💰 Most contractors underestimate employee costs by 30-50%! Our free labor burden calculator 2026 shows the TRUE fully loaded cost of your employees including taxes, insurance, benefits & overhead. Used by 25,000+ US construction businesses for accurate bidding. ⭐ 4.9/5 (2,500+ reviews)
25,000+ contractors already know their TRUE labor costs
The difference between a profitable project and a money-losing one often comes down to one simple mistake: underestimating your true employee cost. Our labor burden calculator 2026 reveals the hidden costs that most contractors miss.
Base salary: $35 × 2,080 hours = $72,800
+ Payroll taxes (FICA, FUTA, SUTA): $6,500
+ Workers' compensation: $2,500
+ Health insurance (employer portion): $5,400
+ Retirement contributions: $2,200
+ Paid time off (10 days): $2,800
+ Other benefits: $1,200
+ Overhead allocation (15%): $13,500
= TRUE ANNUAL COST: $106,900!
This is why our fully loaded labor rate calculator is essential for every contractor.
Most contractors are shocked to learn that a $35/hour employee actually costs $50-60/hour fully loaded. That's 40-70% more than the base wage! Our labor burden calculator reveals these hidden costs including taxes (7.65-10%), workers' comp (2-8%), health insurance ($3-7/hour), paid time off (4-8%), retirement (3-6%), and overhead (15-25%).
Fully loaded rates include: 1) Base hourly wage, 2) Payroll taxes (FICA, FUTA, SUTA), 3) Workers' compensation insurance, 4) Health insurance premiums, 5) Retirement contributions, 6) Paid time off (vacation, sick, holidays), 7) Training and certification costs, 8) Tools and equipment, 9) Overhead allocation, and 10) Profit margin. Most contractors only account for items 1-2, missing the other 8 categories that add 30-50% to true costs.
Labor burden rates vary significantly by state due to: 1) State unemployment tax rates (SUTA: 0.5-5%), 2) Workers' comp rates (vary by trade and state), 3) State-mandated benefits (CA paid family leave, NY disability), 4) Local minimum wage laws, 5) Prevailing wage requirements. Our calculator automatically applies state-specific rates for 2026 to give you accurate results.
For US construction in 2026, average burden rates are: Residential: 30-45%, Commercial: 35-50%, Industrial: 40-55%, Federal/GSA: 45-60%. These percentages mean a $30/hour base wage costs $39-48/hour fully loaded. Union contractors often have burden rates 5-15% higher due to richer benefit packages.
GSA (federal) contracts require specific cost categories per FAR 31.205-6: 1) Base salary, 2) Fringe benefits (health, retirement, PTO), 3) Overhead (indirect costs), 4) G&A (general & administrative), 5) Fee/profit. Rates must be auditable and compliant with federal acquisition regulations. Our calculator includes a federal/GSA option with appropriate cost structure.
85% of contractors underbid because they don't know their true labor costs. Common mistakes: Ignoring workers' comp (adds 3-8%), Forgetting paid time off (adds 4-8%), Underestimating health insurance ($3-7/hour), Skipping overhead allocation (15-25%), Not including profit margin. A $35/hour employee actually costs $50-60/hour - bidding at $35 guarantees losing money!
Know your TRUE labor costs for every bid
Contractor Tool: This labor burden calculator 2026 provides estimates based on typical US construction industry data. Actual costs vary by specific circumstances, location, and business structure.
Compliance Note: For GSA contracts or federal work, consult Federal Acquisition Regulation (FAR) and agency guidelines. State and local regulations may impose additional requirements.
Last Update: January 1, 2026 | Next Review: July 1, 2026