Last updated: 2026-06-09
Quick Answer
To find your payroll burden: Burden Rate = (Total Annual Burden / Annual Gross Wages) x 100. Add up employer FICA, unemployment tax, workers comp, health insurance, retirement match, and other benefits, then divide by wages. Most construction payroll burden runs 15% to 35%, so a worker paid $60,000 often costs $69,000 to $81,000. This calculator returns your burden rate, total burden cost, fully burdened payroll cost, and the multiplier to mark wages up by on every bid.
Inputs you'll need
- Annual gross wages (one employee or total crew payroll)
- Employer payroll taxes / FICA (defaults to 7.65%)
- Unemployment tax, FUTA + SUTA (dollars per worker per year)
- Workers compensation rate (varies by trade and state)
- Health insurance, retirement match, and other benefits (optional)
Related tools: Burdened Labor Rate Calculator, Labor Cost Calculator, and Contractor Hourly Rate Calculator.
How to use this payroll burden calculator
- Enter annual gross wages for the worker or the whole crew.
- Keep FICA at 7.65% and set unemployment tax in dollars per worker.
- Add your real workers comp rate, plus any health, retirement, and other benefits.
- Read the burden rate, total burden, and multiplier to apply on your next bid.
Want the true cost per hour instead of the annual rate? Convert it with our Burdened Labor Rate Calculator.
Base pay for one employee, or total crew payroll
Social Security 6.2% + Medicare 1.45% = 7.65%
Per employee. FUTA + state caps on a wage base, often $300-$700
Varies by trade and state, often 3%-15% in construction
Employer share of the monthly premium
Employer match as a percent of wages
Training, tools, uniforms, vehicle allowance, bonuses
Payroll Burden Breakdown
Payroll Burden Guide for Contractors
What payroll burden is, what goes into it, and why bidding off raw wages quietly kills your margin.
What Is Payroll Burden and How Do You Calculate It?
Payroll burden is everything you pay on top of an employee's base wages, expressed as a percentage of those wages. The labor burden rate is total burden cost divided by gross wages, times 100. For most construction crews it lands between 15% and 35%.
The math is straightforward once you list the pieces:
- Burden Rate % = (Total Annual Burden / Annual Gross Wages) x 100
- Fully Burdened Cost = Gross Wages + Total Burden
- Burden Multiplier = Fully Burdened Cost / Gross Wages
A worker you pay $60,000 a year almost never costs $60,000. Add FICA, unemployment, workers comp, and benefits and the real number is closer to $68,000 to $80,000. If you bid off the base wage, you are eating that gap on every hour. I learned to mark up labor by the burden multiplier before it ever hits an estimate.
Key Takeaways
- Labor burden rate = total burden divided by gross wages, times 100
- Construction payroll burden typically runs 15% to 35% of base wages
- The burden multiplier (1.15x to 1.35x) is what you mark wages up by for a bid
What Goes Into a Contractor's Payroll Burden
Six costs make up most of a construction payroll burden, and workers comp is the one that swings the most. A roofer's comp rate can be five times a finish carpenter's, so the same wage carries a very different burden.
- FICA (7.65%) - the employer match on Social Security (6.2%) and Medicare (1.45%).
- Unemployment (FUTA + SUTA) - federal plus state, charged on a wage base, often $300 to $700 per worker per year.
- Workers compensation - varies by trade and state, commonly 3% to 15% of wages in construction.
- Health insurance - the employer share of the monthly premium.
- Retirement match - any 401k or pension contribution you make.
- Other benefits - training, tools, uniforms, a vehicle allowance, bonuses.
Most homeowners have no clue what a worker actually costs a contractor. They see a $35 hourly wage and assume that is the whole bill. They never see the insurance, the comp premium, the payroll taxes, or the truck. The burden is exactly where that gap lives.
Key Takeaways
- FICA is a fixed 7.65% employer match on Social Security and Medicare
- Workers comp is the biggest swing factor, 3% to 15% depending on trade and state
- Unemployment tax is charged on a wage base, so it is closer to a flat dollar amount per worker
Why Ignoring Burden Quietly Kills Your Margin
Bidding off raw wages instead of burdened cost is one of the most common ways a profitable-looking job loses money. If your real burden is 28% and you bid as if labor costs the base wage, you are short 28% on every labor hour before profit even enters the picture.
Here is what that looks like on a job with $40,000 of base labor:
- Base wages bid into the job: $40,000
- Actual burden at 28%: $11,200
- True labor cost you have to cover: $51,200
That $11,200 comes straight out of profit if it is not in the bid. Run the burden once, lock in your multiplier, and apply it to every estimate. Then layer overhead and profit on top of the burdened number, never the base wage. Measure twice, cut once, the same way you would frame a wall.
Key Takeaways
- Bidding off base wages instead of burdened cost silently erases margin
- A 28% burden on $40,000 of labor is $11,200 you must recover in the bid
- Apply overhead and profit on top of the burdened cost, not the raw wage
Typical construction payroll burden
Example burden rates by scenario. Workers comp and benefits drive most of the range. These are 2026 illustrations; your real numbers vary by region, trade, and state, so plug in your own and get local figures from your insurer and state agency.
| Scenario | Wages | Burden rate | True cost |
|---|---|---|---|
| Low-risk trade, no benefits | $40,000 | 13.8% | $45,510 |
| Mid trade, basic taxes + comp | $60,000 | 13.4% | $68,040 |
| High-comp trade, full benefits | $80,000 | 32.7% | $106,120 |
High-comp example uses 8% workers comp, $650/mo health, 4% retirement match, and $2,000 in other benefits.
How to Use This Calculator
Enter Annual Gross Wages
Use the base annual pay for one employee, or the total payroll for a crew. This is the number every burden cost gets measured against.
Add Your Payroll Taxes
FICA defaults to the employer match of 7.65 percent. Add unemployment tax (FUTA + SUTA) as a dollar amount per worker, since it is charged on a capped wage base rather than all wages.
Add Workers Comp and Benefits
Enter your workers comp rate (it varies a lot by trade), the employer share of health insurance, any retirement match, and other benefits like training, tools, or a vehicle allowance.
Read Your Burden Rate and Multiplier
The calculator returns total annual burden, your labor burden rate as a percentage, the fully burdened payroll cost, and the burden multiplier to mark wages up by on every bid.
Payroll Burden Formulas
FICA Cost = Gross Wages x FICA %
Workers Comp = Gross Wages x Comp %
Retirement = Gross Wages x Match %
Total Burden = FICA + Unemployment + Workers Comp + Health (x12) + Retirement + Other
Burden Rate % = (Total Burden / Gross Wages) x 100
Fully Burdened Cost = Gross Wages + Total Burden
Burden Multiplier = Fully Burdened Cost / Gross WagesWhere:
- Gross Wages
- = Annual base pay for the worker or crew
- FICA %
- = Employer Social Security + Medicare match, 7.65% standard
- Unemployment
- = FUTA + SUTA in dollars per worker per year (wage-base capped)
- Total Burden
- = All employer costs on top of wages, in annual dollars
- Burden Multiplier
- = Mark base wages up by this factor on every bid
Frequently Asked Questions
What is a payroll burden rate?
The payroll burden rate is the cost of employing someone beyond their base wages, written as a percentage. Burden Rate = (Total Annual Burden / Annual Gross Wages) x 100.
If a $60,000 employee costs you another $8,040 in taxes, comp, and benefits, the burden rate is 13.4 percent and the burden multiplier is 1.134. In construction, fully loaded burden commonly runs 15 to 35 percent.
What is included in payroll burden?
The main pieces are employer FICA (7.65%), federal and state unemployment tax (FUTA + SUTA), workers compensation, health insurance, retirement match, and other benefits like training, tools, uniforms, or a vehicle allowance. Workers comp is the biggest swing factor and depends heavily on the trade and state.
How is payroll burden different from the burdened labor rate?
They use the same costs, just a different output. Payroll burden is the percentage (and total dollars) added to wages. The burdened labor rate converts that into a true cost per hour. Use this tool for the burden rate and multiplier, then the burdened labor rate calculator when you want the hourly figure for job costing.
How do contractors use the burden rate when bidding a job?
Apply the burden multiplier to base wages before you add overhead and profit. On a job with $40,000 of base labor and a 28 percent burden, your true labor cost is $51,200. Bidding off the raw $40,000 leaves $11,200 coming straight out of profit. Roll the burdened labor into a full estimate with our labor cost calculator.
What is a typical payroll burden rate for a construction company?
Most construction crews land between 15 percent and 35 percent. A low-risk trade with no benefits sits near the bottom; a high-comp trade (roofing, framing) with health insurance and a retirement match sits near the top. Plug in your real numbers because rates vary by region and trade, and check your state workers comp class code for an accurate figure.
Does payroll burden include overhead and profit?
No. Payroll burden covers only the direct cost of employing a worker (taxes, insurance, benefits). General overhead (office, software, marketing, your truck) and profit are added on top of the burdened labor cost, not inside it. Keep them separate so you can see each margin clearly. Our contractor hourly rate calculator layers overhead and profit on for you.
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