Labor Burden Rate Calculator
Your burden rate as a percentage of the wage, the burdened cost of an hour actually worked once paid time off is taken out, and the rate you must bill to hold your target gross margin. Employer taxes come from verified federal and state rates, with the math shown line by line.
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Estimate only — not tax, legal, or accounting advice. This is the published math for labor burden rate calculator. Confirm final figures with your payroll provider, accountant, or the state agency before acting on them.
$58,240 a year at 2080 contracted hours.
Prefilled from BLS March 2026, private industry workers: benefits are 30.1% of total compensation, which is 43.1% of wages.
Holidays, vacation and typical sick days. Paid but not worked, so they raise the cost of every hour that is.
Labor burden rate
59.1%
On top of the wage. Every $1.00 of wage costs you $1.59 once taxes, benefits and overhead are counted.
Wage rate
$28.00
Burdened cost / worked hour
$46.70
Bill rate at 35% margin
$71.85
Two hourly figures come out of this, and confusing them is expensive. $44.55 is the cost spread across 2080 contracted hours. $46.70 is the cost of an hour actually worked, after 1984 productive hours are left from paid time off. Job costing uses the second one. To keep 35% gross margin on labour you divide it by 0.65 — never multiply by 1.35, which is the margin-and-markup mix-up and leaves money on every job.
| Gross wages | $58,240.00 | 100.0% |
| Social Security (employer half) | $3,610.88 | 6.2% |
| Medicare (employer half) | $844.48 | 1.5% |
| Federal unemployment (FUTA) | $42.00 | 0.1% |
| State unemployment (Arizona)One rate for every industry — Arizona does not vary the new-employer rate by NAICS, unlike Ohio, Pennsylvania and Massachusetts in this same batch. DES's 2026 rate chart states it as a standalone line, verbatim: "New Employer Rate - 2.00%". The duration is stated on DES's Calculating Unemployment Taxes page, verbatim: "Arizona uses a reserve ratio system to determine the tax rates. If you are a new employer (and not a successor), your tax rate is 2.0% for at least 2 calendar years." Note "at least" — the employer stays at 2.00% until it has enough experience, not for exactly two years. | $160.00 | 0.3% |
| Benefits | $25,101.44 | 43.1% |
| Overhead (equipment, software, space) | $4,659.20 | 8.0% |
| Total annual cost | $92,658.00 | 159.0% |
Not included: workers’ compensation. Workers' compensation is priced by class code, payroll, and insurer — there is no honest flat rate. Get a quote from your state fund or a licensed broker, then add it here. For a trade it is often the single largest line in the burden, which is exactly why we will not invent it — put your own rate into the overhead field once your policy tells you what it is.
- Net-yield rate adjustment (A.R.S. § 23-730): Not a separate charge — a statutory recalibration already baked into every rate in this pack, and the reason Arizona's figures are odd two-decimal values rather than round schedule steps. DES, verbatim, at the head of the 2026 chart: "ARS 23-730 requires adjustment of the regular tax rates to produce only the net required yield each year. The Arizona adjusted rates effective for calendar year 2026 are as follows:". Every rate below moves year to year even when an employer's own reserve ratio does not.
- Job Training Tax: REFERENCED BY DES BUT NO 2026 RATE IS PUBLISHED, so none is asserted. DES's Unemployment Insurance Tax FAQ still carries the questions "Does the online Unemployment Tax and Wage Report System calculate Job Training Tax?" and "My report was late, but I paid all the taxes due, including Job Training Tax; why did I get a notice saying I still owe Job Training Tax?", but the linked answer pages carry no rate, and DES's operative 2026 publication — the UIT-0603A rate chart — does not mention a job training tax at all. Recorded here so that a reader who meets the term on a DES page knows why it is absent from the arithmetic. RETRY ROUTE: DES Unemployment Tax Office, 602-771-6606, or a future revision of UIT-0603A.
- Dividing by 2080 contracted hours gives $44.55 an hour, but 12 days of paid time off mean only 1984 hours are actually worked — 4.83% more per hour of work delivered. Use the productive-hour figure when you price a job.
Labor Burden Rate Calculator: burden rate, burdened cost per productive hour and a bill-rate floor, computed in your browser from verified federal and state rates. Nothing is transmitted.
Verified 2026-08-04 against Social Security Administration — Contribution and Benefit Base (Automatic Determinations), 2026 (effective 2026-01-01)
Verified 2026-08-04 against IRS Publication 15 (Circular E), Employer's Tax Guide — section 14, Federal Unemployment (FUTA) Tax (effective 2026-01-01)
Source of record
- IRS Publication 15 (Circular E), Employer’s Tax Guide ↗Internal Revenue Service
- Social Security Administration — Contribution and Benefit Base (Automatic Determinations), 2026 ↗Social Security Administration
🎓 Understand this tool
What it is
The same cost stack as the employee-cost calculator, expressed the way a shop that quotes work needs it: as a percentage on top of the wage, as the cost of one hour actually worked, and as the rate you would have to bill to hold a target gross margin on that hour.
How it works
Burden rate is total annual cost minus the wage, divided by the wage. The burdened hourly figure divides the same total by productive hours — contracted hours less paid time off — rather than by the 2,080 a full year contains. The bill rate then divides the burdened hour by one minus the target margin, which is the only arithmetic that produces the margin asked for.
Getting the most from it
- Enter the hourly wage rather than a salary; the annual figure is shown beside it so the two stay tied together.
- Pick your state, so unemployment tax uses that state’s published rate and wage base instead of a national average.
- Set benefits and the overhead each worker carries — vehicle, tools, phone, software, supervision.
- Enter paid days off. They do not change the annual cost, but they change what every worked hour costs.
- Set the gross margin you price at, and read the bill rate as the floor rather than the quote.
Reading your result
A burden rate in the twenties usually means light benefits; the forties usually means real health coverage. The gap between the two hourly figures is the size of your paid time off, and it is the number most quoting mistakes hide in. The percentage column shows which line is doing the work — tax rarely is.
What it can't tell you
Workers’ compensation is excluded and is often the largest line for a trade, so a burden rate computed here is a floor until your own premium is added to overhead. Unbilled time — travel, waiting, rework — is not modelled either, and it lowers the hours you can actually charge for. The bill rate covers labour alone: materials, equipment and profit sit on top.
Frequently asked questions
Everything an employer pays for a worker above the wage itself, expressed as a percentage of that wage. Employer payroll taxes, benefits, paid time off and the overhead carried per worker all sit inside it. A 30% burden rate means a $28 wage costs $36.40 before anyone has picked up a tool.
Related calculators
Employee cost
What a hire actually costs once employer taxes, benefits and overhead are counted. Social Security to this year’s wage base, Medicare, federal unemployment after the state credit, and your state’s own unemployment tax at its own wage base — every rate cited to the agency that published it, with the math shown.
Margin vs markup
Margin is a share of the price; markup is a share of the cost, and pricing as if they were the same number quietly gives away a sixth of your profit. Convert between the two, price for a target margin the right way, and see the common mistake printed beside the published method.
Change alerts — when a state revises the guideline or deadline behind this page
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