not yours to set. A prevailing wage determination fixes both a base rate and a fringe benefit rate for each classification on the job, and the two together are what has to be paid. The fringe can be delivered as bona fide benefits or paid out as cash, and the choice changes this calculation: paid as cash it becomes wages and carries every percentage burden on this page, paid as benefits it usually does not.
Put the fringe in the benefits field to see the difference. At $12 an hour of fringe paid as benefits, the billable cost of this employee is $71.66. Certified payroll reporting, the classification of every worker on site, and the record keeping that goes with it are separate costs again, and they belong in the general conditions for that job rather than in your general overhead.
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 $38 an hour employee really cost?
$48.23 per paid hour with burden, and $59.36 per billable hour at 6.5 productive hours in an 8 hour day.
How does prevailing wage change the cost?
The determination sets a base rate and a fringe rate for each classification. Fringe paid as cash becomes wages and carries every percentage burden here; paid as bona fide benefits it usually does not. At $12 of fringe as benefits this employee costs $71.66 a billable hour.
What counts as a productive hour?
Only the hours you can put on an invoice. Drive time, loading the truck, fuel stops, dump runs and cleanup are all paid and none of them are billable. Six and a half out of eight is a realistic default and plenty of crews are below it.
The labor burden calculator takes any dimensions you like and hands back the same list.