What Does a $60 an Hour Employee Actually Cost?
True cost per billable hour
$92.30
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 pay60 $
- 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$92.30
| Base wage | $60.00 /hr |
|---|---|
| FICA at 7.65% | $4.59 /hr |
| Workers comp at 9% | $5.40 /hr |
| Unemployment at 3% | $1.80 /hr |
| Liability at 2% | $1.20 /hr |
| Benefits | $2.00 /hr |
| Burdened cost, every paid hour | $74.99 /hr |
| Only 6.5 of 8 hours are billable | $92.30 /hrthis is what a billable hour actually costs you |
| Burden over base wage | 53.8% |
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 | $99.99 | 66.6% |
| 6.5 of 8 | $92.30 | 53.8% |
| 7 of 8 | $85.70 | 42.8% |
| 8 of 8 | $74.99 | 25% |
What else matters here
Sixty dollars an hour is $74.99 a paid hour and $92.30 a billable hour. The burden is 53.8 percent, the lowest percentage on the calculator, and $32.30 an hour, the largest amount.
People are rarely paid this to swing a hammer. A wage at this level buys a master license, a qualifying individual, a service technician who diagnoses instead of replacing, or someone whose sign off lets the work be permitted at all. What that person mostly sells is judgment, and judgment is slower to schedule than labor.
Which is why the productive hours field punishes this wage hardest. The same person at 4 billable hours out of 8, running between sites, is $149.98 a billable hour rather than $92.30. If the plan for an expensive person is to have them start the difficult work and then hand it to somebody cheaper, the plan has to be written into the schedule, because it will not happen by itself.
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 $60 an hour employee really cost?
$74.99 per paid hour with burden, and $92.30 per billable hour at 6.5 productive hours in an 8 hour day.
Why does a high wage suffer most from unbillable time?
Because the dollars scale with the wage. At 4 productive hours out of 8 this employee costs $149.98 a billable hour instead of $92.30, so scheduling the expensive person badly is the most costly scheduling error there is.
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.