What is a fully-burdened labor rate?

It's your true cost for one hour of a worker's time: the base wage plus everything you pay on top of it — employer payroll taxes, workers' compensation, liability insurance, and any benefits or paid time off. It's almost always meaningfully higher than the wage on the paycheck.

What percentage is labor burden?

It varies by state, trade, and how you're set up, but for construction it commonly adds 20–40% or more to the base wage. Employer payroll taxes are roughly 7.65% (FICA) plus federal and state unemployment; the bigger, more variable piece is workers' comp, because hardscape and masonry class codes carry higher rates than office work. Add liability insurance and any benefits on top.

How do I calculate burdened labor cost?

Add up your annual cost per worker beyond the wage (payroll taxes + workers' comp + insurance + benefits), divide by the base annual wage to get your burden percentage, then multiply any wage by (1 + burden%). For example, a $22/hr wage at a 32% burden is $22 × 1.32 = $29.04/hr.

Fully-burdened labor cost: what it is and how to calculate it

Your fully-burdened labor cost is the wage plus everything you pay on top of it — payroll taxes, workers' comp, liability insurance, and benefits. The formula is simple: burdened rate = wage × (1 + burden%). For construction trades the burden commonly adds 20–40% or more. Forgetting it is the single most common way a hardscape crew underbids.

What's actually in the burden

When you pay a worker $22 an hour, that $22 is only part of what the hour costs you. On top of it sit:

Employer payroll taxes. FICA is 7.65% (6.2% Social Security + 1.45% Medicare) that the employer matches, plus federal (FUTA) and state (SUTA) unemployment taxes.
Workers' compensation. Usually the biggest and most variable piece — hardscape and masonry class codes carry much higher comp rates than low-risk work, and rates differ by state and by your claims history.
General liability insurance allocated to labor.
Benefits and paid time off, if you offer them — health, retirement match, holidays, vacation.

(Employer payroll-tax rates come from the IRS and your state agency; workers' comp rates come from your carrier. Use your real numbers — this is guidance, not tax advice.)

The formula, with a worked example

Add up everything you spend on a worker in a year beyond the wage, divide by the base wage to get a burden percentage, and apply it to any hourly rate:

burdened rate = wage × (1 + burden%)
$29.04/hr = $22.00/hr × (1 + 0.32)

A $22/hr wage at a 32% burden truly costs $29.04 an hour. On a job that takes 40 crew-hours with three workers, that's the difference between a $2,640 labor line (bare wage) and a $3,485 labor line (burdened) — about $845 that a wage-rate bid quietly leaves on the table.

Why it decides whether the job makes money

That ~$845 isn't a rounding error — on many small jobs it's the entire profit. Price a whole season off the bare wage and you don't lose one job; you lose the margin on every job, and you find out when the books close instead of when you sign the bid. Burdened labor is layer two of a patio price that holds up, and it's why crews that price on gut feel systematically underbid.

See your own burdened rate

The free hardscape bid calculator turns your wage, crew size, and burden percentage into your burdened rate and the true cost of a job — no signup, runs on your phone.